What is an Insurance Backed Guarantee (IBG)?

What is it, and how can one help protect your investment?

Although home improvements are one of the most secure kinds of financial investment, there is one risk that is sometimes overlooked:

While a contractor's company guarantee can cover faulty workmanship and materials, it is only valid if the contractor is still in business or is able and willing to honour his guarantee if he is not.

Thousands of businesses close yearly due to bankruptcy, liquidation, or even the owner's death. That's where an Insurance Backed Guarantee (IBG) comes in, it will safeguard your financial investment by mirroring the conditions of your contractor's original guarantee if they cease to trade*.

Please note that this website is designed to provide you with general information only and does not attempt to give you financial advice on any particular aspect of home improvement or insurance-related products. If you have any doubt about your specific finance or insurance needs, consult a financial advisor.

Quick view guide

• So, What Is An IBG?
• What Are The Benefits of an IBG?
• Exclusions and Limitations
• Policy Complaints Procedure

• Who Are The Underwriters
• Is Any Tradesman Able To Offer A HomePro IBG
• When To Make A Claim Against Your IBG?

1. So, What Is An Insurance Backed Guarantee?

An Insurance Backed Guarantee underwrites your installing contractor's written guarantee; it's usually for faulty workmanship and or faulty materials if the installing contractor ceases to trade - generally for financial reasons - but you should always check your policy Terms and Conditions as policies can differ. 

If the contractor ceases to trade* during the guarantee period, and you have reason to claim against the guarantee for faulty workmanship or materials, the policy will be in place to cover the cost of an approved contractor to remedy the work on a valid claim.

Not all Insurance Backed Guarantees are the same; the level of cover provided by your HomePro Insurance Backed Guarantee will depend on the type of policy you're given – you should check your policy document – but the following can be covered:

Deposit Cover 

If the contractor ceases to trade* following the receipt of your Deposit and before work has started, the policy will enable you to recover your deposit to a maximum of £10,000 or 25% of the contract value, whichever is the lesser and depending on your policy wordings, or the Insurer will arrange for the works to be completed, with you paying no more than the agreed contract value.

Deposit cover generally lasts between 90 to 120 days; it comes into effect once the deposit payment has been made and will cease when work begins or after the period of deposit cover - whichever is sooner. Always ensure you have a written receipt of your deposit payment on headed paper or an order form.

Guarantee Period

The guarantee period of your Insurance Backed Guarantee often depends on the type of work you've done; you'll find your guarantee period listed on your certificate of insurance.

It can be anything from 1 year up to 10 years or more and comes into effect on the date your contract has been completed to your satisfaction, and all money has been paid - remember to go online and activate your policy so that we can send you your certificate of insurance. 

Your Insurance Backed Guarantee will expire at the end of your guarantee period, or at the end of your contractor's written guarantee period, whichever is sooner.

2. What Are The Benefits Of An Insurance Backed Guarantee

An Insurance Backed Guarantee provides financial protection and peace of mind in the unlikely event that your installing contractor ceases to trade* during their written guarantee period, as your Insurance Backed Guarantee will then come into effect for the remaining period of cover. 

If you're having Double Glazing work carried out, an IBG may also be a legal requirement, depending on whether your installing contractor will self-certify their work with a Competent Person Scheme such as FENSA or CERTASS. 

3. Exclusions and Limitations explained

As with most insurance policies, some aspects cannot be insured with an IBG, and limitations must be made on some of the aspects that are insured.

Below are some of the more common Exclusions and Limitations of IBGs (but always  refer to your policy documentation for your full list):

Exclusions
The excess amount as shown on your Certificate / Cover note or any defect that would not have been recoverable under the Contractor’s Written Guarantee.

Limitations
The policy provides cover where the contractor has ceased to trade* due to insolvency, which means, for a Limited Company; Receivership, Administration, or Liquidation and for sole-traders and Partnerships, the Bankruptcy of the proprietor(s).

For Deposit Protection, no more than 25% of the contract value to a maximum of £10,000, or the actual deposit paid, whichever is the lesser.

