Prepayment Insurance and Insurance Backed Guarantee’s (IBG’s) provide useful protection for consumers.
An example of prepayment insurance:
- A consumer pays a deposit for a product which will be delivered in two months’ time. If the supplier goes into liquidation one month after payment of the deposit, the consumer could then lodge a claim under the prepayment insurance.
An example of an IBG:
- After completing a contract a window installer gives the consumer a ten year guarantee/warranty. If a fault occurs six months later and the consumer attempts to contact the window installer but they have gone into liquidation, the consumer could then lodge a claim under the IBG.
These products are sold through schemes and industry associations.