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The latest construction figures released in April 2026 showed a mixed picture for the sector. Total construction output increased by 1.0% in February, but output across the three months to February still fell by 2.0%, marking the fifth consecutive decline in the three-monthly series.*

New work fell by 3.4% over that three-month period, while repair and maintenance was broadly unchanged. Private new housing remained one of the main areas of weakness, falling by 6.5%.*

Against that backdrop, project owners, contractors and specialist installers continue to focus not only on getting work completed, but on what protection remains in place after those works have finished.

For certain specialist construction trades, that is where an Insurance Backed Guarantee can become important.

What an Insurance Backed Guarantee Is Designed to Do

An Insurance Backed Guarantee, commonly referred to as an IBG, is designed to provide a degree of protection behind a contractor's own guarantee.

The contractor remains responsible for its workmanship guarantee in the first instance. The insurance-backed element may respond if the contractor subsequently ceases trading and the policy terms and conditions are satisfied.

This distinction matters. An IBG is not a replacement for the contractor's workmanship obligations and it is not a blanket guarantee against every possible defect.

The actual scope of cover will depend on the insurer, policy wording, type of work, guarantee period and underwriting requirements.

Which Types of Work Can Require an IBG?

Insurance Backed Guarantees are commonly associated with specialist construction works where the employer, property owner, funder, warranty provider or other interested party wants protection that can continue if the original contractor is no longer trading.

Depending on the insurer and scheme, relevant works may include:

• flat and pitched roofing systems;
• waterproofing;
• tanking and below-ground waterproofing;
• glazing systems;
• cladding and façade works;
• solar installations;
• piling or specialist groundworks; and
• other specialist construction packages.

Availability varies between providers, and each application will depend on the work undertaken, the contractor and the proposed guarantee.

Why Roofing and Waterproofing Requirements Are Common

Roofing and waterproofing works are particularly sensitive because defects may not become apparent immediately.

A leak, membrane failure or waterproofing defect can emerge after the contractor has completed the project, sometimes several years later.

For a property owner or project stakeholder, the value of a contractor guarantee is therefore closely linked to the contractor remaining available to honour it.

An Insurance Backed Guarantee may provide an additional layer of protection if the contractor ceases trading during the insured guarantee period, subject to the policy terms.

IBGs Can Also Matter to Lenders and Warranty Providers

An IBG requirement does not always originate with the building owner.

Depending on the project, a lender, funder, structural warranty provider or other third party may request additional protection behind particular elements of the works.

This can be especially relevant where a specialist package sits outside the scope of another warranty or where separate protection is required for a particular trade.

The exact requirement should therefore be checked against the relevant contract, lender condition or warranty documentation rather than assuming that one form of cover automatically satisfies another.

Can an IBG Be Arranged Retrospectively?

In some circumstances, retrospective Insurance Backed Guarantees may be available for works that have already been completed.

This is not automatic and will usually depend on the insurer being satisfied with the contractor, the work, the date of completion and the evidence available.

Providers may request documents such as:

• the contractor's original guarantee;
• invoices or evidence of completion;
• details of the materials or systems used;
• photographs or inspection information; and
• details of any existing defects or claims.

The earlier a retrospective requirement is identified, the easier it is to establish what information may be needed.

The Contractor Still Needs to Meet Underwriting Requirements

Although an IBG relates to completed or specialist works, the insurer will still usually assess the contractor itself.

This can include consideration of trading history, experience, the type of work being guaranteed, claims history, financial position and the contractor's own guarantee wording.

Newer contractors may potentially be considered, but acceptance will depend on the insurer and the overall risk presented.

The same applies to sole traders and smaller businesses: there is no universal rule that automatically includes or excludes a particular business type.

IBGs Are Different From Surety Bonds

It is also important to distinguish Insurance Backed Guarantees from surety products such as Performance Bonds.

A Performance Bond generally supports contractual performance during the course of a contract, whereas an IBG is an insurance product that sits behind an eligible contractor guarantee for completed specialist works.

The two products can therefore appear on the same project while serving very different purposes.

For more information on the distinction, see our Performance Bonds page and our dedicated Insurance Backed Guarantees guidance.

Getting the Requirement Right at the Start

IBG requirements are easiest to deal with when they are identified before the works are completed.

That gives the contractor time to confirm that the proposed guarantee period, scope of works and insurer requirements can be met before a policy is expected to be issued.

Where a requirement is discovered later, retrospective cover may still be possible in some cases, but the availability and evidence required can vary.

For contractors regularly asked to provide IBGs, building the process into project administration from the outset can help avoid delays at completion.