Deposit protection and insurance-backed guarantees
Both consumer codes require members to insure deposits and workmanship warranties. What neither prescribes is a uniform level of cover — so the protection you actually have depends on which insurer your installer uses, and the range is wide enough to matter.
Both codes require protection. Neither sets the level.
RECC states that all members “must insure any deposits and further advance (or ‘stage’) payments they take, together with the workmanship warranties they issue”. HIES provides deposit and stage payment protection alongside an insurance-backed guarantee.
But the actual cover comes from an insurer, and RECC’s own guidance is that terms vary significantly — deposit protection somewhere around 35 to 120+ days, workmanship warranty cover around 2 to 12 years.
So the question is not “am I protected?” It is “by whom, for how long, and for how much?”
Two different protections
They are routinely conflated and they cover different risks at different times.
Deposit and stage payment protection covers the money you have paid before the work is finished. The risk is that the installer takes your deposit and fails, or disappears, before delivering. It is a short-term protection measured in days.
Insurance-backed guarantee covers the workmanship warranty after completion, if the installer ceases to trade. The risk is that a defect appears in year four and the company that promised to fix it no longer exists. It is a long-term protection measured in years.
An installer can have one and not the other. Ask about both by name.
Why the level varies, and why that matters
Neither code prescribes uniform cover. What they require is that members insure; the terms come from whichever provider the installer uses.
RECC’s guidance is direct about this — it tells consumers that protection terms differ significantly by provider and that they should identify their installer’s insurer and read that provider’s policy.
A guarantee cannot outlast the warranty it backs, and it is worthless beyond its own term.
A “10-year workmanship warranty” backed by a policy running 2 years gives you two years of real protection and eight years of a promise from a company that may not be there.
The two numbers are printed on different documents, which is precisely why nobody compares them. Compare them.
What an IBG does not cover
Worth knowing before you rely on it.
Not the panels or the inverter. Those are manufacturer warranties, given by other companies, and they survive the installer’s failure anyway.
Not while the installer still trades. An IBG generally responds when the installer has ceased trading. If they are still going, your claim is against them, and the insurer will say so.
Not design or performance. A system that underperforms because it was badly specified is a misrepresentation or breach of contract question — see section 75 — rather than a workmanship defect.
Not beyond the policy limits. Cover is capped, and the cap may be below the cost of a significant remedial job.
Not if the policy was never issued. Which is the most common failure of all.
Check you actually have one
This is the single most useful thing on this page.
Look for the policy document, not the promise. An IBG is a policy issued by an insurer, with a policy number and a named insurer. “Insurance-backed guarantee included” on a quote is a sales line until the certificate arrives.
Check the timing. IBGs are typically issued at or after handover. If your installation completed and no policy arrived, chase it while the company still exists — this is a document that becomes impossible to obtain at exactly the moment you need it.
Check the named insured and the address. Errors here are common and they matter.
Check the term, and compare it against the workmanship warranty term.
Check what triggers it. Usually the installer ceasing to trade. Read the definition.
Keep it with your deeds, along with the MCS certificate, the building regulations certificate and the DNO notification — see selling a house with solar panels.
How this fits with your other protections
| Risk | What responds |
|---|---|
| Installer takes deposit, fails before installing | Deposit protection; section 75; chargeback |
| Installer misrepresented the savings | Section 75; claim against installer |
| Workmanship defect, installer still trading | The installer’s warranty |
| Workmanship defect, installer gone | Insurance-backed guarantee |
| Panel or inverter fault | Manufacturer warranty |
| Work never notified under building regulations | Regularisation or indemnity — see building regulations |
Section 75 is the one that overlaps most usefully, because it is a statutory liability of a bank rather than an insurance policy with conditions, and it does not depend on the installer’s status. Paying part of the deposit by credit card costs nothing and sits alongside everything above rather than replacing it.
Questions to ask before you pay a deposit
- Which consumer code are you a member of? RECC, HIES, or neither.
- Who insures the deposit, and for how many days?
- Is an insurance-backed guarantee included, from which insurer, and for how long?
- How long is your workmanship warranty? Compare with the answer to 3.
- When will I receive the policy documents?
- What proportion of the price is payable up front, and when are the stage payments?
A straightforward installer answers all six without hesitation, because for a code member these are simply facts about their business. Hesitation on question 3 or 4 is the one to pay attention to.
Sources
- About deposit and workmanship warranty protection
- HIES Quality Assured Contractors Scheme
- Consumer Credit Act 1974, section 75
Contains public sector information licensed under the Open Government Licence v3.0.
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