Guarantees & Warranties: What Tradespeople Should Offer & Insurance-Backed Options

Summary

Every UK tradesperson providing services to domestic customers gives an implied statutory guarantee under the Consumer Rights Act 2015 — work must be performed with reasonable care and skill, in a reasonable time, and at a reasonable price (if not fixed). If the work is defective, the customer is entitled to have it remedied (repaired or repeated) at no additional cost. This is not optional — it is a legal right that exists regardless of what your T&Cs say.

Beyond statutory rights, there is a significant commercial argument for offering explicit written guarantees. Customers are increasingly aware of their rights, and a tradesperson who says "I guarantee my work for 5 years" wins more business than one who says nothing. In sectors like roofing, damp-proofing, double glazing, and timber treatment, explicit long-term guarantees (10–20+ years) are standard and expected.

The weakness of a contractor-backed guarantee is that it only has value if the contractor is still trading. A guarantee from a sole trader who retires or becomes insolvent is worthless. Insurance-backed guarantees (IBGs) address this: they are underwritten by an insurance company, so if the contractor ceases trading the customer can still make a claim. IBGs are increasingly expected by mortgage lenders and property conveyancers.

Key Facts

• Statutory right (Consumer Rights Act 2015): Work must be of satisfactory quality, fit for purpose, and performed with reasonable skill and care — 6-year limitation period (England/Wales), 5 years (Scotland)
• Consumer Rights Act remedies: Customer entitled to one repair/redo attempt; if that fails, partial or full refund
• You cannot contract out of statutory rights: Any T&C term that excludes or limits these rights below the statutory minimum is void
• Workmanship guarantee: Written guarantee from the contractor covering workmanship for a defined period (typically 1–10 years)
• Materials guarantee: Manufacturer's guarantee on products installed — passes through to customer; contractor's obligation is to ensure materials are of satisfactory quality
• Insurance-backed guarantee (IBG): Policy underwritten by an insurer; if contractor ceases trading, customer claims on the insurance policy
• IBG cost: Typically £50–250 per job depending on contract value and guarantee period; passed to customer or absorbed as a cost of winning business
• IBG providers: Guarantee Protection Trust (GPT), Platinum Seal, CheckaTrade/Which? backed schemes, trade body schemes (NFRC 20-year, NHBC Buildmark)
• NHBC Buildmark: Standard new build warranty — 10-year coverage; builder must be NHBC registered; not available for renovation work
• Property sale implications: IBGs transfer to new owners; standard contractor guarantees may or may not be assignable
• Deposit protection: Some IBG providers also offer deposit protection — if contractor takes a deposit and goes out of business before starting, the deposit is refunded
• Trade body standards: Membership of FMB, NFRC, NICEIC requires minimum standards; trade body may assist with disputes (but does not guarantee workmanship)
• Performance bond: For larger commercial contracts, a performance bond (issued by a bank or insurer) guarantees contractor performance — different from an IBG

Quick Reference Table

Detailed Guidance

Statutory Rights — What the Law Already Requires

The Consumer Rights Act 2015 implies the following terms into all service contracts with domestic customers:

1. Reasonable care and skill: Work must be of the standard expected of a competent tradesperson. If you claim to be a specialist, the standard expected is higher.

2. Reasonable time: Work must be completed in a reasonable time if no specific date is agreed.

3. Reasonable price: If no price is agreed, the customer pays a reasonable price. If a price is agreed, the customer pays that price.

Remedies for defective work under the Consumer Rights Act:

• First remedy: repeat performance (re-do the work or repair the defect) at no cost to the customer, within a reasonable time and without significant inconvenience
• If repeat performance is impossible or not provided within reasonable time: price reduction (partial refund) or, in some cases, full refund
• Limitation period: 6 years from the breach of contract to bring a claim (England/Wales); 5 years in Scotland

What contractors cannot do:

• Claim in T&Cs that they have no obligation to return to remedy defects
• Say "we do not offer any guarantee"
• Require the customer to pay for repairs to their own defective workmanship

Being aware of this protects you too — a customer cannot demand a full refund for minor defects if you have offered to remedy them first. The Act gives you the right to a second attempt before refund becomes the remedy.

Writing a Workmanship Guarantee

A written workmanship guarantee (beyond the statutory minimum) is a marketing and retention tool. It demonstrates confidence in your work and gives customers peace of mind. Key elements to include:

What is covered: "All workmanship carried out by [Company Name] in connection with [type of work] at [address] is guaranteed against defects in workmanship for a period of [X years] from the date of practical completion."

What is not covered:

• Damage caused by customer misuse or accident
• Normal wear and tear
• Defects caused by third-party work not by this contractor
• Materials damage beyond your control (manufacturer defect covered by manufacturer's own guarantee)
• Damage caused by subsidence, flood, fire, or other insurable events

How to claim: "Defects must be reported in writing within [X] days of discovery. We will attend to inspect within [Y] days of receiving written notice."

Transferability: State clearly whether the guarantee transfers to future owners if the property is sold during the guarantee period. "This guarantee is personal to the original client and does not transfer to subsequent owners" — or — "This guarantee is transferable to future owners of the property for the remaining guarantee period."

Company cessation clause: If you do not have an IBG, be honest: "This guarantee is backed by the financial standing of [Company Name]. In the event that the company ceases to trade, the statutory rights of the customer under the Consumer Rights Act 2015 remain in force."

Insurance-Backed Guarantees (IBGs)

An IBG involves a third-party insurer underwriting your guarantee. If your company ceases to trade (insolvency, retirement, closure), the customer can claim directly against the insurance policy for the cost of remedying defective work.

