The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Category: L

LIMIT OF LIABILITY RULE

For the several insurers covering the same property with a severe loss, this is a method of apportioning that a loss.

LIMITED LIABILITY

The legal protection limiting each shareholder to the par value of fully paid-up company shares to cover the financial liability of the company’s debts and obligations in a privately or publicly owned

LIMITS

In Insurance, this is a multi-used term. Loss or damage payout typically has a maximum benefit as a limit. An insurer often has an age limit beyond which no policy will be

LINE SHEET

In Insurance, this is a schedule listing liability limits an insurer can write for different risks. It is a guide to determine the limit of liability ceding insurance companies will undertake on

LINKAGES

Tasks, functions, departments, and organizations integrated to achieve shared objective are related to each other, having interactions that promote the flow of information and ideas.

LIQUIDATION PERIOD

The time when a company sell of a portfolio or asset to compensate for risk. Refer to holding period.

LIQUIDITYTRAP

When a company holds their assets and does not sell them. It stops any two way traffic of funds causing new buyers to enter the market.

LITTER

Solid waste lost to waste handling system, discarded carelessly, becoming uncollectible.

LLOYD’S ASSOCIATION

Lloyd’s of London is copied by an organized group. It is not affiliated with Lloyd’s. Only responsible for the risk portion they choose to insure, unrelated entities congregate to collectively provide coverage.

LOAN CAPITAL

Company’s capital in-use that (1) is not equity capital, (2) earns fixed rate interest, not dividends, 3) irrespective of the company’s financial state must be repaid within a specified period, .

LOAN ORIGINATION FEE

For making a mortgage loan, the lender charges a fee to the borrower. Typically a percentage of the loan principal.

LOAN WORKOUT

Delinquent borrower’s payoff routine worked out with a lender. Rescheduling the loan, having a longer payback period, having smaller installment amount are typical conditions. Staves off further delinquency and likely foreclosure.

LOCKOUT

Employment action. An entity stops or withholds work. The work force is not allowed on entity property during this condition. It is a reverse strike by entity management, intended to compel an

LOGICAL THINKING

1. The rules of formal logic are the basis of this type of reasoning. 2. Critical thinking by another name.

LONDON INTERBANK OFFERED RATE (LIBOR)

The average of rates for which five major London banks will lend $10 million for a period of three or six months. It is the benchmark rate for setting interest rates for

LONG STRADDLE

A call option is a long position taken as an options strategy with a put option. Contrast to short straddle. Also known as bull straddle.

LONG TERM OBJECTIVES

Five years or longer strategy to achieve intended performance goals of an organization. Planned improvements of organization’s competitive position, profitability, technology leadership, investment gain, productivity, employee relations, and corporate image are considered

LOSS PAYEE

Entity receiving loss payout benefits, such as a mortgage borrower

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