legal
Indemnity insurance
Indemnity insurance, in conveyancing, is a one-off policy that pays out if a known risk with a property's title or paperwork causes a financial loss, for example a breached restrictive covenant or a missing covenant document. It does not fix the underlying problem.
In simple terms
Indemnity insurance covers a known title or paperwork risk, like a breached covenant. It pays out if the problem causes a loss but does not fix it.
Example
A seller built a conservatory years ago without checking a covenant on the title. The buyer's solicitor asks the seller to buy a restrictive covenant policy so the buyer and their lender are protected if the person with the benefit of the covenant ever objects. It is a one-off premium and the sale goes ahead.
If you're buying
A conveyancing firm explains that an indemnity policy is insurance against loss from title problems and does not fix the underlying legal issues. Typical triggers include breached restrictive covenants, missing planning permission or building regulations consent, rights of access across a neighbour's land, and adverse possession of land that is part of the property. The seller traditionally pays a one-off premium, and the policy is generally intended to last indefinitely unless it says otherwise. That firm gives no price and the cost varies by risk, so ask for the premium in writing. Before agreeing to a policy, ask whether the defect can be fixed with a legal solution instead. This is different from the state indemnity run by HM Land Registry, which compensates for mistakes in the register and has a 6 year time limit to apply to court. Read the policy conditions closely before you rely on it. (Sources read 30 October 2026: Fraser Dawbarns indemnity policy guide; GOV.UK practice guide 39, rectification and indemnity.)
If you're selling
Sellers usually pay for the policy, and the need often arises late, so ask your solicitor early whether your title has defects. Gathering planning and building regulations papers before you list may flag problems sooner and give time for a proper fix. Ask your solicitor before contacting anyone about a covenant or title issue.