Understanding Insurance Backed Guarantees: Why they're essential for your home improvement project
18 Jun 2025
What if something goes wrong after you've invested in home improvements? That's where an Insurance Backed Guarantee can help.
When you invest in home improvements, whether it’s new windows, a new kitchen or bathroom, an extension, you’re not just making your home more comfortable or attractive. You’re spending thousands of pounds that should add value to your property for years to come.
But what if something goes wrong after the work is done? It’s an unfortunate scenario, but it can happen.
It’s easy to assume the contractor’s guarantee will cover the faults. But if the installing company ceases to trade, where does that leave you?
This is where an Insurance Backed Guarantee (IBG) can help works that can be covered under the installing companies warranty.
What is an Insurance Backed Guarantee (IBG)?
An Insurance Backed Guarantee is a specialist type of financial protection that can protect you in the event that your installer ceases to trade during the guarantee period.
If your installing company has issued you with a IBG you may be able to claim for works to be carried out, repaired or replaced under the terms of the IBG insurance, which may be covered by the installing company’s original guarantee.
An insurance backed guarantee is valuable financial protection for you and your home, but make sure your tradesperson can provide you with your own guarantee in writing.
Make sure that your trades person is in an IBG scheme and you have applied for the insurance upon completion of works.
Let’s say you had new double-glazed windows installed and within the guarantee period a problem arises, and your installer has gone out of business, you’re left to cover the cost of repairs yourself. If you had an IBG in place this may well cover the guarantee period and replace or repair the installation.
Think of it as a fail-safe for your project. It’s not about expecting something to go wrong, but about ensuring you’re not left unprotected if it does.
Why homeowners should care
Unfortunately, even good companies can go under.
Economic downturns, supply chain issues, staff shortages, or personal circumstances can all contribute to these challenges. Without an IBG, a company’s guarantee becomes worthless once they ceases trading.
And it’s more common than you think. Each year, thousands of UK homeowners are left with no legal or financial recourse when contractors fold.
An IBG can provided reassurance:
If something goes wrong under the terms of the guarantee the replacement may well be covered under the financial protection of an IBG
Your investment can be financially protected, even up to years from installation.
You’re working with a legitimate, accredited contractor (only approved businesses can offer this protection)/
What does an IBG cover?
An IBG usually mirrors the terms of your original contractor’s written guarantee. This might include:
Installation issues
Product failure
It won't cover issues outside of the contractor’s control, like damage caused by general wear and tear, misuse, or external events like flooding or structural problems.
And it’s not a replacement for product warranties provided by manufacturers; it’s another layer of protection. Instead, it complements the overall package of consumer protection.
Who can provide IBGs?
Insurance Backed Guarantees are only available through FCA-regulated insurance providers. Reputable trade bodies, such as the Consumer Protection Association (CPA), only work with vetted insurers and ensure their members offer IBGs as standard.
When you choose a CPA-accredited contractor, you can expect:
A written guarantee from the installer
Deposit protection and clear terms
Questions to ask before signing a contract
Before you agree to any home improvement project, ask your contractor:
Do you offer an Insurance Backed Guarantee?
Who is the policy underwritten by?
What exactly does the guarantee cover, and for how long?
Will I receive a certificate of insurance once the job is complete?
If the contractor can’t provide clear answers or seems unsure, it’s a red flag. A reputable company will be able to guide you through the process with confidence.
Home improvements are a big commitment, and they’re not something you should risk without the proper financial protections in place. An Insurance-Backed Guarantee is a simple yet powerful way to make sure you don’t lose out if something goes wrong, after the installation has been complete and if the installing company is no longer trading.
It’s not just a piece of paper. It’s a safety net.
