Why Are Insurance Backed Guarantees Important?

January 3, 2022 0 Comments

As a consumer, it is important to know that you are fully covered in case something goes wrong when any business does home improvement work. Unfortunately, the reality is that in most cases you are not, either because the deposit has not been adequately protected or if you have been offered a surety policy backed by insurance, it could be at the wrong time … usually months after work. has been completed. A guarantee should be offered in advance to you, the consumer, this way you should not be exposed to financial loss if something goes wrong during the course of the project, as you will be protected and therefore eligible to make a claim on case you need it. .

Most companies would not risk their reputations by not offering an IBG (Insurance Backed Guarantee), they will choose to carry the correct credentials and accreditations and therefore offer what many others do not: a service that is creditable and guaranteed. . In the highly unlikely event that they stopped treading over the next 10 years, your project would still be covered, provided you have completed your IBG.

What does it cover? A deposit protection is insurance on the deposit that you, the consumer, pay to guarantee the work that will be done on your home. This insurance should cover at least a deposit of up to 25% of the price agreed with the installation company or £ 7,500, whichever is less. The policy covers the consumer for a period of up to 90 days from the date the deposit is paid.

For example: if you have paid a deposit to an installation company and then stop operating due to liquidation, receivership, administration or liquidation of the business due to bankruptcy, state retirement or the death of the principal (s), the deposit is refunded to you the consumer in full, or the work is completed by another company at the agreed equilibrium price.

In the unlikely event that the installation company ceases to operate, the IBG would cover the following:

“If a failure in the original works is discovered after the contractor has ceased operations, that is, due to Liquidation, Receivership, administration or dissolution of the company due to bankruptcy, state retirement or the death of the principal (es) and therefore cannot honor your warranty, you would file a claim. Another contractor would prepare a report to Insurance Backed Guarantee  determine the cause of the problem and if the failures had been covered by the terms of the contractor’s written warranty, then the Insurance will meet reasonable cost requirements to rectify defects up to the limit of the original contract price. ”

What is the term of the policy? Generally, the term of the policy is linked to the number of years guaranteed by the contractor, in most cases it is 10 years and the coverage begins from the date the contract is satisfactorily completed. Upon receipt of your signed agreement, the Certificate of Insurance is issued.

This guarantee granted must be valid for the entire time that the company is negotiating, so any valid defect that occurs will be corrected by said company, within the guarantee period of 10 years.