What Is Indemnity Insurance And When Could I Need It?
In his latest Timms blog, Trainee Solicitor Connor Ball-Wood discusses “What Is Indemnity Insurance And When Could I Need It?”
Indemnity insurance is cover that is used in conveyancing transactions to protect the buyer and any future buyer against any legal defects with the property that cannot be resolved quickly or at all. By taking out the policy, the buyer protects themselves and their mortgage lender against any future claims that may cause loss to the value of the property.
It is important to note that indemnity cover does not fix the defect or cover the cost to repair something but it covers costs in the event of a third-party claim. If there are concerns with the quality of building work or installation, we would advise further surveys to assess the structural integrity of the work.
Do I Need Indemnity Insurance?
If you’re trying to buy a house and problems with the title or past building work crop up during conveyancing, this type of insurance can sometimes help the sale go through.
It’s often used to insure against problems that will cause the mortgage lender to refuse to release funds, despite seeming like insignificant issues to both the buyer and the seller.
How Much Does It Cost?
There is no set price for an indemnity policy as this depends on the reason for taking out the policy. However, it usually ranges from £50 up to £600.
The seller will usually bear this cost in order to rescue the sale of the property but may sometimes be negotiated.
Is The Policy Transferable?
Indemnity insurance is tied down to the property, not the individual who took out the policy. Therefore, if you were to ever sell the property, the policy would be passed on to protect any future buyers.
Frequently Used Indemnity Policies
- Planning permission indemnity insurance
- Restrictive covenant indemnity insurance
- Indemnity insurance for a boiler
- Indemnity insurance for windows
- Absence of easement
- Chancel repair
- Insolvency act
If you have any further questions in relation to this blog or any other Conveyancing issues, please don’t hesitate to contact me on 01283 561531 or via email at c.ball-wood@timms-solicitors.com. Alternatively, you can visit the Conveyancing section of our website here.
February 2022