Bodyshops could soon see their income protected in the event of their accident management company collapsing, thanks to a new agreement being negotiated by the RMI Bodyshop Services Division (BSD) a part of the Retail Motor Industry Federation (RMIF).

To guarantee payment to bodyshops in the event of the collapse of their work provider, the RMI BSD is arranging a memorandum of understanding between repairers and accident management companies and intermediaries.

Many bodyshops source their work through an accident management company. Insurers work with these organisations to place damaged vehicles for repair.

Ray Holloway, director of the RMI BSD, said: “Although this provides a steady stream of work for bodyshops, it also means that there is a third party between the bodyshop, and the customer. The bodyshop relies on this third party for payment, so if the accident management company fails, they may be left unpaid.”

The collapse of accident repair management service (ARMS) in 2005 meant that many bodyshops were unpaid for work they had performed. “We will do all we can to make sure this does not happen again,” said Holloway.

The proposed understanding requires accident management companies and intermediaries to ring fence money paid by mutual clients, thereby safeguarding the repairer's livelihood in the event of the accident management company failing.

For more information on the proposed memorandum email Ray Holloway on: rayholloway@rmif.co.uk