When you're buying or selling a property in the UK, missing documents or legal uncertainties can put a deal at risk. One way to keep things moving is through indemnity insurance — a type of cover that helps protect buyers, sellers, and lenders against specific legal issues that may arise post-sale.
In this guide, we’ll explain what indemnity insurance on a house is, how it works, who pays for it, and whether it’s worth considering for your property transaction.
What is indemnity insurance on a house?
Indemnity insurance is a one-off policy that protects the buyer (and often the lender) from the risk of legal or financial consequences due to issues with the property’s paperwork or title. It’s not the same as home insurance — it doesn’t cover physical damage but instead covers specific legal risks.
These may include:
Lack of planning permission or building regulations approval
Missing certificates (boiler, FENSA, etc.)
Restrictive covenants
Lack of access rights (easements)
Title or ownership defects
The key benefit? It allows the transaction to proceed without the need to resolve the issue fully, which could be time-consuming or even impossible.
When do you need indemnity insurance?
You may need indemnity insurance if:
The seller can't provide evidence of planning consent for an extension
There’s no building control completion certificate
The property is accessed via an unadopted road
Windows have been replaced without a FENSA certificate
There’s no boiler installation certificate
A legal right-of-way is unrecorded
The land is subject to a restrictive covenant or chancel repair liability
In many cases, your conveyancer or solicitor will recommend indemnity insurance to resolve these risks quickly and keep the transaction on track.
What does property indemnity insurance cover?
The insurance covers potential legal costs, compensation, or enforcement action related to a known issue, assuming it hasn’t already caused a problem.
It typically covers:
Claims made by third parties (e.g. local councils, neighbours, churches)
Legal fees and defence costs
Settlement or damages awarded due to the covered issue
It does not cover:
The cost of physically fixing the problem
Known or disclosed risks
Future modifications to the property related to the risk
Common types of indemnity insurance in the UK
Some of the most frequently used policies include:
Planning permission indemnity
Building regulations indemnity
Boiler certificate indemnity
FENSA/window certificate indemnity
Restrictive covenant insurance
Absence of easement cover
Chancel repair liability insurance
Insolvency and right of access policies
Each of these covers a very specific risk and is usually written as a single-issue policy.
How much does an indemnity policy cost for a house?
The cost of indemnity insurance on a house varies by type and property value. Most policies are priced between £20 and £300, with some specialist or multi-risk policies costing more.
Examples:
Basic boiler or FENSA certificate indemnity: ~£25
Planning or building regs indemnity: ~£100–£200
Title defect cover: up to £300+ for complex cases
Many buyers search online for an “indemnity insurance on a house calculator” or a “property indemnity insurance quote”, but most quotes are obtained through conveyancers who liaise directly with insurers.
Who pays indemnity insurance, buyer or seller?
This is usually negotiated between the parties, but it’s often the seller who covers the cost, especially if they can’t produce documentation.
If the buyer or their mortgage lender demands the policy, they may agree to pay instead. A good rule of thumb: the party responsible for the issue tends to foot the bill.
Looking up “who pays for an indemnity policy” often leads to conflicting advice, but your solicitor will guide you based on UK conveyancing norms.
How long does indemnity insurance last?
Most property indemnity insurance policies last for the lifetime of ownership, as long as the property is held by the buyer who took out the policy.
Some policies can be transferred to new owners, but this depends on the insurer and the terms of the original cover.
Can indemnity insurance be invalidated?
Yes — the most common reasons are:
Not disclosing key facts when applying
Telling third parties (like the local council) about the issue
Making changes to the property that relate to the insured risk
If you invalidate the policy, you may lose cover, and your buyer could walk away from the deal. Always follow your solicitor’s advice when taking out or relying on indemnity cover.
Is it worth getting indemnity insurance when selling a house?
Many sellers wonder: Do I need indemnity insurance when selling a house? The answer depends on your specific situation.
You should consider it if:
Your buyer requests it
There’s no time to resolve the issue
You want to avoid renegotiating the sale price
A mortgage lender insists on cover
✅ Indemnity insurance on a house: pros and cons
Pros:
Keeps the sale progressing
Protects the buyer and their lender
One-off cost
Easy to arrange
Cons:
Doesn’t fix the underlying issue
Can be voided by incorrect use
May not transfer to new owners automatically
FAQs about indemnity insurance on a house
What is indemnity insurance on a house?
It’s a legal cover that protects the buyer (and sometimes the lender or seller) from costs arising due to issues like missing documents, legal rights, or planning breaches.
How much does an indemnity policy cost for a house?
Typical costs range from £20 to £300, depending on the issue and property value. Most are one-off payments made during the sale process.
Who pays the indemnity insurance, the buyer or seller?
It’s usually the seller, especially if they’re unable to supply the relevant paperwork. However, buyers or lenders may also offer to pay to avoid delays.
What is the main purpose of indemnity?
The main purpose is to allow a property transaction to go ahead without resolving the legal issue, while protecting the parties from future financial or legal consequences.
Next steps: Is indemnity insurance right for you?
If you’re involved in a UK property transaction and your solicitor suggests an indemnity policy, it’s usually a sign of a minor issue that can be resolved quickly with cover. Whether you're buying, selling, or remortgaging, property indemnity insurance is a fast and affordable way to safeguard your interests and keep the process smooth.
For a tailored recommendation, always speak to your solicitor or conveyancer, and if you're unsure about costs, request a property indemnity insurance quote through your legal team.