Property Law Online

Conveyancing

Indemnity insurance

A one-off policy covers the loss from a known title defect. We tell you whether you need one, what it must cover and whether your lender will accept it, before anyone tips off the council or the neighbour.

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Legal indemnity insurance covers the financial loss that would follow if a known title defect, a breached covenant, missing consent, absent landlord or undocumented right of way, were ever enforced, without curing the defect itself. Property Law Online identifies when a policy is needed, specifies what it must cover and for how much, and checks that the insurer's wording meets the lender's requirements, across England and Wales. We do not sell or arrange policies: you, or the seller where the seller pays, buy the policy from an insurer or through a broker.

Why instruct us

  • Fee agreed in writing before we start
  • Covering England and Wales

When do you need indemnity insurance?

Indemnity insurance is the pragmatic answer to a defect that would cost more, and take longer, to put right than the risk justifies. It is not always the right answer, and lenders have rules about when it will do. The five situations below are where a policy may be considered.

Missing building regulations or planning consent
Works done without a completion certificate or planning permission, where the council has not been approached. Age helps but it does not settle it. The council can require building work to be pulled down or altered for up to ten years after it was completed, and there is no time limit at all on an application for an injunction to remove or alter offending work (Building Act 1984 section 36, as amended by the Building Safety Act 2022, checked 20 September 2026). Planning enforcement runs on a separate clock: ten years in England for operational development substantially completed on or after 25 April 2024, four years where it was completed before that, and four years in Wales (Town and Country Planning Act 1990 section 171B, checked 20 September 2026).
A breached restrictive covenant
An extension, a conversion or a business use that breaks a covenant on the title, where nobody with the benefit of it has complained. What a restrictive covenant is and how it bites.
An absent landlord
A leasehold flat where the freeholder cannot be traced to collect ground rent, grant consents or produce a management pack. It arises on leasehold purchases.
Lack of easement or right of way
Access, drains or services crossing someone else's land with no documented right, where the use has gone on for years without objection.
Missing or defective documents
A lost lease, a missing deed on unregistered land, a possessory title, or a chancel repair liability the searches could not rule out.
Not right for
A defect that has already been reported, a breach that is ongoing or visible, or a plan to extend or develop the affected area. A policy will not cover a risk you intend to make worse.

What does our indemnity insurance advice cover?

One fixed fee covers identifying the risk, specifying the cover, checking the wording you are offered against your lender's requirements and reporting to you. You buy the policy from an insurer or through a broker, and the premium is paid to them, not to us.

  • Identifying the risk precisely

    A policy pays only for the risk described in it. We define the defect from the title, the searches and the seller's replies, so the description given to the insurer matches what is actually wrong.

  • Checking insurability

    Confirming that nobody has approached the council, the freeholder or the covenant beneficiary, because one enquiry can make the risk uninsurable.

  • Specifying the cover

    What the policy must cover and for how much, who it must protect, including successors in title and the lender, and the conditions that come with it, such as not contacting anyone who could enforce.

  • Checking the wording against the lender

    Checking the lender's requirements in Part 2 of the UK Finance Mortgage Lenders' Handbook, which is the lender-specific part and is where each lender states whether it needs the policy sent to it and what limit of indemnity it requires, then checking the wording you are offered against them, so the policy is one your lender will take (checked 20 September 2026).

  • A written report

    What the policy covers, what it does not, and the conditions you must keep to, in writing, so you know what you are relying on and can pass it on when you sell.

  • Advice on the alternative

    Where curing the defect is realistic, a retrospective consent, a deed of release, an application to the Upper Tribunal through a specialist, we say so, with the timescale, before you buy a policy instead.

Will indemnity insurance work for your defect?

Two questions decide whether a policy is likely to be available and whether a lender will accept it. Answer them and we tell you the route.

Has anyone contacted the council, the freeholder or the person who benefits from the covenant about it?
How old is the problem?

Answer both and we tell you the route, no details needed.

What does indemnity insurance advice cost?

Property Law Online is not yet taking instructions, so there is no fee to quote today. This section explains how the cost of this work is usually made up.

Our advice on an indemnity policy is a fixed fee agreed in writing before work starts. It covers the advice and checking work only. The premium is paid by whoever buys the policy, to the insurer or broker, and is never part of our fee.

Usually covered by the professional fee

  • Review of the title, searches and replies to identify the risk
  • Insurability check
  • A written specification of what the policy must cover and for how much
  • Lender handbook check
  • Check of the wording you are offered against the specification and the lender's requirements
  • Written report on the policy

Paid to others, passed on at cost

  • The premium itself, a one-off sum set by the insurer on the property value and the risk and paid by whoever buys the policy
  • Any fee a broker charges
  • The cost of curing the defect instead, where that is the better route
  • Any fee the lender charges to consider a non-standard policy

What can add to it: a defect that needs a bespoke policy rather than a standard one, a lender with its own requirements to meet, or two or more defects on one title. Each is reflected in the fixed fee agreed in writing before work starts.

How do you get the right indemnity policy?

Five stages. The first question, has anyone already approached the council or the beneficiary, decides whether a policy is available at all, so it is asked before anything else.

  1. Defect identified and dated

    We read the title, the search results and the replies to enquiries, and establish exactly what is wrong and how long it has been that way.

    Day 1

  2. Insurability confirmed

    We check that no approach has been made to anyone who could enforce, and that the breach is not ongoing.

