Indemnity Insurance in Conveyancing: When Needed and Who Pays?

During any property sale in England or Wales, the buyer's solicitor will carry out due diligence on the property — reviewing the title, examining property search results, and raising conveyancing enquiries with your solicitor. If this process reveals a legal defect or a gap in the property's compliance history, the buyer's solicitor will want it resolved before exchange of contracts.

In many cases, the simplest and most cost-effective solution is an indemnity insurance policy. Rather than spending weeks (or months) obtaining retrospective planning permission, chasing down a missing certificate, or applying to have a restrictive covenant removed, your solicitor arranges a one-off insurance policy that protects everyone involved against the risk of the defect causing a future financial loss.

This guide explains what indemnity insurance covers, when your solicitor is likely to recommend it, how much it costs, and who is expected to pay — with a focus on what it means for you as a seller.

What is indemnity insurance in conveyancing?

Indemnity insurance in conveyancing is a one-off insurance policy that provides financial protection against a specific legal defect or risk associated with a property. The policy compensates the insured party (usually the buyer and their mortgage lender) if the defect leads to a financial loss in the future — for example, if a local authority takes enforcement action over unauthorised building work, or if a third party enforces a restrictive covenant.

The policy does not fix the underlying defect. It does not mean the problem goes away. What it does is transfer the financial risk from the buyer (and their lender) to the insurance company. If the worst happens, the insurer pays out rather than the property owner bearing the loss.

Unlike ongoing insurance products such as buildings insurance, conveyancing indemnity policies are purchased once with a single premium. There are no annual renewals. The policy typically remains in force for the duration of ownership and passes automatically to future owners of the property, providing indefinite protection as long as the policy terms are not breached.

When will your solicitor recommend indemnity insurance?

Your solicitor will recommend indemnity insurance when they identify a legal issue with your property that cannot reasonably be resolved before exchange of contracts. The test is usually pragmatic: if fixing the problem would cost more, take too long, or carry uncertainty about the outcome, insurance is the proportionate response.

The most common scenarios where indemnity insurance is recommended include:

• Missing building regulations completion certificate. If building work was carried out (an extension, loft conversion, or structural alteration) without a final completion certificate from building control, the buyer's solicitor will flag this as a risk. Applying retrospectively for a regularisation certificate can take months and may require opening up completed work for inspection. An indemnity policy covers the risk of enforcement action instead.
• Absent or unclear planning permission. If alterations were made to the property without clear evidence of planning permission, an indemnity policy can cover the risk that the local authority could require the work to be reversed. This is particularly common for older extensions, conservatories, or changes of use where the paperwork has been lost over time. Being upfront about this in your seller disclosure is important.
• Breach of a restrictive covenant. The property's title may contain covenants restricting certain activities — for example, a covenant not to build on part of the land, or not to use the property for business purposes. If a previous owner breached a covenant (or you have), an indemnity policy covers the risk that the beneficiary of the covenant could take legal action.
• Chancel repair liability. Some properties in England and Wales are liable for contributions to the repair of a medieval parish church. A chancel repair indemnity policy, which typically costs £15 to £25, is one of the most common types of conveyancing indemnity insurance.
• Missing guarantees or warranties. If structural work, damp-proofing, or timber treatment was carried out but the original guarantee has been lost, an indemnity policy can cover the buyer against the cost of remedial work if the treatment fails.
• Lack of an easement for access or services. If the property relies on a right of way or service pipes that cross neighbouring land, but this right is not formally documented in the title, an indemnity policy covers the risk that the neighbour could challenge the right.
• Defective lease provisions. In leasehold sales, if the lease contains problematic clauses (such as a ground rent that could be classified as an assured shorthold tenancy), an indemnity policy may be recommended to protect the buyer and their lender.

Common indemnity insurance scenarios, typical costs, and who pays

The following table sets out the most frequently encountered situations where indemnity insurance is used in residential sales, along with typical policy costs and the usual expectation around who pays. All figures are indicative for 2026.

For a detailed breakdown of all the costs you may encounter when selling, see our conveyancing costs breakdown.

