Why Insurance Backed Guarantees in glazing? – as published in Glass Times mag
Every installation business within the glazing industry is supposed to ensure that the consumer has financial protection when replacing windows in a property. The residential sectors handle this differently depending on the market, but such is the failure rate of work done and of glazing businesses that Insurance Backed Guarantees (IBGs) are the current sensible solution within glazing.
We know that other industries do it differently, yet their competence structures are different, as is related consumer behaviour. When electrics fail and the lights are out or a boiler is not working and the home is cold, the dominant consumer response is to hire an emergency repair specialist due to the impact such faults have on a family.
Yet with glazing the consumer has time to get the issue sorted and such is the trading profile of our industry that guarantees often become worthless due to company closures. Indeed, the only body out there telling installers to not use IBGs displays all the signs of a business on the ropes itself and the validity of such a guarantee is therefore hugely debatable.
Where IBGs will go in our industry is yet unclear. The government stipulates a minimum level of 6 years protection but has pushed other sectors towards 25 years cover. Our products are improving and the longevity is not an issue, however our installation standards are still behind many other sectors.
The accepted norm of 10 years of protection for more than just building regulations has been in our market for almost two decades and until standards of work on-site improve it seems risky to reduce from this position. Indeed, whilst regulation does not push for our current standard, any reduction will inspire yet more concerns about our sector from the consumer protection bodies who often comment on us.
The considerations for any insurer with glazing is the longevity of the risk. This is what makes it seem unattractive to new entrants and why there are few recognised insurers in this space beyond GPI. Without connections to competent person schemes to help control risk, it would be unlikely that consideration for our sector would even occur beyond the specialists.
Our installers interact though the 10+ brokers in the market, and the choice is dependent on what they want from an IBG Broker firm. It is for this reason that Certass has ensured to enable choice so that you can either simply comply with the rules if it is a price issue, or gain the benefit of additional services to aid your business to operate.
There has been continued debate with government on how to innovate the sector, but whilst Westminster is keen to maintain the balance of products, installer standards and consumer protection, IBGs will remain our dominant position.