A “No Known Loss” letter, also known as a “Letter of No Loss” or “Clean Claim History Letter,” is a formal document stating that a company or individual has not experienced any financial losses or filed any insurance claims within a specified period. These letters are frequently required during mergers and acquisitions, loan applications, lease agreements, or when bidding on contracts. They provide assurance to the requesting party about the stability and risk profile of the involved entity.
The purpose of a no known loss letter is to demonstrate a history of financial stability and responsible risk management. A clean claim history indicates a lower likelihood of future claims, making the company or individual more attractive to lenders, insurers, potential partners, or landlords. These letters should be accurate and verifiable, as misrepresentation can have serious legal and financial consequences.
Drafting a No Known Loss letter requires careful consideration of the requesting party’s needs and the specific context in which it will be used. It’s crucial to specify the exact period covered by the statement and to clearly state that, to the best of your knowledge, no losses have occurred during that time. If there have been minor incidents or claims, they should be disclosed if the requesting party’s threshold is set to any claim. Honesty and transparency are paramount.
Different industries and situations may necessitate slightly different wording in a No Known Loss letter. For example, a construction company applying for a bond might need to emphasize their safety record and absence of liability claims. A retail business applying for a loan might focus on the lack of inventory losses or theft. Always tailor the letter to address the specific concerns and requirements of the requesting party.
13 Sample “No Known Loss” Letter Examples
Below are 13 examples of No Known Loss letters for various situations. Remember to adapt these templates to your specific needs and circumstances.
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[Your Company Letterhead]
[Date][Recipient Name]
[Recipient Title]
[Recipient Company]
[Recipient Address]Subject: No Known Loss Letter
Dear [Recipient Name],
This letter confirms that, to the best of our knowledge, [Your Company Name] has not experienced any financial losses or filed any insurance claims for the period from [Start Date] to [End Date].
Sincerely,
[Your Name]
[Your Title] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no known losses or outstanding insurance claims for the period of [Start Date] to [End Date]. This declaration is made in good faith.
Sincerely,
[Your Name] -
[Construction Company Letterhead]
[Date][Bonding Company Name]
[Bonding Company Address]Subject: No Known Loss Letter for Bonding Application
Dear [Contact Person],
This letter is to verify that [Construction Company Name] has experienced no known losses related to construction projects or filed any liability claims for the period of [Start Date] to [End Date]. Our safety record remains excellent.
Sincerely,
[Project Manager Name]
[Project Manager Title] -
[Retail Company Letterhead]
[Date][Bank Name]
[Bank Address]Subject: No Known Loss Letter for Loan Application
Dear [Contact Person],
This letter confirms that [Retail Company Name] has not experienced any significant inventory losses due to theft, damage, or other causes, and has not filed any relevant insurance claims for the period of [Start Date] to [End Date]. This statement is true and accurate to the best of our knowledge.
Sincerely,
[Financial Officer Name]
[Financial Officer Title] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration – Lease Agreement
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no history of property damage or losses that would affect the property located at [Property Address] for the period of [Start Date] to [End Date].
Sincerely,
[Your Name] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration – Vendor Contract
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no history of losses that would affect in the service to contract with [Company Name] for the period of [Start Date] to [End Date].
Sincerely,
[Your Name] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration – Legal Concern
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no history of legal losses that would affect in the legal process for the period of [Start Date] to [End Date].
Sincerely,
[Your Name] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration – Insurance Company
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no history of losses that would affect in the insurance term and process for the period of [Start Date] to [End Date].
Sincerely,
[Your Name] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration – Stock Investor
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no history of losses that would affect in the stock process for the period of [Start Date] to [End Date].
Sincerely,
[Your Name] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration – Business Partner
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no history of losses that would affect in the term of the partner process for the period of [Start Date] to [End Date].
Sincerely,
[Your Name] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration – New Employer
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no history of losses in the job or employment for the period of [Start Date] to [End Date].
Sincerely,
[Your Name] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration – Government
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no history of losses to give damage to government process and contract for the period of [Start Date] to [End Date].
Sincerely,
[Your Name] -
[Your Name/Company Name]
[Your Address]
[Date][Recipient Name/Company Name]
[Recipient Address]Re: No Known Loss Declaration – Client and Customer
To Whom It May Concern:
This letter serves as confirmation that [Your Name/Company Name] has no history of losses to give the problem to our customers for the period of [Start Date] to [End Date].
Sincerely,
[Your Name]
Conclusion
No Known Loss letters are vital tools for demonstrating financial responsibility and stability. By understanding their purpose, drafting them carefully, and adapting them to specific situations, businesses and individuals can effectively mitigate risks and enhance their credibility with lenders, insurers, partners, and other stakeholders. Always consult with legal counsel when in doubt about the contents or implications of such a letter.