Why should I credit check my IT services provider?

Your IT provider holds your data, runs your infrastructure, and maintains your business-critical systems. If they enter insolvency: your servers may be switched off (hosting, cloud), your support contract is void, your data may be inaccessible (if stored on their infrastructure), and the migration to a new provider takes weeks or months. The operational disruption far exceeds the financial loss.

What IT companies should I credit check?

Any IT company your business depends on: managed service providers (MSPs), hosting companies, SaaS providers (especially smaller ones), software development houses building custom applications, IT support companies, cybersecurity firms, and cloud migration consultancies. The risk is highest with smaller companies where your contract represents significant revenue to them.

What are the warning signs in IT companies?

Red flags: revenue declining while staff costs remain fixed (burning cash), loss of key technical staff (they know the company is in trouble), delayed product updates or patches (investment has stopped), increasingly slow support response times, accounts overdue at Companies House, directors resigning, and requests to change payment terms to shorter cycles.

What happens to my data if my IT provider enters insolvency?

It depends on your contract and the insolvency type. In administration: the administrator may continue services short-term (if it helps sell the business). In liquidation: services stop. Your data is on infrastructure that may be powered down. You have a right to your data (it is your property), but recovering it from a liquidator who has no staff to help is practically difficult. Ensure you always have independent backups.

How do I protect myself from IT provider failure?

Key protections: maintain independent backups of all data, ensure your domain names are registered in YOUR name (not the provider), document all passwords and access credentials independently, include source code escrow in bespoke development contracts, ensure your SLA includes data return provisions on termination, and keep a secondary provider relationship warm.

Should I check SaaS providers or just on-premise IT companies?

Both. A SaaS provider failing means your application disappears overnight. Unlike on-premise software (which continues working), SaaS stops the moment servers are switched off. Smaller SaaS companies (under £5M revenue) are higher risk. Check their financials, runway (how many months of cash do they have?), and customer concentration. Enterprise SaaS with thousands of customers is lower risk.

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Tech Supplier Risk

IT Services Credit Check: If They Fail, Your Systems Go Dark

Your MSP, hosting provider, or SaaS platform holds your data and runs your operations. If they enter insolvency, your business stops. Check their financial health before you sign the contract.

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Check an IT services company

Enter the company name or number. See financial health, cash runway, director history, filing compliance, and insolvency risk. Know whether this provider will be here next year.

The real risk: operational disruption

When an IT provider fails, the financial loss (the contract value) is usually the smallest problem. The operational disruption is what hurts: systems down, data inaccessible, staff unable to work, customers unable to be served. A 2-week outage while you migrate to a new provider costs far more than the original contract.

Real scenario: MSP enters liquidation on Friday

Monday morning: your email is down, your hosted applications are inaccessible, your backup server (hosted by the same MSP) is unreachable. The liquidator has no technical staff. The data centre wants payment to keep servers running. You have no admin passwords because the MSP "managed" everything. Estimated time to recover: 2 to 4 weeks. Cost: £50K to £200K in lost productivity, emergency migration, and data recovery.

Warning signs in IT providers

Support response times increasing. Tickets that used to be answered in 2 hours now take 2 days. Staff have left and not been replaced. The provider is cutting costs to survive.

Key engineers leaving. The lead engineer who built your infrastructure resigns. Technical staff leaving an IT company is a strong signal (they have visibility of the order pipeline and financials).

Asking for upfront payment. Provider that previously invoiced monthly now asks for quarterly payment in advance. They need the cash to meet payroll. This is a cash-flow survival tactic.

Product development has stopped. No updates, no new features, no security patches. The company has stopped investing in the product. They are either selling or dying.

People working with laptops at a table — Campaign Creators / Unsplash

Protect yourself from IT provider failure

Independent backups

Never rely solely on your provider for backups. Maintain your own copy of all data in a location you control. Test restore procedures quarterly. If the provider disappears, you can rebuild from your backup.

Own your domain and DNS

Register domain names in YOUR company name, not the IT provider. If they fail, you retain control of your email routing, website, and all public-facing services. Losing your domain is catastrophic.

Document all credentials

Maintain an internal password vault with admin access to all systems. Do not allow the IT provider to be the sole holder of any password. If they disappear, you need to access your own systems immediately.

Source code escrow

For bespoke software, use a source code escrow agreement. The code is held by a neutral third party and released to you if the developer enters insolvency. Without it, you have software that nobody can maintain.

Check your IT provider's financial health now.

A Quick Check (£29) analyses the IT company across 72 signals from 12 UK data sources: financial health, cash position, director track record, filing compliance, and insolvency risk. Know whether your provider will still be operating in 12 months.

Quick Check (£29) Monitor your IT suppliers (£19.99/mo)

Monitor IT providers continuously

IT providers can deteriorate quickly (losing a key contract can make a small MSP unviable within months). RecoupIQ monitoring (from £19.99/mo) alerts you within 24 hours of any distress signal: late filing, CCJs, director changes, gazette notices. Start planning your migration before the provider enters insolvency. Available via the web dashboard or the Microsoft 365 Trust Check app. RecoupIQ is a Microsoft partner.

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Last reviewed: July 2026. General information for UK businesses. Not financial advice. RecoupIQ Ltd, Company No. 16947526, ICO ZC077511. Microsoft Partner.