My Conveyancing Specialist · A plain-English guide for buyers and sellers in England and Wales · Reviewed by Richard James · Last reviewed August 2026

If your solicitor has mentioned an “indemnity policy,” it usually means a small legal wrinkle has turned up that’s cheaper and quicker to insure against than to fix — and it needn’t hold up your sale. Indemnity insurance is a routine part of conveyancing, but it’s widely misunderstood. Here’s what it is, when it’s used, what it does and doesn’t cover, who pays, and how much it costs.

What is an indemnity policy?

An indemnity policy is a type of insurance taken out during conveyancing to protect against a specific legal defect in a property’s title or its compliance history. It protects the buyer, the mortgage lender and future owners against a financial loss if that defect ever comes back to bite.

The key thing to understand is that an indemnity policy does not fix or resolve the underlying issue — the defect stays on the title. What it does is act as a financial safety net: if someone later enforces the problem and you lose money as a result, the policy pays out. It’s insurance against a risk, not a cure for it.

When is indemnity insurance used?

Indemnity insurance comes up when a legal issue is discovered that can’t be resolved quickly, cheaply or with certainty before completion — and where the actual risk of a problem is low. Your conveyancer weighs up whether insuring the risk is more sensible than trying to put it right.

Lack of building regulations or FENSA certificates

The most common trigger is missing paperwork for past building work. If a previous owner built an extension, converted a loft, installed a new boiler or replaced windows without the proper building regulations completion certificate — or without a FENSA certificate for the windows — there’s a risk the local authority could take enforcement action. An indemnity policy covers you against that risk where obtaining the missing sign-off isn’t practical.

Other common situations

• No planning permission for an alteration, or only retrospective permission available
• Restrictive covenant breaches — where the property breaches an old covenant in the deeds, or the covenant’s origin is unknown
• Missing rights — an absent easement, or no documented right of access or drainage across neighbouring land
• Chancel repair liability — a historic liability to contribute to a local church’s repairs
• An absent or dissolved freeholder on a leasehold property

What indemnity insurance covers — and what it doesn’t

A policy typically covers your legal costs, any reduction in the property’s value caused by the defect, and the costs of enforcement or settlement if the risk materialises. Cover extends to you, your lender and, in most cases, future owners.

What it doesn’t cover is just as important: it won’t pay for physical repairs or remedial work, and it doesn’t make the underlying problem go away. If the works were poor quality, that’s a matter for a survey, not an indemnity policy. And a policy only covers the specific defect named in it — nothing else.

The golden rule: don’t tip off the other side

This is the single most important thing to know. Once an indemnity policy is being considered, you (and your conveyancer) must not contact the local authority, the covenant beneficiary, the freeholder or any other relevant party about the defect before the policy is in place. Approaching them can “activate” the risk — alerting someone who might then enforce it — and that usually makes the policy unavailable or void.

The same caution applies afterwards: once you own the property, avoid doing anything that triggers the insured risk (such as making a retrospective application to the council), because it can invalidate your cover. Keep the policy with your paperwork and hand it to your buyer if you sell.

Who pays for indemnity insurance — buyer or seller?

The general rule in England and Wales is that the party responsible for the defect pays — and in practice that usually means the seller, because the problem existed before the buyer came along. The buyer’s solicitor will typically expect the seller’s side to resolve it, and if the resolution is an indemnity policy rather than fixing the issue, the seller funds it.

That said, it’s a point of negotiation handled between the two conveyancers. Sometimes a buyer agrees to pay to keep the purchase moving, or the cost is shared. There’s no hard legal rule — it comes down to what the parties agree.

How much does indemnity insurance cost?

Indemnity policies are usually inexpensive and paid once. As a guide, most fall between £20 and £300, depending on the type of defect and the value of the property. Simple, low-risk policies such as chancel repair cover often cost around £20–£30, while more complex risks — an absent freeholder, or a planning or covenant issue — tend to run £100–£300. Your conveyancer arranges the policy and adds it to your completion statement. (Figures are indicative for 2026 and vary by insurer and property, so treat them as a guide.)

How long does an indemnity policy last?

Unlike buildings or home insurance, which you renew every year, an indemnity policy is a one-off premium with no annual renewal. Most policies run in perpetuity — they cover the property for the lifetime of the risk and pass to future owners and their lenders. That’s why it’s worth keeping the policy document safe: a future buyer’s solicitor will want to see it.

Is it OK to buy a house with an indemnity policy?

In most cases, yes. Indemnity insurance is a routine, low-cost, lender-accepted way of dealing with a minor legal wrinkle, and a policy on the title is not, in itself, a red flag. The important thing is to understand what it covers and why it’s there, so you know the underlying issue hasn’t been fixed — only insured.

It isn’t always the best answer, though. Where the works are significant, or where a proper fix (such as obtaining retrospective consent or resolving the covenant) is realistic, that route may serve you better in the long run. This is exactly the kind of judgement a good conveyancer makes for you — weighing the cost, the risk and the practicalities, and explaining your options clearly.

Frequently asked questions

Who usually pays for indemnity insurance?

Usually the seller, because the defect pre-dates the buyer. It’s negotiable, though, and is settled between the two conveyancers — sometimes the buyer pays or the cost is shared.

How much does an indemnity policy cost in the UK?

Typically £20–£300 as a one-off, depending on the defect and property value — simple policies such as chancel repair can be £20–£30, more complex risks £100–£300.

How long does an indemnity policy last?

Most run in perpetuity from a single one-off premium, with no annual renewal, and pass to future owners and their lenders.

Do I need indemnity insurance when selling a house?

Only if a defect turns up that can’t easily be resolved — for example missing building-regs paperwork or an unknown covenant. Your conveyancer will tell you whether a policy is the sensible route.

Can I buy my own indemnity insurance?

It’s normally arranged by your conveyancer, who identifies the right policy for the specific defect and makes sure it satisfies the other side’s solicitor and your lender. That’s safer than buying one yourself.

This guide is general information as at August 2026 and is not legal or financial advice. Whether an indemnity policy is appropriate — and who should pay for it — depends on your specific transaction, so always follow the advice of your own conveyancer or solicitor.

Buying or selling and need a conveyancer who’ll keep things moving? Get a fixed-fee conveyancing quote today →