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Indemnity insurance on a property sale: what it covers and who pays

What indemnity insurance covers on a house sale, who pays, why it protects the buyer and lender without fixing the problem, and when to avoid it.

4 min read
Last reviewed 30 October 2026
By Your Property Check team

Part 1 of 9

What indemnity insurance is

During a sale, your solicitor investigates the title and the paperwork. Sometimes they find a gap that is low risk but hard to resolve. Porter Dodson, a law firm, says indemnity insurance is "often arranged where a legal issue is low risk but difficult to resolve". Fraser Dawbarns, another firm, describes the policy as insurance that keeps a sale moving and protects a buyer from loss caused by title defects.

The key point is what it does not do. Fraser Dawbarns says the policy "does not fix the underlying legal issues". It gives financial protection if the issue later leads to enforcement action or a fall in value. The defect stays where it is.

Part 2 of 9

What it can cover

Between them, the two firms list these typical situations:

Breach of a restrictive covenant, such as business use or fencing rules. Our restrictive covenants guide explains how covenants arise.
Missing planning permission or building regulations approval.
A lack of a documented right of way or access, or easements such as drainage rights.
Missing title deeds.
Potential chancel repair liability, which our chancel repair guide covers.
Adverse possession, where land not registered to the property is used as part of it.

Fraser Dawbarns also mentions non-title risks, such as a lender's concern when purchase funds are gifted or a property is sold at an undervalue. Which risks a given policy covers depends on its wording, so read it.

Part 3 of 9

Who pays

Fraser Dawbarns says: "Traditionally, indemnity policies are paid for by the seller as the legal owner of the property." Porter Dodson says: "In many cases, the Seller pays, but sometimes the Buyer will fund the cost." So the payer can be negotiated, and your solicitor will tell you who is expected to pay in your sale.

The premium is a third-party cost. Fraser Dawbarns says the fees are paid to an insurer and are separate from your conveyancing lawyer's fees. Because the need often emerges late, after the title has been investigated, it is rarely in the original quote.

Part 4 of 9

How much does it cost?

There is no authoritative price. Neither Fraser Dawbarns nor Porter Dodson gives a premium, and no GOV.UK page covers it. Porter Dodson says the one-off premium is typically low relative to the property's value and the risk. That is a description, not a figure. The cost depends on the risk, the property value and the insurer, so ask for the premium in writing before you agree to anything. Porter Dodson adds that if the value rises substantially, you may need to top up the policy when you next sell.

Part 5 of 9

How long does it last?

Fraser Dawbarns says the policy "is unlikely to expire, and is intended to run with the property indefinitely" unless it says otherwise. Porter Dodson says cover usually lasts indefinitely and protects future owners and lenders automatically.

Part 6 of 9

Do lenders accept it?

Porter Dodson says most lenders are familiar with and accept indemnity insurance, provided it meets their requirements, and that the policies offer reassurance to buyers and lenders. The buyer's lender has its own rules, so your solicitor checks the lender's conditions.

Part 7 of 9

When it is not appropriate

This is the part many guides skip, so read it before you agree to a policy.

Do not treat it as a fix. Fraser Dawbarns says the alternative is to investigate and find a legal fix, which may involve surveyors, architects, the council or other bodies. If a real fix is possible, ask whether it is better than a policy.

Be careful about telling third parties. Porter Dodson says: "the issue must not be disclosed to third parties or local authorities, as this could invalidate the cover." So do not approach a neighbour or the council about a title problem before you have spoken to your solicitor.

A known dispute is a different matter. Neither firm's page lists policy exclusions, so we cannot quote a rule. Our reading of Porter Dodson's wording is that a policy is meant for a risk that is low and undisclosed. If a neighbour has already complained or threatened action, do not assume you are covered. Tell your solicitor at once and read the policy wording. Our boundary disputes guide shows how such disputes are usually resolved.

Part 8 of 9

Not the same as the state indemnity

HM Land Registry runs a separate scheme. Its practice guide 39 says anyone who suffers loss because of a mistake in the register can claim indemnity, and that you do not need to show HM Land Registry caused the mistake. The payment is capped at the value of the land, interest or charge immediately before rectification, and a claimant has 6 years from the date they became aware of the claim, or should have, to apply to the court. The guide gives omitting a restrictive covenant from the register as an example of a possible mistake, but says not all such mistakes give rise to indemnity. That is compensation for register errors. A private policy covers a defect the register is accurately recording.

Part 9 of 9

What to do

Ask your solicitor early whether your title has gaps, and gather planning and building regulations papers before you list. Our free property checker shows sold prices, EPC, planning and more for an address, which helps you see what is on record. See our Land Registry search guide for what the register shows. Our glossary has a short entry on indemnity insurance.

This page is general information, not legal or insurance advice.

Our take

Ask what the policy fixes before you accept it

Indemnity insurance protects the buyer and lender if a known problem later causes a loss, but the defect itself stays. No source we read gives a price, so ask for a written quote. Our view: if you are selling, ask your solicitor early whether your title has gaps, and gather the papers before you list.

If a policy would cost you money, our sale method comparison compares auction, estate agent and cash buyer on net proceeds and timescale, so you can weigh it against each route. It does not price a policy, so get that quote in writing first.

Compare sale routes

Our opinion, drawn from the facts on this page: not advice and not a forecast. We earn from OfferCheck reports and from introducing sellers to cash buyers, so weigh it with that in mind (see our disclosure). We are not authorised or regulated by the FCA.

Questions, answered

Frequently asked questions

What does indemnity insurance cover on a house sale?

It covers loss from a known title or paperwork risk, such as a breached restrictive covenant, missing planning or building regulations consent, a missing right of way or missing deeds. The wording of the policy decides what is covered.

Who pays for indemnity insurance in conveyancing?

Traditionally the seller, as the legal owner, according to Fraser Dawbarns. Porter Dodson says the seller pays in many cases but sometimes the buyer funds it. Your solicitor will say who is expected to pay.

Does indemnity insurance fix the problem?

No. It gives financial protection if the issue leads to loss or enforcement action, but the defect remains. Where a legal fix exists, ask your solicitor whether that is the better route.

How much is indemnity insurance for a property?

We found no authoritative price. The sources we read give no premium, so ask for a written quote. Cost depends on the risk, the property value and the insurer.

Can I get indemnity insurance if a neighbour has already complained?

Do not assume so. Policies are aimed at low risk issues, and Porter Dodson says disclosure to third parties can invalidate cover. Tell your solicitor about the complaint and read the policy wording.

Where this comes from

Sources

Last reviewed 30 October 2026 by the Your Property Check team. This page is general information, not legal, tax or financial advice. For your own situation, speak to a conveyancing solicitor or another qualified professional.