4. Policy Complaints Procedure

Any enquiries or complaints you may have regarding your insurance should be addressed to HomePro Insurance, Station View, Guildford, Surrey GU1 4AD, or phone 0800 131 0123.

Please quote your Certificate or Reference number so that your enquiry can be dealt with quickly.

In the unlikely event that your matter is unresolved once the above have been contacted,
you can then approach: The Financial Ombudsman Service, Exchange Tower, London E14 9SR, telephone 0800 023 4567.

There are some instances where the Financial Ombudsman Service cannot consider complaints. This procedure will not prejudice your right to take legal proceedings.

5. Who Are Our Underwriters?

The underwriters of a HomePro IBG (shown on your certificate) are either Red Sands Insurance Company (Europe) Limited or Accelerant Insurance UK Limited.

Red Sands Insurance Company (Europe) Limited
Red Sands Insurance Company (Europe) Limited is registered in Gibraltar under company number 87598 and has a registered office at Level 3, Ocean Village Business Centre, 23, Ocean Village Promenade, Gibraltar and is licensed and regulated by the Gibraltar Financial Services Commission under the Financial Services (Insurance Companies) Act 1987 of Gibraltar.

Red Sands is a member of the UK’s Financial Services Compensation Scheme and the Association of British Insurers.

Accelerant Insurance UK Limited

Accelerant Insurance UK Limited is registered in England as a Limited Company, with the registration number 03326800, and the registered address of One, Fleet Place, London, England, EC4M 7WS.

Accelerant Insurance UK Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Accelerant Insurance UK Limited's Firm Reference Number on the Financial Services Register is 207658.

Accelerant Insurance UK Limited  is a member of the Financial Services Compensation Scheme (‘SSCS’) which is the UK’s statutory fund of last resort for customers of financial services.

Further information is available from the FSCS, who can be contacted by telephone 0800 678 1100 or 020 7741 4100 and by email via their website at: www.fscs.org.uk/contact-us/

6. Is Any Tradesman Able To Offer A HomePro IBG?

Not all contractors that operate in the home improvement industry can be associated with our IBGs, and here is why:

Only vetted contractors can apply
We extensively check all contractors who offer HomePro IBGs to ensure they have good financial and legal ratings and excellent references from previous customers.

If we haven’t carried out these checks, then we are unable to issue an IBG on the contractor's work.

You should always double-check a contractor's membership by calling HomePro on 0800 131 0123, and one of our Team will be able to check for you.

If you're a contractor, and you're interested in joining, click below:

Where can you find Contractors who use HomePro IBGs?
The HomePro Tradesman's Search Facility will provide you with a list of contractors in your area, most of which can provide HomePro IBGs.

7. When Can You Make A Claim Against Your HomePro IBG

Hopefully, your home improvement project will go to plan, and there will never be any need for a claim.

But, if you feel that you do need to make a claim, you can use the following guidelines to help speed up your claims process, but please note that your individual claims process may require a different process to the below and will depend on your policy wordings, the below is only a guideline. 

To claim on your Deposit Cover

• You must have a valid Certificate of Deposit Cover
• You must be within your deposit cover period (check your Deposit Cover Certificate, or give us a call if you're unsure)
• The installing contractor must have ceased to trade* without physically commencing work on site
• You have a written receipt from your installing contractor for the amount paid as a deposit

To claim on your IBG

• Your installing contractor must have completed the work to your satisfaction
• Your installing contractor must have ceased to trade*
  
• You must be within your Certificate of Insurance Guarantee Period as well as your installing contractor's written guarantee period 
• You will need to supply a copy of the contract or specification of work evidencing the Insured Works
• You will need to supply a copy of the Installing Contractors Written Guarantee in respect of the insured works 
• There must be a defect that occurred due to faulty materials or workmanship by the contractor, and the contractor ceased to trade* prior to the defect arising.

Changes to Double Glazing IBGs In June 2014 mean all applicable IBGs will also provide the homeowner with protection against breaches of the applicable Buildings Regulations.

* As defined in the policy wording
**Provided that the Contractor’s written guarantee is also transferable.

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