Glossary

Liquidity is a measurement of an organization's ability to meet its debt obligations, particularly short-term debt. Cash, accounts receivable, and short-term securities are considered liquid assets since they can be quickly made available to pay debt. Ratios commonly used to measure liquidity include the current ratio, acid-test ratio, number of days' sales in accounts receivable, accounts receivable turnover, total assets turnover, and inventory turnover.

Liquidity ratio is a measurement of key financial variables that impact an insurer's ability to pay claims. In the Insurance Regulatory Information System (IRIS), liabilities to liquid assets and agent's balances to surplus are monitored.

Liquidity risk refers to the exposure to adverse cost or return variation stemming from the lack of marketability of a financial instrument at prices in line with recent sales.

Liquid petroleum gas

Liquor law liability refers to the common law liability imposed on those selling alcoholic beverages, as well as the statutory liability established in some states, which is excluded in general liability policies.

Litigation is the process of investigating and adjudicating the facts and law in a particular case or dispute. In general usage, it refers to the bringing or defense of a lawsuit.

A litigation hold may be issued to preserve all documentation related to a lawsuit or potential lawsuit in an effort to avoid spoliation of evidence. This includes electronic records and product complaints, whether they are paper-based documents or electronically stored information (ESI). A litigation hold may be issued by the manufacturing/service company's attorney or by the manufacturing/service company internally and requires the data in question to be protected so that it is accessible for the discovery process during litigation. If the company loses or destroys key documents—tangible or electronic—courts may rule that there is an automatic inference that the materials would have been unfavorable to the defendant. Furthermore, a company may have to pay penalties, including monetary fines and reimbursement of the opposing party's litigation costs, if it does not comply with a litigation hold. Also called "preservation order" or "hold order."

Litigation management is the application of management principles to the litigation process and to an organization's use of outside lawyers. Includes components of planning, controlling, organizing, implementing, and monitoring in the context of legal services and costs.

Litigation risk insurance (LRI) is a line of coverage that works from the same premises as third-party litigation funding. LRI essentially estimates the outcome of litigation and monetizes it to reduce the level of uncertainty for the party insured. In the process, LRI reduces the impact of pending litigation on the insured's balance sheet.

Little Miller Acts are state versions of the federal Miller Act. These laws require contractors working on state projects to furnish bonds or some other security for the protection of subcontractors and suppliers. State statutes vary widely in the degree of resemblance to the federal Act.