Frequently Asked Questions
Q1.What’s the benefit of using a Construction Guarantee Services (CGS) member?
CGS is completely independent of any manufacturer and assesses potential members for technical competence, correct procedures, financial probity and, most importantly from a customer’s point of view, all members must be adequately trained in all aspects of Health and Safety.
All CGS members can offer the security of insurance to support their guarantees for timber, damp, wall ties and members of the Specialist Structural Waterproofing Group can offer insurance to support their structural waterproofing guarantees.
When comparing CGS members with other contractors you must ask yourself who vets those contractors, who determines their technical skills and are they Health and Safety trained and good enough to be acceptable to an insurance company?Top
Q2.If I am unhappy with the work or have a claim, who is responsible?
Whilst the contractor remains in business he is responsible for correcting his faults and for dealing with any claims.Top
Q3.What happens if a contractor has stopped trading?
Providing you have taken out an insurance policy CGS will, on behalf of Guarantee Protection Insurance Ltd (GPI), arrange for an independent inspection and assessment of your claim. If the claim is justified then GPI will meet the remedial costs (except for any agreed excess).
A deposit will be required to meet the cost of the inspection, but in the event of a claim being justified, this will be fully refunded. It is essential that all original documents required are available to ensure that a claim can be investigated and these are clearly listed in the policy document. Please note that photocopied documents are not acceptable.Top
Q4.What is an insured guarantee and how does that differ from an insurance-backed guarantee?
An insured guarantee is backed by an insurance certificate and policy specific to your property for either a 20 or 10 year period, issued by a UK based insurance company which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (FCA). CGS itself is a regulated company under the Insurance Mediation Directive 2000.
All insurance policies carry insurance premium tax (IPT), insurance-backed guarantees don’t, showing that they are not genuine insurance. See our leaflet under literature and check the Tick Boxes to determine whether you have an insured guarantee.
Insurance-backed guarantees usually consist of annual calamity insurance with the policy in the name of the guarantee company. The guarantee you get for your property is simply issued by the guarantee company and there is no actual insurance on your property. Should the guarantee company fail to make its annual payment then even the calamity insurance drops out. Three such “insurance-backed guarantee companies” have gone out of business within the 20 year guarantee period leaving the property owner with a useless piece of paper.Top
Q5.Other guarantee companies and manufacturers offer 30 year guarantees – your insurance is only for 20 years (where applicable)?
As far as we are aware the FCA has only approved long-term guarantees up to 20 years.
However, any guarantee or insurance is only as good as the security behind it. FCA regulated insurance provides a high level of protection and oversight together with a compensation scheme (see below). At the end of your 20 years secure protection, extended cover may be offered.
‘Insurance-backed’ guarantee companies and manufacturers are regulated by nobody and there is no compensation scheme, therefore there is no protection for the customer. Many manufacturers and guarantee companies have gone out of business, again leaving customers with worthless pieces of paper.Top
Q6.What happens if the insurance company fails?
As stated above, insurance companies are subject to a very strict financial regime.
It is remotely possible that an insurance company could go into run-off with insufficient funds in which case the Financial Services Compensation Scheme, to which all insurance companies must contribute, comes into effect whereby you will receive 90% of any claim.Top
Q7.What happens to the insurance if I sell my property?
The insurance relates to the property no matter who the owner is and therefore CGS do not need to be informed of any sale and there is no assignment fee necessary. You must make sure that you pass over to the new owner all the original documents that they will require should they need to make a claim.
Please remember that the contractor is responsible for claims whilst he is still trading and his guarantee may require assigning – please check.
Failure to assign a contractor’s guarantee does not affect the insurance policy in the event of the contractor ceasing to trade.Top
Q8.What happens if CGS goes out of business?
The insurance is with the Insurer not with CGS so it does not affect you if CGS ceases trading.Top