SUBCONTRACTORS PAYMENT GUARANTEE
If you’re subcontracting and your main contractor goes bust you could lose thousands in unpaid invoices. Builtin’s Subcontractors Payment Guarantee pays 75% of the money owed to you if this happens.
STONEWOOD HOMES GOES INTO LIQUIDATION
The Christchurch-based building franchise was placed into liquidation in February 2016 owing an estimated $15 million to unsecured subcontractors. Subcontractors with payment guarantee cover in place will receive 75% of the money they’re owed, up to the limit of their policy.
A supplier of fire protection equipment was left hundreds of thousands of dollars out of pocket when Mainzeal collapsed in 2013. The insurer paid $100,000 under their payment guarantee cover towards these losses.
RURAL SERVICES COMPANY GOES BUST
A company providing services to farms went into liquidation leaving a plumbing firm out of pocket to the tune of $10,000. Their payment guarantee policy reimbursed 75% of these losses.
HOW MUCH DOES IT COST?
The cost of working for months and not getting paid for it is easy to work out. What’s harder is knowing how that will affect your cashflow and ability to pay your own staff and suppliers. Compared to this, having payment guarantee cover in place is a good investment in managing the risk of a major bad debt affecting your business.
Premiums start from $380 + GST per year, depending on the amount of cover you need.
POLICY KEY FACTS
This is meant as a summary of the most important items of the policy. For a complete understanding of what it does and doesn’t cover you should always read the full policy wording.
If your main contractor becomes insolvent we will pay 75% of the money owed to you, up to your chosen maximum limit per year.
WHAT'S NOT COVERED
- Contracts already in place prior to the policy being taken out
- Defaults occurring within the first thirty days of the policy starting
OTHER THINGS YOU SHOULD KNOW
- A franchise of $2,500 exists for each claim. This means that claims for amounts below the franchise limit will not be accepted. However, for claims above the franchise limit no excess is payable.
- You need to have had a written contract with the insolvent contractor for the work done