Insurance Backed Guarantees (IBG’s)

What is an IBG?

An IBG is an Insurance Backed Guarantee. Despite its name, it is not a ‘guarantee’ but a policy that backs a guarantee. IBGs are also known as Guarantee Insurance Policies and Warranty Insurance Policies. However, it’s important to remember that all three terms refer to the same type of insurance product.

The objective of an IBG is to provide insurance backing to a written workmanship and/or material guarantee, provided by a building contractor to a commercial or domestic customer. Written guarantees are often given in good faith. However, the most reputable contractors are unable to guarantee their solvency to the extent that they will be able to resolve defects for the length of the guarantees.

Therefore, many contractors and warranty providers in the UK request that customers are provided with an IBG. This ensures that recourse to the written guarantee is viable in the event that the original contractor ceases trading.

Who provides the guarantee covered by the IBG policy?

At completion of the roofer or tanking contract, it is the responsibility of the installer to provide a guarantee. It is the installer’s promise to the customer that they will rectify any issues that may arise with the installation following completion.

This guarantee is the subject of the Guarantee Insurance Policy, and the IBG policy will reflect its terms.

Why do warranty companies need IBG’s?

IBG’s provide an extra layer of security by assuring the written guarantee provided will be covered, even if the original contractor ceases trading. So, it means the warranty provider has recourse against a third party.

How Much Do IBGs Cost?

The cost of IBG policies can vary depending on the contract value of the works and the nature of works undertaken. Also, the company’s history and nature of the product required.

As a general rule on a “good risk” we would expect premiums on Piling IBG to be Starting at 5% of the contract value and for Tanking and flat roofs to be in the region of 3-5% of the contract value for UK based contracts.

We are also able to look at cover for UK companies that carry out installation in aboard, viewed on a case by case basis.

Examples of available IBG products

• Flat Roofs
• Timber Treatment
• Cladding
• Lateral Restraint/Structural Beams
• Structural Waterproofing
• Basement Tanking