Why do you need indemnity insurance when selling a house?

The main reason for sellers to purchase indemnity insurance is to make the sale smoother or prevent the buyer from pulling out. If you've made alterations, such as an extension or loft conversion, without the correct planning permissions, a buyer may want insurance to cover the risk.

Does the buyer or seller pay for indemnity insurance?

It’s usually negotiated between the buyer’s and seller’s solicitors. If the seller caused the defect or can't provide information, they may pay. Otherwise, it might fall to the buyer, or the cost could be shared.

Who is covered by indemnity insurance?

Indemnity insurance covers the property, not the person, and it passes to the new owner when the property is sold.

Does indemnity insurance reduce the need for conveyancing searches?

No. Indemnity insurance is a safety net, not a replacement for conveyancing searches.

How long does it take to get indemnity insurance?

Most indemnity insurance policies can be arranged within a couple of days, unless the case is complex.

Can you invalidate indemnity insurance?

Yes — actions such as informing a third party or applying for retrospective planning permission can void the policy.

What is chancel repair indemnity insurance?

Chancel repair indemnity insurance protects you against a historic legal obligation that requires some property owners to contribute to parish church repair costs. The policy covers legal costs or compensation if a claim is made in the future.

How will I know if I need to get chancel repair indemnity insurance?

The Land Registry title will show if a chancel repair notice is registered. However, liability can still exist without a notice. A separate chancel repair search can identify any risk, and your conveyancer can advise if insurance is recommended.

Conveyancing - Ways to sell

What is indemnity insurance when buying or selling property?

Q: What does indemnity insurance cover?

Common reasons include missing planning permissions, boundary disputes, absent easements, restrictive covenants, missing boiler or window certificates, chancel repairs, and buying without property searches.

Q: How much does indemnity insurance cost?

Typically, indemnity insurance costs between £20 and £300.

Q: How long does indemnity insurance last for?

Indemnity insurance is a one-off cost that lasts for the lifetime of the property. If the property's value increases significantly, the policy may need reviewing to ensure it provides adequate cover.

4 min read

When buying or selling a house, your conveyancer may recommend that you get indemnity insurance, which protects you financially if a legal issue arises with a property after a purchase or sale is complete. Here, we will explain in detail what indemnity insurance is in property transactions, and why and when you may need it.

Parminder Phull

Conveyancing Manager

Updated on February 25th 2026

Published April 24th 2024

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What is indemnity insurance?

In summary, property indemnity insurance (or title insurance) insures against legal defects with a property and covers legal costs or fees that arise from these issues, not the physical cost of replacing or repairing issues. Unlike other types of insurance, it is a one-off payment that covers the property itself, often extending to future owners.

It can be useful for higher-risk properties, providing some cover for future legal issues that arise due to issues such as a lack of a building regulation certificate or planning permission for additions to the property. Often, this policy is paid for by the seller as it can help speed up or complete a sale that the buyer may otherwise pull out of or be unable to secure a mortgage for, but it can be split or covered by the buyer depending on circumstances.

In this article:

What is indemnity insurance?

Indemnity insurance is a specific type of protection you can get when buying or selling a property. This policy covers costs if you get a legal claim made against you in the future because of missing paperwork or a legal issue with the property. It helps pay for any legal fees or compensation, so you don’t have to cover these costs yourself.

Important to note is that indemnity insurance does not cover the physical cost to fix or replace a defect; it covers the financial risk of a third party challenging or enforcing the issue.

How much does indemnity insurance cost?

Typically in the UK, when getting indemnity insurance to sell a house, you’d be looking to pay anywhere between £20 and £300 for the policy. However, the actual cost will vary depending on the type of issue you want to be covered for and the property’s value. For example, for minor issues you‘ll likely pay less, whereas policies to cover you against planning permission issues are likely be more.

This is a one-off, non-renewable cost that lasts for the lifetime of the property, and has to be organised through your solicitor or conveyancer.

What factors impact the cost of indemnity insurance?

