Company liquidations 'result in 164k job losses'
Commercial insurance
26th November 2009
Companies going into liquidation in England and Wales led to an estimated 164,000 job losses over the past year, new figures have shown.
Research carried out by CreditPal found that such circumstances were responsible for almost one third (29 per cent) of the 569,000 rise in unemployment during the period in question.
The services sector was particularly badly hit as a result of employers entering liquidation, accounting for 42,800 job losses and 4,655 business failures during the 12 months, while the manufacturing industry saw 39,800 positions vanish.
Smaller firms are particularly feeling the effects of the recession, the report stated, with the average enterprise collapsing employing 10.9 people, out of a total of 15,040 company liquidations.
Chris Poll, chief executive of CreditPal parent company Future Route, warned: "Data released this year by the Insolvency Service shows that an increasing proportion of liquidations are due to management failure, including under-capitalisation, over-optimism and poor planning."
Businesses are advised to invest in a UK insurance policy in order to protect themselves against liquidation, with directors and officers cover providing security for decision makers who may face legal action in such circumstances.
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