Builder's Insolvency

People often think that builders will become insolvent during a recession rather than when times are good. However this is not always case, insolvency can occur at any time and is more common when the economy is recovering from a recession. 

There are many early signs of contractor insolvency, irrespective of the size of the contractor, which if spotted and action is taken prepares you for the ensuing problems. 

The signs could be:

  • Request for payment of work that has not been carried out

  • Early payment requests 

  • Materials not being delivered to site

  • Inaccurate claims for work and materials

  • A reduction or change in the supervision on site and in the office

  • Senior people visiting the site more often which can be determined from the site record book

  • Talk of non-payments to sub-contractors, request from sub-contractors to you for payment or less sub-contractors on site

  • Machinery not being available on site

  • Reduction in workforce on site

It is at this stage you need to contact us.  We can assist in preparing for such circumstances by carrying out visits to site prior to the insolvency which will help ensure that no over-payments are made for work with latent defects. After the insolvency we can use the information to ensure the defects are rectified whilst having the opportunity to identify other latent defects.

We have extensive experience in this area and can provide both technical and procedural advice.  This will reduce the impact on time and costs that the builder’s insolvency has caused whilst maximising the claim. 

You may be tempted to determine the contract for non-performance.  This needs to be considered very carefully because when it is determined you no can no longer claim under the warranty.  


When the insolvency is announced you need to act quickly to mitigate your loss and use the cover you have taken out for the builder’s insolvency under the warranty provider’s cover, such as the Buildmark Choice policy. 

So if you think you may have a potential issue with your builder contact us to discuss further.