Legal Indemnity Insurance in Conveyancing: The Complete UK Guide

At a glance

• What it is: a single-premium insurance policy covering one defined title risk on a property — not a renewing annual policy, and not a fix for the underlying legal defect.
• Common triggers: missing planning permission or building regulations sign-off, untraceable restrictive covenant beneficiaries, undocumented easements (rights of way, drainage), chancel repair liability, and gaps in the chain of title.
• Who usually pays: convention favours the seller (the defect predates the buyer), but this is negotiable and often decided between the two conveyancers.
• Lender acceptance: most mainstream lenders accept a compliant policy checked against the UK Finance Mortgage Lenders' Handbook, provided the lender and successors in title are named as insured parties and the sum insured includes an escalator clause.
• Tax: premiums carry Insurance Premium Tax at the standard rate published by HMRC (12% at the time of writing) — always check the current rate on GOV.UK rather than assuming a fixed figure.
• Key risk if handled badly: approaching the person who might bring a claim, or applying for retrospective consent, without checking the policy wording first — many policies treat this as a breach of condition that can void cover.
• Legal basis for the underlying defects: covenants and their possible discharge sit under section 84 of the Law of Property Act 1925 (Upper Tribunal, Lands Chamber); many disputed easements trace back to section 62 of the same Act; chancel repair liability derives from the Chancel Repairs Act 1932; register errors are governed by the statutory indemnity scheme in the Land Registration Act 2002.

What is legal indemnity insurance?

Legal indemnity insurance — also called title indemnity insurance — is a single-premium policy that covers one specific, known risk affecting a property's title. Unlike buildings or contents insurance, which you renew every year, a legal indemnity policy is paid for once and then typically runs in perpetuity, passing automatically to future owners and their lenders without any need to re-apply.

The policy does not fix the underlying issue. If a property has a missing consent or a breach of an old covenant, that problem stays on the title indefinitely. What the insurance does is compensate the policyholder if someone later brings a successful claim or takes enforcement action connected to the insured risk — for example legal costs, a fall in the property's market value, or the cost of remedial works ordered to resolve the dispute.

HM Land Registry's Practice guide 39: rectification and indemnity explains the Registry's own statutory indemnity scheme, which is a separate (and narrower) mechanism under the Land Registration Act 2002 for compensating someone who suffers loss because of a mistake in the register itself. Private legal indemnity insurance, the subject of this guide, is a different and much more commonly used product, arranged commercially through specialist insurers rather than through the state. It is important not to confuse the two — a private indemnity policy does not involve HM Land Registry at all, and HM Land Registry does not underwrite, approve, or endorse private indemnity products.

Each policy is written for one defined risk, so read the wording carefully rather than assuming it covers every aspect of the title. A policy taken out for a missing building regulations certificate, for instance, will not respond to an unrelated boundary dispute.

Why the issue arises in the first place: the searches and enquiries stage

Indemnity insurance almost always surfaces during the standard investigation of title that happens between offer acceptance and exchange of contracts. Your conveyancer reviews the title register, raises enquiries with the seller, and carries out searches — including a local land charges search, which reveals planning history, enforcement notices, and other charges registered against the property. GOV.UK's local land charges search service is the standard route for checking whether a local authority holds any relevant entry.

If a search or enquiry reveals a gap — no record of planning permission for an extension, no completion certificate for internal works, an old covenant restricting use of the land with no clear surviving beneficiary, or an easement that appears to have been used for years but was never formally granted — your conveyancer has to decide how to deal with it. The options are usually: (1) resolve it directly, for example applying for retrospective consent, which can be slow and is not guaranteed to succeed; (2) obtain a formal release or deed of variation from whoever holds the benefit of the right; or (3) insure against the risk of it ever being enforced. Indemnity insurance is generally the fastest and cheapest of the three, which is why it is used so often — but "fastest" is not the same as "best" for every situation, and your conveyancer should explain why insurance rather than resolution is being proposed for your specific defect.

Common risks covered by indemnity insurance

Missing planning permission or building regulations consent

Where an extension, loft conversion, or other alteration appears to lack planning permission or a building regulations completion certificate, and the work is old enough that enforcement action is now time-barred or unlikely, an indemnity policy can cover the cost of enforcement action or a reduction in value if the local authority ever takes issue with it. This is one of the most frequently used forms of indemnity policy in residential conveyancing, precisely because tracing decades-old paperwork or applying for retrospective consent can take far longer than a straightforward purchase timetable allows.

Restrictive covenants

A restrictive covenant limits what an owner can do with land — for example prohibiting further building, commercial use, or keeping animals. Where the beneficiary of an old covenant cannot be traced, or the covenant appears outdated but has not been formally removed, insurance can protect against a successful claim for breach. The statutory route to remove or vary a covenant is an application to the Upper Tribunal (Lands Chamber) under section 84 of the Law of Property Act 1925, using Form T379 and GOV.UK's accompanying guidance. This is often slower and more expensive than a policy — which is one reason insurance is usually the pragmatic choice for older, low-risk covenants where nobody can realistically be identified to object. Note that the Tribunal's power under section 84 only extends to restrictive (negative) covenants; it cannot discharge or modify a positive covenant (one requiring the landowner to do something, such as maintain a shared fence) or an easement.

