What is an Insurance Backed Guarantee (IBG)?
Interested in an Insurance Backed Guarantee? Read our guide on where they can be used, how they work and how Compariqo can help you with one for your upcoming or ongoing projects.
An Insurance Backed Guarantee (IBG) is a type of financial guarantee that provides assurance to customers or clients that they will be compensated if a product or service fails to meet certain specified criteria or if the supplier fails to fulfill their contractual obligations.
An IBG is essentially a form of insurance that protects the customer or client against financial losses resulting from defects, non-performance, or other failures.
In an Insurance Backed Guarantee, an insurance company acts as a guarantor for the supplier or service provider. The insurance company issues a guarantee certificate to the customer or client, which outlines the terms and conditions of the guarantee and If the supplier fails to meet their obligations or if the product or service is defective, the customer can make a claim to the insurance company for compensation.
Here’s how it typically happens:
1. Agreement: The buyer and seller enter into a contract or transaction where a guarantee is required. This can include construction projects, home improvements, or the purchase of high-value goods.
2. Guarantee: The seller or contractor offers a guarantee to the buyer to ensure the performance or quality of the product or service. This guarantee may involve aspects such as workmanship, materials, or structural integrity.
3. Insurance Coverage: To back up the guarantee, the seller or contractor obtains an insurance policy from an insurer. The insurer agrees to cover the financial obligations outlined in the guarantee if the seller or contractor fails to meet them.
4. Claim Process: If the buyer experiences a problem covered by the guarantee, they can file a claim with the insurer. The claim will be evaluated to determine if it meets the terms and conditions specified in the guarantee and the insurance policy.
5. Financial Compensation: If the claim is approved, the insurer will provide financial compensation to the buyer, typically up to the limits specified in the insurance policy. This compensation can help cover the cost of repairs, replacement, or rectifying the issues outlined in the guarantee.
Insurance Backed Guarantees are commonly used in various industries such as construction, home improvement, and manufacturing. They offer peace of mind to customers by providing financial protection and recourse in the event of problems or failures.
It is important for customers to carefully review the terms and conditions of an IBG before entering into a contract or making a purchase to understand the extent of coverage and any limitations or exclusions that may apply.
Which types of work can an IBG cover?
Many house builders typically use an Insurance Backed Guarantee to cover what are considered high-risk areas by warranty providers such as basements and flat roofs. However, there are many other types of work and professions which can use an IBG, such as:
- Window, Door & Conservatory Installers
- Builders
- Contractors
- Roofers
- Carpenters & Joiners
- Plumbing & Heating Engineers
- Air source and ground source heat pumps
- Bathroom suppliers & installers
- Kitchen suppliers & installers
- Garden buildings
- Garage conversions
- Loft conversions
- Basement conversions
Find out more on what an IBG can cover >
Yes, Compariqo can offer you an instant quote on Insurance Backed Guarantee cover. Simply visit our IBG quoting form, and we can get your started today.