Who pays for indemnity insurance: buyer or seller?

The general rule in England and Wales is straightforward: the party responsible for the defect pays for the indemnity policy. In practice, this usually means the seller.

The reasoning is simple. If your property has a missing building control certificate, an undocumented extension, or a breach of a restrictive covenant, the defect existed before the buyer became involved. The buyer's solicitor will expect your side to resolve it — and if the resolution is an indemnity policy rather than a retrospective application or legal remedy, your side is expected to fund it.

There are exceptions:

• Chancel repair liability. This is a historical quirk rather than a defect caused by the seller. In some transactions the buyer pays for the chancel repair indemnity policy, in others the seller does, and occasionally the cost is split. There is no fixed convention, and it often depends on local practice and the negotiation between the parties.
• Search indemnity insurance. When a search indemnity policy is taken out instead of a full local authority search, the buyer usually pays because the policy replaces a search that would have been the buyer's cost anyway.
• Negotiated positions. Ultimately, who pays is a matter for negotiation. If the buyer is keen to proceed and the seller is resistant to paying, the buyer may agree to fund the policy to keep the transaction moving. Conversely, a seller in a strong negotiating position might still agree to pay simply to remove any friction from the sale.

If you are selling your property and your solicitor tells you that an indemnity policy is needed, expect to be asked to pay for it in most situations. The cost is almost always modest compared to the sale price, and refusing to pay can cause delays or put the sale at risk.

How much does indemnity insurance cost?

The cost of an indemnity policy depends on three main factors: the type of risk being covered, the value of the property, and the insurer. Most standard residential policies fall within the £20 to £300 range.

At the lower end, a chancel repair indemnity policy for a £300,000 property might cost just £18 to £25. At the upper end, a policy covering a restrictive covenant breach on a high-value property could cost £200 to £500 or more.

Your solicitor does not profit from selling indemnity insurance. They obtain the policy from a specialist legal indemnity insurer (such as Aviva, Titlesolv, or CLS) and pass the premium on to you at cost. Some firms have panel arrangements that allow them to obtain competitive rates.

To put this in context: the cost of a typical indemnity policy is a fraction of what it would cost to resolve the underlying issue. Applying for a retrospective building regulations certificate can cost £500 to £2,000 or more once you factor in building control fees, professional assessments, and the cost of any remedial work required. An indemnity policy covering the same risk might cost £50 to £150 and be arranged the same day.

How indemnity insurance works in practice

Understanding the lifecycle of an indemnity policy helps you see why it is such a common tool in conveyancing. Here is how it typically plays out:

1. The issue is identified. The buyer's solicitor reviews the title, search results, and your property disclosures and spots a defect — for example, a loft conversion without a building control completion certificate.
2. An enquiry is raised. The buyer's solicitor raises an enquiry asking your solicitor to resolve the issue. Your solicitor investigates and advises you on the options.
3. Insurance is recommended. If fixing the defect is impractical, your solicitor recommends an indemnity policy as the most proportionate solution. They explain the cost and obtain your agreement.
4. The policy is obtained. Your solicitor contacts their panel insurer, provides the relevant details, and obtains a quotation. Once approved, the policy is issued — often within the same working day.
5. The policy is provided to the buyer's side. Your solicitor sends the policy to the buyer's solicitor, who reviews it to confirm it provides adequate protection. The buyer's solicitor also checks that the mortgage lender accepts the policy.
6. Exchange and completion proceed. With the indemnity policy in place, the enquiry is resolved and the transaction can proceed to exchange. The policy cost is usually added to the seller's completion statement and deducted from the sale proceeds.

The entire process is handled by your solicitor. You do not need to contact insurers, fill in application forms, or negotiate terms. Your main involvement is giving your solicitor the go-ahead and agreeing to pay the premium.

