Indemnity Insurance UK: Conveyancing Guide (2026)
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When you buy a home in England or Wales, your conveyancer may discover something about the property that creates a small but real risk: a missing document, an old planning permission that was never signed off, or a right of way that was never properly recorded. Rather than delay the sale while everyone tries to fix the paperwork, the usual workaround is a one-off insurance policy known as indemnity insurance.
It is a quiet but common part of many transactions, and most buyers only hear about it when their solicitor mentions it a few weeks before completion. This guide walks through what these policies actually do, when they tend to appear, what they cost in broad terms, and the traps to watch for.
The aim is to help you understand what is being proposed so you can make a sensible decision rather than just nodding along.
Overview
Indemnity insurance, sometimes called legal indemnity or title indemnity insurance, is a single-premium policy that covers a specific, known risk affecting a property. Unlike buildings insurance or home insurance, which you renew each year, a legal indemnity policy is paid for once and then sits quietly in the background for the life of the policy, which often runs in perpetuity and passes to future owners and their lenders.
The policy does not fix the underlying issue. If a property has a missing document or a breach of an old covenant, that problem stays on the title. What the insurance does is compensate the policyholder if someone later brings a successful claim or takes enforcement action tied to the insured risk.
That might include legal costs, a drop in the market value of the property, or the cost of works required to settle the dispute. Each policy is written for one defined risk, so it is important to read the wording rather than assume it covers every aspect of the title.
Key steps
- Identify the defect or risk. Your conveyancer reviews the title, searches, and the seller's replies to enquiries. If they spot something that cannot be resolved easily, such as a missing consent or an unknown covenant beneficiary, they will flag it and explain why an indemnity policy is being considered rather than a full legal remedy.
- Decide who pays for the policy. In many transactions the seller is asked to pay, because the issue existed before you came along. This is a point of negotiation and is often handled between the two conveyancers. If the seller refuses, the buyer sometimes agrees to cover it to keep the purchase moving, particularly in a competitive market.
- Obtain a quote from a specialist insurer. Conveyancers typically use a small panel of legal indemnity providers and will request a quote based on the property value, the loan amount, and the specific risk. The premium is a one-off figure and is usually modest relative to the overall cost of buying a home, though it varies widely with the risk.
- Check the policy wording carefully. Before the policy is bound, read the schedule and the exclusions. Look at what is insured, who the insured parties are, whether future owners and lenders are covered, and any conditions that could void cover, such as contacting the party who might bring a claim. Your conveyancer should explain anything unclear.
- Keep the policy safe after completion. Store the policy document with your other property paperwork. If you later sell, remortgage, or extend the property, you may need to hand it over or refer to it. Avoid doing anything that could trigger the risk the policy was meant to sidestep, because this can invalidate cover.
If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £89.
Common questions
Q When is indemnity insurance typically used in a house purchase?
It tends to come up where a small title issue cannot be tidied up quickly, such as a missing planning certificate, an unknown restrictive covenant, a lack of building regulations sign-off on older works, a missing easement for access or drainage, or a break in the chain of ownership. The policy lets the deal complete without waiting months to contact third parties or the local authority.
Q Does indemnity insurance actually fix the problem with the property?
No. The legal issue remains on the title and is passed to whoever owns the property next. The policy only pays out in defined circumstances, usually if someone with a right to enforce the matter steps forward and causes financial loss. Think of it as financial protection against a specific scenario rather than a cure for the defect itself.
Q How much does a legal indemnity policy usually cost?
Premiums vary a lot depending on the type of risk, the property's value, and the mortgage amount. Simple policies for minor covenant breaches can be modest, while cover for more substantial planning or access issues costs more. Your conveyancer should obtain a quote before you commit, and the figure will be confirmed in writing on the policy schedule.
Q Who normally pays for the indemnity policy, buyer or seller?
Convention is that the seller pays, because the issue predates the buyer's involvement. In practice this is negotiable and depends on the market and the parties. If the seller will not pay, a buyer who still wants the property may agree to cover the premium. The point is usually settled through correspondence between the two conveyancers.
Q Can I arrange indemnity insurance myself without a conveyancer?
In theory yes, but in practice the policies are usually placed through a conveyancer, who has access to specialist insurer panels and can describe the risk accurately. If the description of the risk is wrong or incomplete, the policy may not respond when you need it. Using your conveyancer reduces the chance of that happening.
Q Will my mortgage lender accept an indemnity policy?
Most lenders will, provided the policy meets their requirements set out in the UK Finance Mortgage Lenders' Handbook. Lenders often want to be named as an insured party, want the sum insured to reflect the loan, and expect the cover to bind future owners. Your conveyancer checks the policy wording against the lender's specific requirements before completion.
Q Can I take action to resolve the defect after the policy is in place?
Be very careful. Many policies contain a condition that the insured must not approach the person who might bring a claim, because doing so can alert them to the issue and trigger the very problem the policy was meant to insure against. If you want to regularise matters later, take guidance first, otherwise you risk voiding cover.
If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £89.
Sources
This guide is based on primary UK law and official guidance.
- Guidance · UK GovHM Land Registry – Practice guidesgov.uk
- Guidance · UK GovHM Land Registry – How to buy a homegov.uk
Legal helpline
Unsure whether indemnity insurance is right for your purchase?
Indemnity policies sound routine, but the wording, the sum insured, and the exclusions vary a lot between providers and risks. An experienced legal adviser can talk through what the proposed policy appears to cover, what it does not, and the practical points to raise with your conveyancer, based on what you describe on the call.
- A clear explanation of how indemnity policies work in conveyancing
- Practical perspective on the specific risk you have been told about
- Plain-English answers to your specific questions about the policy wording
- Points to consider raising with your conveyancer before completion
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.