Howard Collins, Director of Cobra Insurance Brokers, based in Canvey Island, Essex, explains how Insurance Backed Guarantees (IBGs) are becoming increasingly popular in the industrial flooring sector.
Cobra Insurance Brokers, part of the Cobra Group which was formed in 2006 through the amalgamation of six companies, is the UKs leading provider of IBGs for industrial flooring. As the appointed insurance broker for FeRFA, the Resin Flooring Association, Cobra is able to provide an unrivalled guarantee service to industrial flooring contractors.
Howard describes how the service operates: A potential customer who requires and guarantee on the installation of an industrial floor usually states this in their negotiations with a contractor, who will then pass these requirements to us.
We are quite fastidious about who we provide IBGs for, but if a contractor is a FeRFA member, this ensures a level of service we can rely on.
Howard continues: In order to qualify for an IBG the floor installation has to be carried out to a high standard. Our surveyors ensure the contractor is installing flooring systems in accordance with the manufacturers guidelines and instructions. We also ensure installation staff are working to a high quality standard.
If the installation meets this criteria, then we can issue an IBG. In all circumstances, the end client - the person who is going to own or occupy the building - gets the benefit of the policy, but its the contractor who puts it in place.
Policies, which can be issued for periods from two to 10 years, cover the cost of repairs and indemnity against failures. The reasons for clients insisting on an IBG are varied. Howard adds: Customers use a whole array of reasons for taking out cover, but ultimately its about protecting your investment.
Were seeing a lot of demand for this type of cover at the moment. Its becoming more and more requested, because customers want to know that if the contractor goes out of business there is a policy to pick up the repair bill.
We have noticed a trend for authorities and councils to insist on an IBG for flooring installations.
On cost, Howard says: The cost of an IBG is dependent on the size of the project. A general price for an IBG is around 4.5% of the projects value, and the cost doesnt vary much for IBGs of between two and 10-years.
Howard continues: The size of the project doesnt seem to dictate whether a client insists upon an IBG. We have issued cover for installations with a value from £5,000 - £6,000 to projects worth around £500,000.
Cobra counts Kemtile as a major contributor to the success of the service. Howard states: We have a long track record with Kemtile, probably 3-4 years, and they have proved to be an excellent client.
Cobras relationship with Kemtile started with a major ongoing project for an aerospace manufacturer for which we have provided guarantees on installations. In fact, were about to issue our ninth guarantee on the work there.
Cobras ability to issue IBGs is dependant on the quality of the products used by installers. Howard explains: Kemtile often specifies UCRETE, which we recognise as a high quality product, and for which we have no issue in providing this cover.
Asked if the demand for IBGs is strong, Howard replies: Demand is definitely increasing. There are only two or three companies who are able to offer this cover, and Cobra is regarded as the market leader because of our contacts with FeRFA.
For an industrial flooring installation company, the ability to offer an IBG is a major selling point due to the rigorous standards demanded by the insurer. Howard concludes: If the quality of workmanship and products isnt there then we cannot provide an IBG, so in many ways an IBG is a stamp of quality.
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