Undocumented or disputed easements

Rights of way, shared drainage, and access rights sometimes exist by long use rather than by a formally drafted deed. Many such rights trace back to the "general words" provision in section 62 of the Law of Property Act 1925, which can convert an informal permission or privilege enjoyed at the time of a conveyance into a full legal easement in certain circumstances. A related common-law route is the rule in Wheeldon v Burrows (1879), which can imply an easement in favour of land sold off in parts where the right was continuous, apparent, and necessary for reasonable use of that part. Whether either route has actually operated in a given case is often unclear without specialist advice on the specific chain of title. Where the position cannot be resolved with certainty before completion, an indemnity policy can cover the risk that the right turns out not to exist, or that a neighbour disputes it.

Chancel repair liability

A small number of properties near medieval parish churches carry a historic liability, under the Chancel Repairs Act 1932, to contribute to the cost of repairing the chancel of the parish church. Since the Land Registration Act 2002 came into force, this liability generally only binds a new owner if it is protected by a notice on the register or otherwise falls within a transitional period recognised by the 2002 Act's implementing provisions — but establishing that with certainty for a specific property is not always straightforward. Where the risk cannot be ruled out by a search, an indemnity policy is the standard solution. See our dedicated guide on chancel repair liability for how this liability arises and how it is checked.

Gaps in the chain of title

Where documents proving unbroken ownership are missing — often for older properties, or where earlier conveyances were lost or never properly registered — a policy can cover the risk of a third party later asserting a competing claim to ownership.

How the process works in practice

1. Identify the defect or risk. Your conveyancer reviews the title, the searches, and the seller's replies to enquiries. If something cannot be resolved quickly — a missing consent, an unknown covenant beneficiary, an undocumented easement — they will flag it and explain why an indemnity policy is being suggested rather than a full legal remedy.
2. Decide who pays for the policy. Convention favours the seller, since the issue existed before the buyer's involvement, but this is a negotiating point handled between the two conveyancers. In a competitive market a buyer may agree to cover it to keep the purchase moving.
3. Obtain a quote from a specialist insurer. Conveyancers typically use a small panel of legal indemnity providers and request a quote based on the property value, the loan amount, and the specific risk described. The premium is a one-off figure, though it varies considerably with the nature and scale of the risk — always ask for the figure in writing rather than relying on a verbal estimate, and check whether Insurance Premium Tax is included in the quote.
4. Check the policy wording carefully before it is bound. Read the schedule and the exclusions. Confirm what is insured, who the insured parties are, whether future owners and lenders are covered, the level of cover against future value increases, and any conditions that could void cover — most importantly, any restriction on contacting the party who might bring a claim.
5. Confirm the policy meets your lender's requirements. Where you have a mortgage, your conveyancer checks the wording against your specific lender's instructions, using the UK Finance Mortgage Lenders' Handbook as the standard reference, before completion can proceed.
6. Keep the policy safe after completion. Store the policy document and schedule with your other property paperwork. If you later sell, remortgage, or extend the property, you may need to produce it. Avoid doing anything that could trigger the very risk the policy was meant to sidestep, since this can invalidate cover.

What indemnity insurance does not do

It is worth being explicit about the limits of these policies, because the framing "we'll just get insurance" can make a defect sound more resolved than it is:

• It does not remove the defect from the title. A future buyer's conveyancer will usually still see the same issue and ask the same questions — the existence of a policy is the answer, not the absence of the problem.
• It does not cover you if you cause the risk to crystallise — for example by approaching the covenant beneficiary yourself, or by carrying out further unauthorised works.
• It typically will not respond to a claim if the description of the risk given to the insurer when the policy was arranged was inaccurate or incomplete.
• It is not a substitute for resolving a defect where a lender, buyer, or your own circumstances require the underlying issue to be formally fixed rather than insured against.
• It is not a general-purpose property insurance product — it does not replace buildings or contents insurance, and it does not cover unrelated risks that were not disclosed when the policy was arranged.

A note on how these policies are arranged

Arranging insurance is itself a regulated activity. The Solicitors Regulation Authority's guidance for firms carrying on insurance distribution activities confirms that where a solicitor's firm arranges legal indemnity cover for a client, this is treated as an insurance distribution activity, and the firm must comply with conduct rules including disclosing to the client the nature of any remuneration it receives for arranging the policy and confirming the insurer or insurers it is placing the risk with. If you are unclear on how your conveyancer is remunerated for arranging a policy, you are entitled to ask before you agree to proceed.

Frequently asked practical questions to raise with your conveyancer

Before agreeing to an indemnity policy, it is reasonable to ask your conveyancer:

• Exactly what risk is being insured against, in plain language — not just the policy's technical name.
• Whether resolving the defect directly (for example applying for retrospective planning permission, or tracing a covenant beneficiary) was considered, and why insurance was preferred.
• Who the insured parties are, and whether the policy will automatically benefit anyone you sell to in future.
• Whether the sum insured is fixed or includes an escalator clause that keeps pace with the property's value.
• What specifically would void the cover — in particular, whether contacting any third party connected to the risk is prohibited.
• Whether the premium quoted includes Insurance Premium Tax, and what the total cost will be.
• Whether your specific mortgage lender's instructions have already been checked against the policy wording, or whether that step is still outstanding.

This guide is general information, not legal advice

This guide provides general information about how legal indemnity insurance works in conveyancing transactions in England and Wales. It is not legal advice and is not a substitute for advice tailored to your specific circumstances, property, and proposed policy wording. The law and guidance described were accurate as at July 2026 and are subject to change — always check GOV.UK and legislation.gov.uk for the current position, and read the specific policy schedule offered to you rather than relying on general descriptions of what "indemnity insurance" typically covers.

Last reviewed: July 2026 by a non-practising solicitor · Next review due: July 2027 or on legislative change.