An insurance-backed guarantee (IBG) is the policy that pays for your workmanship warranty to be honoured if your business stops trading, and for renewables installers it is a consumer code obligation rather than an optional extra. Under the Renewable Energy Consumer Code, every member must insure the workmanship warranties they issue so the customer is protected against the installer ceasing to trade (RECC, 2026).
Most guidance on IBGs is written to reassure homeowners. This piece is written for the installer who has to buy, issue, and administer one, and who needs to understand how the IBG fits alongside MCS certification, deposit protection, and the consumer-code changes arriving in 2026. Get the mechanics right and the IBG becomes a trust-building sales tool, not just a compliance box.
Key Takeaways
- An IBG covers your written workmanship warranty so a valid claim is still met if your company ceases trading.
- Renewables consumer codes such as RECC require members to insure workmanship warranties, so an IBG is effectively mandatory.
- IBG terms commonly run 2, 5, or 10 years, and often need registering with the insurer to take effect.
- An IBG is not the same as deposit protection, which guards advance payments before the work is done.
- The redeveloped MCS Installer Scheme is reshaping consumer-code and financial-protection rules through to 31 March 2027.
What is an insurance-backed guarantee?
An insurance-backed guarantee is an insurance policy that sits behind the workmanship warranty you give the customer. If your business is trading, you honour your own guarantee. If your business ceases to trade, the IBG means an insurer steps in to meet a genuine claim instead. HIES describes it as cover for the installer's own written guarantee so a bona-fide claim is met by insurers if the company stops trading (HIES, 2025).
The distinction that trips installers up is between the guarantee and the insurance. Your workmanship guarantee is your promise. The IBG is the safety net that keeps that promise alive when you no longer can. A customer with a 10-year workmanship warranty and a matching IBG is protected for the full decade even if you retire, sell up, or close after year three.
Do renewables installers legally need an IBG?
There is no single law naming the IBG, but the practical answer is that you cannot operate compliantly in most of the market without one. RECC requires all members to insure the workmanship warranties they issue, specifically to protect consumers if the installer ceases to trade. Because consumer-code membership has underpinned MCS certification and grant access, the IBG has effectively been a condition of doing MCS-certified work.
TrustMark takes a similar line, expecting registered businesses to provide a minimum of two years of financial protection on completed work, covering both product warranties and workmanship (TrustMark, 2025). So whether you sit under RECC, HIES, or TrustMark, the obligation to back your workmanship with insurance follows you. Our MCS compliance guide sets out how these pieces connect.
Insurance-backed guarantee terms and activation
Terms vary by provider, but the common lengths across RECC-listed insurers are 2, 5, and 10 years. HIES likewise notes that guarantee periods can vary from 2 to 10 years, and that the IBG length may differ from the installer's own written guarantee. Some providers go further: Ark offers cover up to 12 years, and Peacock covers 10 to 12 years.
The rule that matters most on site is activation. With several providers the customer must register the policy with the insurer before it takes effect, and most require defects to be reported within 30 days of discovery. HIES states plainly that no cover is in place until the consumer has received their IBG certificate, and until the job is complete, defect-free, and paid in full. Issuing that certificate promptly is your responsibility, not the customer's.
- CPA: 2, 5, 10 year terms, deposit protection 120 days or more
- HIP: 2, 5, 10 year terms, deposit protection 90 days
- IWA: 2, 5, 10 year terms, deposit protection 90 days
- QANW: 2, 5, 10 year terms, deposit protection 35 days or more
- Ark: cover up to 12 years, deposit protection up to 120 days
- Peacock: cover 10 to 12 years, deposit protection up to 120 days
What is the difference between an IBG and deposit protection?
They protect different moments in the job. Deposit protection covers the money a customer pays before the work is finished, so if you take a deposit and then cease trading, that advance payment is refunded or the work is completed by another firm. An IBG covers the period after completion, insuring the workmanship warranty on finished work.
The figures differ too. HIES deposit and stage-payment protection covers up to 25 percent of the contract value, capped at £5,000, for 120 days. Deposit windows across RECC-listed insurers range from 35 days with QANW to 120 days or more with CPA, Ark, and Peacock. A customer buying a solar-plus-battery system typically benefits from both mechanisms at once, and our deposit protection guide covers that side in detail.
The IBG, MCS certification, and consumer codes
Historically the two were locked together: MCS certification required installers to hold consumer-code membership, and that membership carried the workmanship-insurance obligation. That link is now changing. Under the redeveloped MCS Installer Scheme, consumer-code membership is no longer a mandatory requirement, with MCS instead centralising complaint handling and strengthening financial-protection standards directly.
