Conveyancing indemnity insurance

Conveyancing indemnity insurance is a type of insurance policy typically used during property transactions in the UK to address legal risks that might otherwise delay or complicate the process. It provides financial protection for the buyer (and often their mortgage lender) against specific potential defects in the property’s title or legal status that cannot be easily resolved.

Common Scenarios Covered:

1. Restrictive covenants: Protects against the risk of a property breaching historical covenants that could result in legal challenges.
2. Lack of building regulations or planning permission: Covers potential penalties or enforcement actions for missing approvals.
3. Right of way or access issues: Provides protection if access to the property is disputed.
4. Missing deeds: Insures against risks arising from missing or incomplete documentation.
5. Chancel repair liability: Covers the potential cost of contributing to church repairs if the property is liable under ancient laws.
6. Absence of easements: Protects against issues such as the lack of formal rights for utilities like drainage or electricity.

How It Works:

• Single premium: A one-time payment is made, usually by the buyer, seller, or sometimes the mortgage lender.
• Validity: Policies often last indefinitely and transfer to future owners, providing ongoing protection.
• No claims requirement: The policy compensates for losses but typically does not involve active resolution of the defect.

Why It’s Used:

• Efficiency: It allows transactions to proceed without the need to resolve the underlying legal issues, which could be time-consuming and costly.
• Reassurance: Provides peace of mind to all parties in the transaction.

Cost:

The cost of conveyancing indemnity insurance depends on the type and scope of cover, the value of the property, and the specific risk being insured. Premiums can range from a few tens to several hundred pounds.

If you're considering this insurance, it’s best to consult your solicitor or conveyancer to understand its necessity and scope in your transaction.