Insurance Backed Guarantee / Performance Bonds
An Insurance Backed Guarantee is useful protection for both you and your customers, in the unlikely event of your company ceasing to trade. It raises customers’ confidence, as property owners know that they are protected should your business unfortunately close…
The Guarantee is designed to cover faults appearing up to ten years after a company ceases to trade due to liquidation, receivership, administration or winding up due to bankruptcy, state retirement or the death of the principals.
Your customers receive peace of mind that, should you cease to trade, your insurer will honour any bona-fide claims under the original guarantee, for the remainder of the guarantee period. Almost any kind of work can be covered under an Insurance Backed Guarantee, including general building works, refurbishments and conversions, concrete repairs, external and internal wall insulation, roofing (including solar panels and cladding), car parks, flooring contractors, retaining walls, basements, underpinning, window, door and conservatory installers, carpenters, joiners, alarms, loft conversions, plumbing and heating engineers, and waterproofing.
There are also legal aspects to this, within the Department for Communities and Local Government Conditions of Authorisation. All licensed Competent Person Scheme Operators must demonstrate that mandatory financial protection is provided to the homeowner on all domestic installations in the event the original contractor is unable to do so, for example if they have ceased to trade. The insurance provided must cover breach of building regulations for a minimum period of six years, unless the product itself has a lesser manufacturer’s guarantee.
Main policy features *
The generic benefits of our Insurance Backed Guarantee scheme include:
- Direct access to underwriters to ensure quick quotations
- Capacity to provide up to £10m of cover per site
- Cover periods up to ten years
- Independent experts that specialise in Insurance Backed Guarantees
- Bespoke guarantees for contractors
- Cover on a per job or annual turnover basis.
There are further features and benefits, depending on the nature of your involvement. For contractors, it:
- Sets you apart from competitors that cannot offer such a guarantee and demonstrates the quality of, and confidence in, your products and workmanship
- Enables you to submit and win tenders on contracts where Insurance Backed Guarantees are a requirement
- Provides vital protection and security for the building owner and their funder.
In the construction trade, it supports you if you are:
- Building a house or commercial premises to occupy, sell or let
- Finishing construction work where the original contractor or architect went bust
- Making structural alterations or repair work to a business premises
- A new construction firm or one who cannot satisfy a warranty provider’s requirements.
As an investor, if you are:
- Buying or selling a house less than ten years old without a NHBC type guarantee
- Buying or leasing back commercial premises built in the last ten years
- Buying newly built or altered premises from liquidators or receivers
- Signing full repairing leases on any property built or structurally altered in the last ten years without a building guarantee
- Putting newly built premises into a pension fund.
As a construction manager, you could benefit from an Insurance Backed Guarantee if you are:
- Being asked to sign collateral warranties or having contractual issues regarding the construction or sale of newly built or structurally altered premises
- Having properties built or altered where someone involved in the build process has gone into liquidation thereby invalidating any warranties
- Buying premises where the permitted number of assignments has already been reached or exceeded.
* This information is a general guide only. Adler Fairways will assess your requirements and recommend a bespoke range of insurance solutions to meet your needs. As part of the quotation process, we will provide full details of the specific coverage, benefits, limits, premiums, exclusions, excesses payable, and any other policy conditions that would apply to the insurance we recommend for you. We currently only offer cover to businesses registered in England, Scotland, Wales, Northern Ireland, the Channel Islands and the Isle of Man.