Litigation Property Preservation Liability Insurance (LPPLI) is an innovative liability insurance piloted and promoted recently by large insurance companies. In civil actions, Litigation Property Preservation is an important mechanism for the protection of creditors’ interests, as well as the smooth execution after court decisions. However, in accordance with the Civil Procedure Law, the court can order applicants for property preservation to provide guarantee, without which the application may be rejected. In judicial practices, the demands for such guarantees and sums required are both rising, while the credits offered by guarantee companies and credit guarantee organizations are relatively insufficient and expensive. All of these have made it very difficult for creditors to apply for litigation property preservation guarantee, especially in class actions, in which the interests of various creditors need to be coordinated. To tackle with all these difficulties, LPPLI is introduced.

Under LPPLI, when the applicant for litigation property preservation is unable, in a timely way, to provide guarantee in cash or assets required by the court, the insurance company will issue a Letter of Guarantee to the court. The specific procedure is as following: the insurant apply for litigation property preservation to the court as applicant, and in accordance with the insurance contract signed with the insurant, the insurance company issues a Letter of Guarantee to the court; if the application for property preservation is erroneous, then the respondent should be indemnified for any loss caused by the property preservation; if the effective legal documents of the court affirm that the insurant should indemnify the respondent for the loss, then the insurant should fulfill this obligation in accordance with the insurance contract.
 

Compared with ligation guarantee by guarantee companies, LPPLI is cheaper, faster and easier in payment procedures. It minimizes the cost for property preservation by the applicant. If the preservation is false and leads to losses of the property preserved, the respondent can be indemnified promptly. It facilitates the normal hearing and smoothing execution of the case, and is significant in protecting the creditors.
 

Since May 2015, Jingtian & Gongcheng has been invited to participate in the LPPLI business of PICC Property and Casualty Co., Ltd. (“PICC”). The scope of its work includes: preliminary project planning, market survey and case study, design of insurance terms, drafting of project documents, issuing legal opinions, explanation of terms to executives of responsibilities insurance segments in company headquarters and branches, market promotion, etc. Jingtian & Gongcheng has provided strong support for the timely, effective and professional promotion of this business.
 

In September 2015, Jingtian & Gongcheng officially signed Cooperation Agreement on Business Risks Investigation of PICC LPPLI with PICC Beijing Branch, one of the most important branches of PICC. Jingtian & Gongcheng is hired by PICC Beijing Branch to be the long-term legal counsel for conducting LPPLI business.

With the most professional team, the richest experience, and best service, Jingtian & Gongcheng will provide strong support for customers to explore LPPLI businesses.