What's an IBG?November 18th 2015
Now, for those of you with long-standing relationships with Japanese Knotweed Solutions; for those of you who are familiar with INNSA or for those of you who dabble in English, this probably seems a redundant question, but I am constantly surprised by the confusion that this issue causes.
The simple answer is that an Insurance-Backed Guarantee (or IBG) is a guarantee, which is backed by insurance. The term “insurance-backed warranty” is also used.
For those of you who aren’t familiar with Japanese Knotweed Solutions’ invasive plant remediation programs, here’s a quick summary of the terminology that we use:
- Warranty – a period of time where JKSL will regularly come to your property, inspect the site and carry out treatment (normally herbicide application) as required.
- Guarantee – a period of time where JKSL will not regularly inspect the site, but will attend site if there is re-growth – and carry out treatment, as above.
Japanese Knotweed Solutions have offered insurance backing for both our Warranties and Guarantees for over ten years.
Now here is the first significant question: What does the insurance cover?
Put simply, this kind of insurance is in place to cover the eventuality that a company goes into administration, bankruptcy or ceases trading and is unable to fulfil its obligations to its clients. So if you get unexpected re-growth, you call your provider and you find that they don’t exist anymore, then you can claim on your insurance, and pay another company to complete the works.
I am unaware of any policy that will pay you if you get re-growth, or if there is damage to your property due to Japanese knotweed (unless it is caused by the contractor’s incompetence). You’re better off buying a lottery ticket,
Insurance backing must be issued by an external insurer to be reliable, and under UK law, this company must be registered with the FCA (the Financial Conduct Authority). While I am aware of contractors in any number of trades who moonlight as Japanese knotweed “specialists”, I am unaware of any invasive weeds contractor who doubles up as an FCA-approved insurer.
So what you need, in order to have a meaningful IBG, is some form of certification from an external company (who will be registered here).
I have seen more than one company offering “£5 Million Insurance-Backed Guarantees”. The giveaway here is the preposterous sum quoted. When you ask questions of this type of “cover”, you will almost invariably find that the company is telling you that their Professional Indemnity insurance will pay out if you have a problem. If they’re insured, this is the case whether they give you a guarantee or not.
This is only the case where the company has been negligent – and there are many problems with this: firstly, you have to sue the company, and prove in court that the re-growth was due to the contractor’s negligence, which will be a lengthy, expensive and difficult process. Secondly, it is unlikely that the PI policy will cover you for consequential losses – such as loss of value on a property. Thirdly, this cover offers absolutely no recourse whatsoever if the company goes bust, because once the company stops paying the premiums, the insurance ceases to be valid.
Let’s be clear – no matter how many seals, or frills, or gold brocade the certificate has, or how many millions of pounds the “guarantee” claims to be worth, the fact is this: unless it’s backed by an external insurer, it’s worth nothing, and it will not protect you.
Once a company goes bump, there is no more money in the pot to continue the works on your property, or to carry out treatment of any re-growth which occurs after the treatment is complete. Only an external insurer can provide protection against this.
This is why mortgage lenders ask for insurance-backed guarantees. This is why all INNSA members issue IBGs as standard for all residential herbicide treatment projects. This is why JKSL have been issuing these types of products for over ten years (and were the first in our industry to do so).
Japanese Knotweed Solutions herbicide treatment plans have over 99% success rate, based on almost 15 years of data, and a sample size running into the thousands of client sites – so you can be confident that you won’t need to claim on your guarantee – but nevertheless, we offer peace of mind and insurance backing as standard for all residential herbicide treatment projects, and we can offer the same as part of our works package for commercial clients too.
So don’t be misled or confused about what you need – come to us, and we will offer it as standard.
Chris Oliver, Operations Manager, Japanese Knotweed Solutions Ltd