How do I protect myself against the insolvency of the construction company?

Hello! Our preferred home builder offers a completion guarantee as an insurance surety in the amount of 5% of the net construction contract sum.

A completion guarantee is great. But why only 5%? How is it with you? How can I best protect myself against the company going bankrupt?

Background: I have informed myself about credit reports. These are not very meaningful as I read. A completion guarantee is probably the best. But is there one for the entire project or are the 5% common?

Thanks in advance!

How can I best protect myself against the company's bankruptcy?

Sensible payment plan. Maybe you can also get a guarantee/bond for the entire amount (unusual) - but the builder will charge you dearly for it, as he also has to pay for it (1.5-2% of the construction costs).

Maybe you also get a guarantee/bond for the entire amount (unusual) -

Something like that is unusual, right? What clause did/do you have in the contract, for example?

Something like that is unusual, right? What clause did/did you have, for example, in the contract?

We had built with individual trade contracts. Just as it often happens on construction sites. The contract was a handshake (at least for a little more than half of the trades) - no guarantees, withholdings, or anything like that.
Construction volume approx. €500k (excluding land) - all trades (partly also from abroad) worked according to arrangements - even after completion. However, we were on the construction site daily (my ex took over the site management).

Reasonable payment plan.

There is actually not much more to say. Just don’t (over)pay in advance. If something happens, at most the construction will be halted until everything is clarified. Afterwards, work will continue with other companies. The worst thing that can happen is having paid too much and later not having enough money available to complete the house.

Check the house builder beforehand. creditreform etc pp