What indemnity insurance does not cover

Indemnity insurance is a practical tool, but it has clear limitations. Understanding what is not covered helps you avoid unpleasant surprises:

• Issues that have already resulted in enforcement action. If the local authority has already issued an enforcement notice or begun proceedings, the risk has crystallised and no insurer will cover it. Indemnity insurance only works when the defect is dormant — known about but not yet acted upon.
• Deliberate concealment. If you knowingly conceal a defect that you are required to disclose, any resulting claim may be void. Honesty in your property information forms is essential.
• Physical defects. Indemnity insurance covers legal and compliance risks, not physical problems with the building. A leaking roof, subsidence, or damp are not covered by conveyancing indemnity policies — those are matters for a building survey and buildings insurance.
• Future changes. The policy covers the position as it stands at the date of the policy. If the law changes, new enforcement powers are introduced, or the local authority's approach shifts, the policy may not cover the new risk.
• Contact with the relevant authority. Many indemnity policies contain a condition that the insured party must not contact the local authority or other body about the issue covered by the policy. Drawing attention to the defect could void the cover. Your solicitor will make this clear.

Indemnity insurance vs fixing the underlying issue

Sellers sometimes ask whether they should fix the defect properly rather than insuring against it. In some cases, yes — but in most common conveyancing scenarios, indemnity insurance is the better option. Here is why:

• Speed. An indemnity policy can be arranged within a day. Applying for a retrospective building regulations certificate or regularisation order can take weeks or months. For sellers who want to speed up conveyancing, this matters.
• Cost. A typical policy costs £20 to £300. The cost of resolving the underlying issue can run into thousands of pounds once professional fees, application costs, and any required remedial work are factored in.
• Certainty of outcome. An indemnity policy provides immediate resolution. A retrospective application may be refused, conditions may be imposed, or the process may uncover further issues that need to be addressed.
• Risk of making things worse. Contacting the local authority about a historical issue can draw attention to it and trigger enforcement action that would not otherwise have occurred. An indemnity policy avoids this risk entirely.

However, there are situations where fixing the issue is preferable. If the defect is recent and easily correctable, if the buyer insists on a proper resolution rather than insurance, or if the property value is high enough that the risk warrants a more thorough approach, your solicitor may advise against relying solely on indemnity insurance.

What this means for sellers preparing to sell

If you know your property has potential title defects or missing certificates, there are several things you can do before listing to make the process smoother:

• Gather your paperwork. Collect any building regulations certificates, planning permissions, guarantees for structural or remedial work, and documentation for alterations. If you cannot find them, tell your solicitor early so they can assess whether indemnity insurance will be needed.
• Be honest in your property information forms. The TA6 and other disclosure forms ask specific questions about alterations, planning, building control, and disputes. Answering honestly (even if the answer is unfavourable) protects you legally and ensures your solicitor can arrange appropriate insurance before it becomes a last-minute problem.
• Budget for the possibility. If you suspect an indemnity policy may be needed, setting aside £100 to £300 in your selling budget is sensible. Most policies are cheaper than this, but it helps to be prepared.
• Instruct your solicitor early. The earlier your solicitor reviews the title and identifies potential issues, the more time they have to arrange insurance without it holding up the sale. Waiting until a buyer is in place and their solicitor raises enquiries adds unnecessary pressure.

Pine helps sellers prepare for these situations by guiding you through your property information forms before you list, so that potential defects are identified early and your solicitor can arrange any necessary indemnity policies in advance rather than at the last minute.

How indemnity insurance differs from other types of property insurance

Conveyancing indemnity insurance is sometimes confused with other insurance products used in property transactions. Here is how it differs:

• Buildings insurance covers physical damage to the structure of the property (fire, flood, subsidence). Conveyancing indemnity insurance covers legal and compliance defects.
• Search indemnity insurance is a specific type of indemnity policy that replaces local authority searches with an insurance policy. It covers different risks from standard conveyancing indemnity insurance and is typically paid for by the buyer.
• Title insurance is a broader product common in the United States that covers a wide range of title risks in a single policy. In England and Wales, the convention is to use individual indemnity policies for specific defects rather than a single comprehensive title insurance policy.
• Professional indemnity insurance (PII) protects your solicitor against claims arising from their own negligence. It is not the same as the indemnity insurance arranged for your property — PII protects the solicitor, while conveyancing indemnity insurance protects the property owner and lender.