The main factors that impact the cost of indemnity insurance for a property are the risk involved and the total value of the house. Common examples of higher risk properties include:

Missing building regulations
Lack of planning permission
Breach of restrictive covenants (such as unauthorised alterations)
Absent landlord or missing consent in leasehold properties
Rights of way or access disputes
Missing certificates for works (e.g. electrical installation certificates)

Why do you need indemnity insurance when buying a house?

Although your conveyancer or solicitor will do their best to find out all the information about a property, sometimes it isn’t possible. It’s in these cases that they would recommend that you take out indemnity insurance in case a legal issue were to arise later down the line, relating to a potential defect or missing information. This will cover the legal costs and fees associated with this issue, avoiding you having to pay this out of pocket.

Do I need indemnity insurance when selling a house?

Whilst you do not legally need indemnity insurance to sell a house, it is often required by buyers (or their lenders/ conveyancers) to purchase a property where legal defects exist. The main reason for sellers to purchase indemnity insurance is to make the sale of a property smoother, or stop the buyer from pulling out. If you have made alterations to the house, such as an extension, or loft conversion, and haven't got the correct planning permissions, a new buyer may not want to take on the risk without the insurance.

Therefore, if your property falls into this category, you will often need indemnity insurance to proceed with the sale. However, it is worth ensuring that your property actually does possess these legal defects, and if it is needed, that your solicitor is arranging the policy with a trustworthy insurer.

What does indemnity insurance cover?

Indemnity insurance is purchased for a property to cover you against legal defects or missing information that would be very costly or time-consuming to deal with. Below are common types of issues you might need an indemnity insurance policy for:

Missing planning permissions – if the seller cannot provide evidence of something that would require planning permission, such as an extension you should get indemnity insurance, so you are not liable for any fines or legal costs in the future. You may also want to get an additional survey to ensure that it is structurally sound.
Boundary disputes or absence of easement – if there are discrepancies in the property’s boundary or access information an indemnity insurance may help protect you against disputes with neighbours further down the line over access (like driveways) or services (like cable installation).
Old or restrictive covenants – in older properties there can be covenants that restrict you from doing certain things with the property. Even if previous owners have breached this covenant, you can still take out indemnity insurance to protect yourself against any liabilities in the future.
Boiler or window installation – when you get things like these installed you will get a certificate to prove they have been installed within their regulations. If these cannot be provided, you may want to get indemnity insurance.
Chancel repairs - when a property is within the medieval parishes of a church it could be liable to help cover the costs of repairs. Indemnity insurance would cover those costs.
No search - if you're buying a house with cash, or buying a property at auction, and you can't, or don't opt to, get all the usual property searches, you can get indemnity insurance to cover you against future losses.

What is not covered by indemnity insurance?

Indemnity insurance does not cover the cost to repair or replace anything on the property, only the legal costs incurred.

Indemnity insurance also may not cover defects that were known about before the policy was taken out (e.g. if you have knowingly bought a house with missing planning permission, you may not then be able to take out an indemnity insurance policy on the property).

Examples of issues that would not be covered include:

If a faulty boiler with no installation certificate breaks, the insurance will not cover the cost of a new boiler.
If a structurally unsound extension was built without planning permission, the insurance would cover any potential costs or fines, but not the costs of repairing this.
If you bought a property with an extension you knew was missing planning permission, or if the local council is aware of this, you are unlikely to be able to take out an indemnity policy for the property.
If building work is poorly carried out or substandard, indemnity insurance will not cover the cost of putting the work right — it only covers certain legal or enforcement risks, not workmanship issues.
If you contact the local authority about a missing consent before taking out a policy, the indemnity insurance is likely to be invalid, as the policy usually only applies where the issue has not already been raised with the relevant authority.

What does indemnity insurance cover?		What isn't covered by indemnity insurance?
✔ damages, compensation, costs and/or expenses (but not fines or other penalties) which you have to pay because of an Order;		❌ Future losses when you sell because your buyers aren't prepared to accept building works without retrospective sign off. This can mean you have to sell the property lower than the current market value because your buyers aren't prepared to take the risk
✔ the amount by which the value of a property is reduced by the effect of an Order;		❌ Personal injury due to faulty works. For example, the electrics weren't installed to the correct standards and either give you an electric shock or the circuit gets overloaded and causes a fire.
✔ any other costs and expenses you incur with the Insurers written consent because of an insured risk.

