[slideshare id=27977111&doc=take-20financial-20risk-20neck-20off-20the-20line-131106143140-phpapp02]
The financial risk shifting battle is a topic we’ve addressed a lot here recently, and something getting ink elsewhere (see, for example this ENR.com article: Owners Shift More Financial Risk]. All of the work we’ve put into the topic was condensed into a Construction Credit Education Webinar presented earlier today. The slides from the Webinar, and a video of the same, is in the above Slideshare widget.
In the construction industry, the fact is that property owners and general contractors try to shift the risk of non-payment or financial hardship down the contracting chain. In their September 2013 Risk Summit at the McGraw Hill headquarters in Manhattan, ENR highlighted some of the shady risk shifting practices: “sitting on invoices, withholding final payments for years or inserting favorable dispute-forum-selection clauses.” Risk shifting happens in above-the-board ways, too, with pay when paid clauses and other onerous construction contract provisions.
The financial risk tug of war is not new. In fact, as explained in this Webinar, it has transgressed for over 200 years. Even Founding Father Thomas Jefferson weighed in on this by introducing the first mechanics lien legislation in 1791, and therefore, setting forth a consistent high level public policy in America that financial risk should be shouldered by those at the top of the contracting chain…not the bottom.
So, you may wonder, why is it so hard to get paid?
This nation’s policies, that precise question, and what your company can do to insulate itself from risk is all discussed in this Webinar. Enjoy!
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