Insolvency In Construction: Looking Ahead And Minimising Risks

In the final part of this series, we look at how you can protect your position and be prepared in the event of an impending insolvency.

Thinking ahead

It is always prudent to assess insolvency risk before finalising a contract. The trading history and financial position of a company should be carefully reviewed and a financial risk assessment made at both the outset and during the lifetime of a project. Obtain an up to date set of accounts and a credit report before entering into your contract to enable you to assess the counterparty's financial viability.

Contractual safeguards

From the very start of a relationship, long before an insolvency situation arises, it is important to check what contractual terms will apply in the event of insolvency. Part 3 of our mini-series covers this in more detail.