Are there any cons to getting indemnity insurance?

Although indemnity insurance can protect you, it's important to weigh up the pros and cons of getting the insurance, as it is an additional expense.

Here are some potential cons:

Cost: It's another expense to consider when buying or selling.
Limited benefits when selling: If you're a seller, you typically pay for this insurance to help the sale go through. However, you yourself won’t reap the benefits, as indemnity insurance is designed to protect the property, not any previous owners.
Delays: While these policies can help prevent a sale collapsing, discussing and agreeing who gets the insurance can sometimes delay proceedings.
Coverage: The protection offered by indemnity insurance is often specific to a particular issue/s, such as past planning permission or building regulation approvals. If a problem arises that isn’t covered by the policy, you won’t have protection.
Complacency: Due diligence may not be thoroughly completed if the buyer or seller assumes issues are covered by the policy, without fully understanding its scope.

While indemnity insurance can offer peace of mind, you should fully understand the benefits and potential drawbacks before adding it to your purchase or sale.

How long does indemnity insurance last for?

When you get indemnity insurance, you just pay a one-off cost which then lasts a lifetime. Indemnity insurance covers the property and not the person, therefore it only ever need to be purchased once. However, if the property’s value increases, it may need to be reviewed so that the value you’re covered for also increases.

Indemnity Insurance FAQs

It’s usually negotiated between the buyer’s and seller’s solicitors as to who should pay for the indemnity insurance. If it’s a defect caused by the seller, or they haven’t been able to provide certain information, they may be willing to pay. However, if it’s a defect that has been in place for a while, it may fall on the buyer to pay for the insurance, as it will ultimately be their risk going forward. Alternatively, in some cases the buyer and seller may share the cost.
Either way, your conveyancer will help to advise you on the best thing to do for you.
Your conveyancer might be able to order a personal local authority search, which may speed up the process, but this can come at an extra cost. Make sure you pay for searches promptly to avoid delays. You should also return all search-related forms quickly and double-check all property information from the outset to reduce the risk of follow-up queries.
Indemnity insurance is for the property, not for the person. Therefore, it gets passed from seller to buyer in a property transaction.
If you’re selling a property which already has an indemnity insurance policy, it will transfer to the new owner upon completion. The only caveat is that if the property’s value has increased since the indemnity insurance was bought, there may be an additional premium to pay to increase the cover.
Either way, your conveyancer will help to advise you on the best thing to do for you.
Your conveyancer might be able to order a personal local authority search, which may speed up the process, but this can come at an extra cost. Make sure you pay for searches promptly to avoid delays. You should also return all search-related forms quickly and double-check all property information from the outset to reduce the risk of follow-up queries.
No. Indemnity insurance should only be used as a safety net, rather than a replacement to the conveyancing searches you will get as part of the standard conveyancing process. Indemnity insurance covers legal and compensation costs, however the cost to fix the issue if needed will be on the homeowner, therefore when buying a property, you should be aware of as many potential issues as possible before the sale becomes legally binding.
Ultimately, this is something only you will be able to answer, depending on what the defect or issue is and how much of a risk it is to you. If you are unsure whether you need indemnity insurance, these are some factors you should consider:
Getting it means that you will always be financially protected against the issue
Your mortgage provider may insist it is needed
Will it make this sale, or a future sale, go through easier?
The upfront cost now vs the potential future costs
Could it be easily resolved without getting the insurance?
The likelihood of this issue being raised in the future
It's also important to consider that you may be best to address the root cause of the issue rather than getting the insurance. For example, a bit of research might reveal that an alteration predates current building regulations, and therefore doesn't need insurance, or an issue is easily fixable.
The land registry search will show if a chancel repair liability notice already exists against the property. However, some properties may still be liable even if no notice appears. A separate chancel repair search can identify any potential risk. We include this search in our search packs so you can find out without further delays. Your conveyancer will then advise whether this insurance is recommended, based on the search results and the location of your property.

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