    Day 1

  3. Cover specified and lender checked

    We set out in writing what the policy must cover and for how much, and what the lender's handbook entry requires of it.

    Days 1 to 3

  4. You buy the policy

    You, or the seller where the seller pays, take our specification to a legal indemnity insurer or a broker and obtain the quotation and the policy. We do not choose the insurer or arrange the cover.

    When you are ready

  5. Wording checked and reported

    We check the wording against the specification and the lender's requirements and report to you in writing before completion. The premium is paid to the insurer or broker, and the policy schedule is kept with the deeds.

    Before completion

How long does an indemnity policy take?

Standard policies, missing building regulations, absent landlord, search indemnity, are usually quoted and available within one to two working days of asking an insurer or broker. Bespoke policies for covenant breaches or unusual defects can take a week or more, because the insurer asks questions and may want to see the title and photographs. Having the defect specified first means the quotation you ask for describes the right risk.

What changes the timescale

  • Whether a standard policy fits or a bespoke one is needed
  • Whether the lender requires its own approval of the wording
  • How quickly the seller can confirm that nobody has been approached
  • How quickly you, or the seller, obtain the quotation and the policy
  • Whether the property value pushes the risk into an insurer's referral band

Should I insure the defect or fix it?

Insurance is quicker and cheaper. Curing the defect is permanent. Which is right depends on how likely enforcement is, what you plan to do with the property, and whether the person who could object has already been alerted. The table below is the comparison we run on every instruction.

Where curing is realistic, the routes are a retrospective building regulations application or a regularisation certificate from the council, a deed of release from the person with the benefit of a covenant, an application to the Upper Tribunal under section 84 of the Law of Property Act 1925 to discharge or modify a covenant, or a prescriptive easement claim supported by a statutory declaration. Each takes months rather than days.

Indemnity insuranceCuring the defect
What it doesPays your loss if the defect is enforcedRemoves the defect from the title or regularises the works
TimescaleDaysMonths, sometimes longer
CostOne-off premium, set on value and riskApplication fees, professional fees, possibly works
Alerts the council or beneficiaryMust notDoes, by design
Covers future ownersYes, successors in title and lendersYes, permanently
Right whereOld defect, nobody has complained, no plans to extendRecent breach, enforcement started, or you plan to develop

Who pays for indemnity insurance, buyer or seller?

Conventionally the seller, because the defect is on their title and they are the one who cannot produce the document. In practice it is negotiated, and on a competitive sale a buyer will often meet it to keep the transaction moving. Where a seller already holds a policy from their own purchase, it should be passed on with the deeds; a valid existing policy covers successors, and its absence means paying for a second one.

On a leasehold flat with an absent landlord, the policy is typically bought by the buyer because it is the lender's requirement that drives it. Whoever pays, the policy is bought from an insurer or through a broker, and we check that it covers what the lender needs. The common policy types are set out one by one on this page.

What goes wrong with indemnity insurance?

  • Somebody already asked the council

    Insurers will not cover a risk that has been drawn to the attention of the person who could enforce it. A helpful email from the buyer, the agent or a surveyor to the planning department destroys insurability. Decide the route first; make enquiries, if at all, afterwards.

  • The wording does not match the defect

    A policy for "missing building regulations consent for a loft conversion" pays nothing if the problem is the rear extension. We define the defect from the documents and check that the schedule describes what is actually wrong.

  • Assuming it fixes the problem

    A policy covers financial loss if enforcement happens. The covenant, the missing consent and the absent freeholder are all still there, and a future buyer's representative will still raise them. Keep the policy with the deeds so you can pass it on.

  • The lender will not take it

    Some lenders will not accept a policy for particular risks, or require the defect cured. Where the handbook gives the lender its own say, that is set out in Part 2, and we check it before a policy is bought rather than after. Lenders differ and their entries change, so it is the entry on your file that decides it rather than any general rule (checked 20 September 2026).

Frequently asked questions

Can I buy indemnity insurance myself?

Yes. You, or the seller where the seller pays, buy the policy from a legal indemnity insurer or through a broker; we do not sell or arrange policies. What we do is tell you what the policy must cover and for how much, and check the wording you are offered against your lender's requirements. Where another firm is handling your purchase, we can still identify the risk and specify the cover.

What documents do you need to advise on a policy?

The title register and plan, the search results, the seller's replies to enquiries and, for building works, any plans or photographs showing what was done and when. For a covenant, the deed containing it. We list exactly what is needed once we know the defect.

How long does the cover last?

In perpetuity. A single premium covers you, every future owner and any lender with a charge on the property, with no renewal and no further payment. The policy schedule should be kept with the deeds and handed to the buyer's representative when you sell, because without it the buyer pays for a second policy.

Does the policy cover the cost of putting the works right?

No. It covers financial loss, legal costs and any reduction in the property's value if enforcement happens. It does not pay for the works themselves unless a court or the council orders them removed and the policy responds to that loss.

Can I get a policy after I have completed?

Sometimes. Insurers are more cautious once you own and occupy the property, and the premium is usually higher than it would have been at purchase. Some risks become uninsurable altogether, particularly if you have raised them with the council, the freeholder or a neighbour in the meantime. Ask before you write to anyone.

What if the seller refuses to pay the premium?

Then the buyer decides whether to meet it, walk away, or renegotiate the price to reflect it. Premiums are usually small relative to the purchase price, so a buyer may prefer to pay rather than delay exchange. The insurer's quotation gives you the figure before you decide either way.

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Written by the Property Law Online team

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