This matters for how you evidence protection to customers and grant bodies. The direction of travel is that MCS itself sets and checks the financial-protection bar, rather than delegating it entirely to the codes. Installers should track this closely, because it affects which membership and insurance you actually need to keep. The comparison in our HIES vs RECC guide explains how the two codes differ as the rules settle.
The scale of the market an IBG protects
Very busy, which is exactly why financial protection is under scrutiny. MCS recorded 170,000 certified renewable installations in the first six months of 2025, a 37 percent year-on-year rise, made up of roughly 120,000 solar PV, 20,000 battery storage, and 30,000 heat pump installs (MCS, 2025). Battery installs alone rose about 130 percent year on year.
More installations mean more live warranties, and more warranties mean more exposure if a firm fails. Consumer bodies have pushed financial-protection rules harder precisely because rapid growth attracts operators who may not last the full warranty period. For a reputable installer, a well-explained IBG is a competitive advantage: it signals that you expect to stand behind the work for a decade, and that the customer is covered even if you do not.
An installer's admin duties around an IBG
The paperwork is simple but unforgiving, because the cover can fail on a technicality. You must issue the IBG certificate to the customer, register the policy with the insurer where required, and make sure the job is fully completed, defect-free, and paid in full to the named business before cover applies. Missing any of these steps can leave a customer believing they are protected when they are not.
Keep the IBG certificate with the MCS certificate and the handover pack, so the customer has one place to find their insurer's name and claims route. If a defect emerges, remind the customer of the 30-day reporting window most insurers apply. Treating the IBG as part of a clean handover, rather than an afterthought posted weeks later, is the practical field habit that keeps claims valid and complaints rare.
Choosing the right IBG provider
The right provider depends on the guarantee length you offer and how the cover is triggered. Most RECC-listed insurers, including CPA, HIP, IWA, and QANW, offer 2, 5, and 10-year terms, so match the IBG length to the workmanship warranty you promise rather than defaulting to the shortest option. A 10-year workmanship warranty backed by a 2-year IBG leaves eight years of exposure the customer may not understand.
Look closely at the claims route, because it varies between insurers. Some refund the customer's deposit, while others take responsibility for finding a replacement contractor to finish or remedy the work. Deposit-protection windows also differ, from 35 days with QANW to 120 days or more with CPA and Peacock, which matters if your typical gap between deposit and install is long. Choose a provider whose windows and claims process fit how your business actually runs, not simply the lowest premium.
Frequently asked questions
Is an insurance-backed guarantee the same as a warranty?
No. The warranty is your own promise to put right defects in your workmanship. The IBG is a separate insurance policy that funds that promise if your business ceases trading. A warranty without an IBG collapses the moment the installer disappears, which is the exact scenario consumer codes such as RECC require the IBG to cover.
How much does an IBG cost the installer?
Costs vary by provider, contract value, and guarantee length, and are usually a modest per-job fee paid by the installer rather than the customer. Published fixed figures are rare, so the practical step is to request a quote from an approved provider such as QANW, CPA, or HIP for your typical job size and warranty term before you build it into your pricing.
Does the customer have to do anything for the IBG to work?
Often yes. Several insurers require the customer to register the policy before it takes effect, and most require defects to be reported within 30 days of discovery. Cover also depends on the job being complete, defect-free, and paid in full. Explaining these conditions at handover prevents a valid policy from being invalidated by a missed registration.
Do I still need an IBG under the redeveloped MCS scheme?
Financial protection remains central under the redeveloped MCS Installer Scheme, even as consumer-code membership stops being mandatory. MCS is strengthening financial-protection standards directly through to the 31 March 2027 transition. Installers should confirm current requirements with their certification body rather than assuming the old code-based rules still apply unchanged.
Does an IBG cover the product or just the workmanship?
An IBG typically covers your workmanship guarantee. Product faults are usually covered by the manufacturer's own warranty on the panels, inverter, or battery. TrustMark expects registered businesses to provide financial protection spanning both product warranties and workmanship, so check exactly what your chosen policy includes before you describe the cover to a customer.
A clear IBG process, issued cleanly at handover, is one of the simplest ways to raise customer confidence and cut complaints. Platforms like Reonic help installers keep certificates, warranties, and handover documents organised so the right protection reaches the customer every time.