Key conditions and exclusions to be aware of

Before your solicitor arranges an indemnity policy, they will review the terms carefully. As a seller, you should be aware of the following standard conditions:

• No contact clause. Most policies require that the insured party does not contact the local authority, planning department, or other relevant body about the issue covered by the policy. Making an enquiry could void the cover entirely.
• No known claims. The defect must not have already resulted in enforcement action, legal proceedings, or a formal complaint. The policy covers dormant risks, not active disputes.
• Accurate disclosure. The information provided to the insurer when arranging the policy must be accurate. If it later emerges that material facts were withheld, the insurer may refuse a claim.
• Policy limit. The policy will have a maximum payout, usually set at the property's purchase price. If the property increases in value over time, the cover may become insufficient. Some policies include an index-linked uplift to address this.

Your solicitor will explain these conditions to you and confirm that the buyer's solicitor and mortgage lender are satisfied with the policy terms before exchange.

How much does indemnity insurance cost?

Indemnity insurance is one of the most affordable elements of a property transaction. The premium is a one-off payment — there are no annual renewals, monthly direct debits, or ongoing charges. You pay once and the policy remains in force indefinitely, passing to future owners of the property.

The exact cost depends on the value of the property and the nature of the risk being insured. Higher-value properties and more complex defects attract slightly higher premiums, but even at the upper end the cost is modest relative to the overall transaction. The table below gives a guide to typical costs for the most common issue types.

These figures are indicative for standard residential properties in England and Wales. Your solicitor obtains the policy from a specialist legal indemnity insurer and will provide a precise quotation before you commit.

When does your solicitor recommend indemnity insurance?

Solicitors recommend indemnity insurance when the risk of a claim is low but the cost of resolving the underlying issue is disproportionately high. It is a pragmatic solution — rather than spending hundreds or thousands of pounds chasing retrospective approvals that may take months to obtain, a modest one-off premium transfers the financial risk to an insurer.

The most common scenarios where your solicitor is likely to recommend an indemnity policy include:

• Missing certificates. Building regulations completion certificates, FENSA certificates for replacement windows, or electrical installation certificates that have been lost or were never obtained in the first place.
• Minor covenant breaches. Where a restrictive covenant has been breached (for example, a covenant prohibiting external alterations) but no one has complained or taken action, and the breach is long-standing.
• Historic alterations without sign-off. Extensions, loft conversions, or structural changes carried out years ago without formal planning permission or building control approval, where retrospective application is impractical.
• Boundary discrepancies. Where the physical boundaries of the property do not match the title plan precisely, but there is no active dispute with neighbours.
• Chancel repair areas. Properties located in parishes where chancel repair liability has not been formally ruled out, requiring a low-cost policy as a precaution.

In every case, your solicitor's recommendation is not the end of the process. The buyer's solicitor and the buyer's mortgage lender must also accept the policy before the transaction can proceed. Your solicitor checks the lender's requirements in the UK Finance Mortgage Lenders' Handbook and confirms that the specific policy wording satisfies both the buyer's solicitor and the lender before exchange of contracts.

Sources and further reading

• Law Society — Conveyancing practice notes and guidance on indemnity policies: lawsociety.org.uk
• Council for Licensed Conveyancers (CLC) — Standards and guidance for licensed conveyancers including indemnity insurance practice: clc.gov.uk
• HomeOwners Alliance — Independent advice on indemnity insurance and conveyancing for home sellers: hoa.org.uk
• UK Finance Mortgage Lenders' Handbook — Individual lender requirements for indemnity insurance acceptance: lendershandbook.ukfinance.org.uk
• HM Land Registry — Title registration requirements and practice guides: gov.uk/government/organisations/land-registry
• Solicitors Regulation Authority (SRA) — Regulatory guidance for solicitors advising on indemnity insurance: sra.org.uk
• Building Regulations (England) — Regularisation — GOV.UK guidance on retrospective building control applications: gov.uk/guidance/building-regulations-approval

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