Every electrical installation deteriorates both with use and over time, so it is important that every installation is periodically inspected and tested by a competent person to ensure that the safety of persons using the installation is not put at risk. The results of the test and inspection are clearly detailed in a report together with a list of "observations" which are items noted during the test that identify any damage, defects, deterioration or dangerous conditions within the installation.

For ease of understanding, these observations are currently coded with a number from 1 to 4. With the forthcoming EICR, this numbering system is to replaced by codes C1 to C3. These codes relate to a set of clear guidance notes given to the recipient of the report allowing them to accurately assess the condition of their electrical installation and to make a decision about any remedial works required.

Whilst there is no direct or specific law requiring testing and inspection of electrical installations to be carried out, there are various duties imposed upon employers, landlords and persons responsible for premises which require them to provide a safe place of work.