Indemnity insurance covers a risk, not a defect

Everything here earned its place by changing an outcome. Nothing about title indemnity insurance is included to round the number up.

What the product does

A single-premium policy covers the financial consequences if a specified defect causes loss, such as enforcement action or a claim by a third party. It typically covers the owner, their successors and their lender, for the life of the property rather than an annual term. It does not obtain a missing consent, fix a defective title or make an unlawful alteration lawful.

The building remains exactly as it was; only the financial exposure is transferred.

When it appears

Missing building regulation or planning documentation for past work, breach of a restrictive covenant, absent rights of way, unknown beneficiaries and lost title deeds are the classic triggers. It is quick and cheap relative to the alternatives, which is why conveyancers offer it routinely. Sellers usually pay, since it resolves a problem in their title, though this is negotiable.

On an ordinary week, it is a practical compromise rather than a first-best solution, and treating it as either extreme is a mistake.

The rules that make it available

Insurers require that nobody has approached the local authority, the covenant beneficiary or the neighbour about the issue. A single enquiry can make the risk uninsurable, which is why conveyancers warn against contacting anyone before a policy is in place. It also requires that the defect has existed for a period without challenge in many cases.

Put simply, this is the practical reason not to phone the council about that unpermitted conservatory before speaking to your conveyancer.

What it does not solve

It does not protect against the work being defective, unsafe or badly built, which is a survey question rather than a legal one. If a structure fails or a system is dangerous, the policy does not fund putting it right. It may not respond if you carry out further work that draws attention to the issue, so future plans matter.

Read the exclusions, particularly around alterations, disclosure and the sum insured.

Lender attitudes

Lenders differ on which policies they accept and on the required cover level, and some require a specific form of wording. The sum insured should reflect the value of the property rather than the cost of the missing paperwork, and it should ideally allow for future increases.

Your conveyancer checks the lender requirements, and it is worth asking whether they have. A policy the lender rejects at the last minute is a completion delay.

If that does not fit your week, it is not a failure of willpower.

The alternative routes

Retrospective consent, a regularisation certificate, a formal covenant release or an application to correct the register all fix the underlying problem. They take longer, cost more and sometimes fail, which is exactly why insurance exists. For a defect you will live with quietly, insurance is usually proportionate; for one you intend to build on, it may not be.

For most people, this is general information; a conveyancer must advise on any specific policy.

Everything above, in order of what to do first

1. What the product does. A single-premium policy covers the financial consequences if a specified defect causes loss, such as enforcement action or a claim by a third party.
2. When it appears. Missing building regulation or planning documentation for past work, breach of a restrictive covenant, absent rights of way, unknown beneficiaries and lost title deeds are the classic triggers.
3. The rules that make it available. Insurers require that nobody has approached the local authority, the covenant beneficiary or the neighbour about the issue.
4. What it does not solve. It does not protect against the work being defective, unsafe or badly built, which is a survey question rather than a legal one.
5. Lender attitudes. Lenders differ on which policies they accept and on the required cover level, and some require a specific form of wording.
6. The alternative routes. Retrospective consent, a regularisation certificate, a formal covenant release or an application to correct the register all fix the underlying problem.

The takeaway

Ask what loss the policy pays for, then ask what would still be your problem if it paid out.

Pick the one that costs you least, and let the rest wait.