What Is Indemnity Insurance?

Title indemnity insurance, also known as legal indemnity insurance, can cover you if for some reason you or your bank have lost the original title deeds for the sale of your house. It can protect you against inaccurate or incomplete Land Registry documents and title indemnity insurance can help speed things up if the conveyancing process is being held up by legal or planning permission problems.

Professional indemnity insurance is a type of business insurance taken out by professionals to cover them they make a mistake in their work that could lead to financial loss. This isn’t relevant to a buyer or seller but should be noted to avoid when you’re comparing quotes for indemnity insurance.

Ensuring all planning and building regulations are obtained will be included in your solicitor fees for buying a house. In the unlikely case that the previous owner of the property had building work done without planning permission - or the work was done some time ago with no record of consent being kept, your insurance will protect you from any legal action. With indemnity insurance you can be covered against any local authority enforcement if you’re missing building regulation certificates too.

For peace of mind, it’s recommended to get a property survey to highlight any dangerous building or structural work before you commit to buying the house. By comparing surveying quotes, you’ll save money on your house survey.

Restrictive covenants are restrictions to a property made by the previous owner or developers and are written into the deeds. The most common restrictive covenant is preventing the owner from making alterations to the property by adding an outbuilding or extension. Other restrictive covenants include prohibiting owners from keeping livestock on the land, letting out the property, or selling for use as a second or holiday home.

When you exchange contracts and become the legal owner of the property, you’re agreeing to these restrictive covenants. The issue is that many people aren’t aware of these as they are sometimes not even listed in your title deeds, or if they are they are in small print. Your indemnity insurance policy can cover potential issues that occur with restrictive covenants and the previous owner.

If you are selling or buying a house, you should have an installation certificate or gas safety certificate. If you’re selling your house and you don’t have either, then an indemnity policy will cover this, giving the buyer reassurance.

For buyers, it should be noted that indemnity insurance for a boiler will not cover repair costs so you should chase up a gas safety certificate.

It’s legal a requirement in England and Wales to have a FENSA certificate provided if you’ve had new windows installed since 2002. Most people will take out an indemnity policy if you’re missing a certificate, which can help when it comes to selling your house.

If for any reason your local authority took action against your misplaced FENSA certificate, your indemnity policy will help to protect you against any of these claims or losses.

If the property you’re buying is near a church, you might have to contribute to cover any repair costs the church may need. This is a little-known but potentially expensive eccentricity, dating back many centuries. In this case, your indemnity policy will cover the cost for these repairs. Your conveyancer will inform you if you’re liable to pay chancel repairs once they have carried out their conveyancing searches.

If you need to access the property via land that hasn’t been granted a right of easement, you will need to take out the insurance. Right of easement will give you the right to use the land on your property. Your indemnity policy will mean that you’ll be covered in the case of paying to establish the easement to the property.

If you’re buying a house using a gifted deposit, you will need to have indemnity insurance to continue with the transaction. It will cover you in the unlikely event of the gifted deposit owner going bankrupt.