How to obtain an IBG:

1. Join an IBG scheme provider (GPT, Platinum Seal, Guarantee Protection Insurance). Annual membership fee applies.

2. For each qualifying job, complete the IBG application (usually online). Provide job details, contract value, scope, and customer information.

3. Pay the IBG premium for that job (typically a percentage of contract value or a fixed fee).

4. The scheme provider issues a guarantee certificate to the customer, underwritten by an insurer (Lloyds of London, AXA, or similar).

IBG providers typically have minimum standards: you must be solvent, have public liability insurance, and in some cases hold a trade qualification or trade body membership.

Scheme selection: Different IBG providers cover different trades. Roofing guarantees are typically provided through NFRC-connected schemes. Damp-proofing through PCA schemes. General building work through FMB or GPT. Some mortgage lenders have preferences — check if your customer's lender specifies a particular scheme.

Trade-Specific Guarantee Standards

Different trades have established norms for guarantee length and content:

Roofing: NFRC member contractors can offer a 20-year insurance-backed guarantee on flat roof systems and pitched roof work. Manufacturer guarantees on membrane systems (Firestone EPDM, Sika Sarnafil) are typically 20–25 years on materials. The contractor-backed workmanship element is separately insured.

Damp-proofing and timber treatment: PCA (Property Care Association) member contractors offer 20–30-year guarantees on chemical injection damp-proof courses and timber treatment. These are almost always IBGs underwritten through the PCA scheme.

Double glazing and windows: FENSA and CERTASS registered installers provide a Building Regulations completion certificate and offer manufacturer/installer guarantees on sealed units (typically 10 years on double-glazed sealed units). IBGs are standard in this sector.

New build: NHBC Buildmark is the standard warranty for new UK homes. Covers the builder's obligations for 2 years (defects liability period) and structural defects for years 2–10. Requires NHBC builder registration. Premier Guarantee and LABC Warranty are alternatives.

General building work (extensions, renovations): Statutory rights apply; written workmanship guarantee of 1–2 years is typical; IBG available through FMB or independent scheme providers.

Deposit Protection

Some IBG scheme providers offer deposit protection alongside the workmanship guarantee. This covers the customer's deposit (up to a specified amount) if the contractor takes the deposit and then ceases trading before starting work.

Deposit protection is particularly valuable for:

• Large projects where significant deposits are required
• Customers commissioning work from a new or recently established contractor
• High-value specialist work (new build, large extension)

Offering deposit protection alongside a workmanship IBG is a significant competitive differentiator, particularly for customers who are cautious about paying deposits to small contractors.

Commercial Contracts — Performance Bonds

For commercial clients (landlords, housing associations, developers), a performance bond may be required. A performance bond is not an IBG — it is a financial instrument issued by a bank or specialist bond issuer that guarantees the contractor will complete the works to specification. If the contractor defaults, the bond is called and the principal (customer) receives a payment to cover the completion cost.

Performance bonds are typically 10% of contract value. They are standard on public sector contracts over certain values and increasingly required on private commercial contracts. Applying for a performance bond requires a credit check and financial assessment of the contractor.

Frequently Asked Questions

If I offer a written guarantee, does it replace the statutory rights?

No. A written guarantee is additional to statutory rights, not a replacement. You cannot exclude statutory rights with your own guarantee. Your written guarantee may offer more (longer period, clearer process) but it cannot offer less than the Consumer Rights Act 2015 minimum.

Do I have to return to fix a defect if the customer never paid the final invoice?

This is a genuine grey area. If the customer has withheld payment for disputed reasons related to the defect, your obligation to remedy and their obligation to pay are interlinked — you may argue you will not return until payment is made, and they may argue they will not pay until the defect is fixed. In practice, a mediated resolution is almost always preferable to a stand-off. If the customer withheld payment for reasons unrelated to the defect, you have stronger grounds to insist on payment.

What happens if I give a 10-year guarantee but close my company in year 3?

Without an IBG, the customer's guarantee is worthless against your closed company. They would need to trace you personally and pursue you through the courts as an individual, which is difficult and uncertain. This is why IBGs are important for long-period guarantees — they protect the customer regardless of what happens to your business.

Should I charge for offering a guarantee?

No — in practice, the cost of an IBG (£50–250) should be built into your job price rather than itemised as an extra. Quoting a "guarantee premium" separately looks like nickel-and-diming. Instead, price IBGs into your overhead and quote a comprehensive price that includes the IBG as a benefit of working with you.

Regulations & Standards

• Consumer Rights Act 2015 — implied terms for services; remedies for defective work; cannot be excluded in consumer contracts

• Unfair Contract Terms Act 1977 — contractor cannot exclude liability for negligence causing personal injury or property damage

• Financial Services and Markets Act 2000 — IBG providers must be regulated by the FCA if providing insurance-backed products

• Insurance Act 2015 — duty of fair presentation for insurance policies including IBGs

• Citizens Advice — Consumer Rights Act for Services — plain-English guide to consumer rights for defective work

• Guarantee Protection Trust (GPT) — IBG scheme for tradespeople

• NHBC Buildmark Information — new build warranty scheme

• PCA Guarantee Schemes — damp-proofing and timber treatment guarantees

• FMB (Federation of Master Builders) Warranty Information — builder warranty guidance

• terms conditions — T&Cs to accompany your guarantee

• building regs overview — Building Regs context for warrant-compliant work

• retrospective approval — regularisation and indemnity insurance for unconsented work