We highlighted back in October the fact that companies in the NZ construction sector continue to go bust, despite operating in a relatively strong economy, with robust ongoing demand for building projects.
As NZ insurance brokers, we live and breathe risk management for businesses such as yours. So, how can you take steps to ensure your business is protected when a construction client suddenly collapses?
Something you could consider for your business is the protection of the Personal Properties Securities Register (PPSR).
If you lease or hire out goods then your business could be at risk if the client defaults in the event of a collapse. The PPSR allows you to register a legal claim (or ‘security interest’) over property you have leased or hired out.
The PPSR website highlights that ‘Registration puts you in a better position to recover goods, or their value, should a customer default, giving you priority over creditors who’ve not registered an interest, and those who register after you.’
Likewise, the PPSR allows you to check that any pre-owned goods you’re buying, such as vehicles or machinery, don’t have outstanding credit owing on them. This prevents any shock repossessions of equipment that you believed you had purchased in good faith for your business.
There are a number of legal definitions you’ll need to understand, as well as a set process to take full advantage of the PPSR. As with anything that has legal and financial ramifications, it’s always worth seeking expert advice on what is required to best protect your business interests.
Bonded NZ is a business insurance broker in New Zealand and we specialise in construction insurance to help firms in the building industry manage their risk. For sound advice on how to protect your construction business, contact the team at Bonded NZ today.