Is the Guarantee really a Guarantee ?

Everyone has heard stories of dodgy double-glazing firms who duck out of their guarantee obligations by folding the company and then starting it up again under a different name.  In order to combat this practice and give consumers some come back "insurance-backed guarantees" have been introduced.  Basically an insurance-backed guarantee works because the insurance company, and not the installer, takes responsibility for the guarantee and so will honour it if the installer folds.

Not all insurance-backed guarantees are the same however and you must ensure that the guarantee offered to you is underwritten with an insurance policy issued by a DTI authorised and approved Insurer, and rigidly subject to the following criteria. Any departure from any of those prerequisites will so weaken the entire cover as to reader it worthless

• There must be no cancellation clause since otherwise the Insurer will be able to "escape" the risk if so desired.
  

• The insurance must take the form of a direct contract between the Insurer and the insured without the involvement of any other party in the relationship.
  
  
• The ten-year term must be fully prepaid to the Insurer at the outset by way of a single premium.
  
  
• Any arrangement whereby a scheme administrator pockets the ten years premium and then renews an annual policy indemnifying him personally is not acceptable.
  
  
• Full documentation must be issued to the Insured and where this consists of a certificate of insurance issued by the administrator and a master policy issued by the Insurer, then both documents must be issued. Without this safeguard false claims and omissions in the administrator's certificate of insurance will go undetected.
  
  
• The benefits of the insurance must be freely and automatically transferred to subsequent owners of the property.
  
  
• There must be no overall claims ceiling or limit since this sum could be exhausted thereby leaving later claimants without indemnity, and each installation (and particularly commercial installations) must be fully insured for its entire individual value, including VAT where applicable.
  
  
• All parties to the insurance - administrator, broker, insurer - must be clearly identified in the documentation.
  
  
• No part of any claim (apart from minor excess, paid by the claimant) must be payable by any party other than the Insurer, and any arrangement whereby the administrator is responsible for the first tranche of claims is  unacceptable. This avoids the situation where an administrator who is responsible for, say, the limit of £250,000 of claims ceases trading and avoids his liability, or simply "disappears" thus leaving no cover in force since the Insurer only becomes liable after the first £250,000 has been paid.