“Prescription” refers to a period of time allocated by law or contract in which a person(s) (including organisations such as companies) must act to enforce their rights. Failure to act within this timeline, such person(s) will no longer be able to enforce his/her/its rights if they fail to act within this timeline.
(a) the law requires that a person (company) must act to collect its funds owed by other person(s) (company) within three years. Failure to do so within this timeline will result in the person (company) losing the right to act to collect the funds. This three-year period within which to act, includes enforcement through court process or adverse listing at the Credit Bureaux.
(b) In insurance an insured has a timeline (which will be stated in the policy) in which to claim under an insurance policy. If the insured does not claim within that time he/she will lose the right to claim and the insurer is not obliged to compensate for a claim submitted after the expiry of the prescribed period.