How to protect yourself against your construction contractor's insolvency

In brief - Useful contract clauses that may help if your contractor goes under

Broad termination rights, progressive calls on the contractor's security and warranties obtained directly from subcontractors can all help to minimise the disruption if your head contractor becomes insolvent.

Head contractor's insolvency usually causes delays and extra costs

The insolvency of the head contractor or a major subcontractor or supplier on a project creates turmoil. Project principals face the difficult task of completing their project and will almost inevitably suffer substantial delay and additional costs.

Principals will also likely lose protection in relation to defective work because a new contractor will not wish to warrant or fix (without being paid) work done by a previous contractor.