My buyer's solicitor wants an indemnity policy. Should I?

This request usually lands weeks into a sale, in a list of enquiries, in language nobody explains. It reads like your buyer has found something wrong. In most cases they have found something missing, which is a different problem and a much smaller one.

It is also a good sign about your buyer. Enquiries like this one mean their solicitor is deep into the file, and their solicitor is being paid by them to be there.

What is an indemnity policy?

An indemnity policy is an insurance policy that pays out if a known defect in a property's paperwork later causes a financial loss. It is bought once, as a single premium, and it stays with the property. Cover passes to the next owner and to their lender when the home is sold again.

It exists because some paperwork problems cannot be fixed quickly, and some cannot be fixed at all. A certificate that was never issued in 2009 cannot be produced now. Insurance answers the risk instead of the paperwork.

What does it actually cover, and what does it not?

• It covers legal costs and financial loss if the person who could enforce the defect does enforce it. That might be a council, a freeholder, or whoever holds the benefit of a restrictive covenant.
• It does not make the work compliant. The extension without building regulations sign-off is still an extension without sign-off.
• It does not pay for repairs or replacement. If a boiler has no certificate, the policy will not fix the boiler.
• It does not protect you if the risk has already been triggered, which is why nobody should raise the issue with the council or the freeholder while a policy is being arranged.

That last point is the one sellers get wrong, and it is worth stating plainly. Insurers price this cover on the basis that the party who could act does not know. If they are put on notice, the policy can be refused, and an existing policy can be invalidated. Applying for retrospective consent after taking out a policy has the same effect.

How much does an indemnity policy cost?

Less than most people fear. These are typical one-off premiums as set out by Homeward Legal in May 2026.

Set that against the alternative. Applying for a regularisation certificate or retrospective consent means council timescales, possible opening up of the work, and a sale sitting still while it happens. Most buyers will not wait for that, and most sellers do not want to.

Who pays for it, you or the buyer?

Usually you. The convention is that the party responsible for the defect pays, and the defect existed before the buyer was involved. Levi Solicitors put it plainly in February 2023: in most cases it is the seller who pays the premium, though the cost is sometimes split.

It is negotiable, and worth negotiating when the sum is at the higher end or when the buyer's side is asking for several policies at once. It is rarely worth a fight at £40.

What should you do when the request comes in?

1. 1. Ask which enquiry the policy answers

   Ask your solicitor for the specific enquiry behind the request, in plain terms. You are entitled to know exactly what gap is being insured before you agree to pay for anything.

2. 2. Ask whether the policy is actually needed

   Some requests are precautionary rather than necessary. Where work is old enough that enforcement is no longer realistic, or a covenant is historic and unenforceable in practice, your solicitor may tell you a policy adds nothing.

3. 3. Get the quote before you agree

   Ask for the actual premium in writing rather than agreeing in principle. Most policies are quoted and issued within a day or two.

4. 4. Say nothing to the council, the freeholder or the neighbour

   Do not ring the council about retrospective consent, and do not raise it with a freeholder or neighbour, while a policy is in play. Putting them on notice can make the cover unavailable and leave you with the original problem and no protection.

5. 5. Agree who pays, in writing, through the solicitors

   If you are splitting the cost or asking the buyer to cover it, get that recorded between the two firms rather than agreed verbally with the estate agent.

6. 6. Keep the policy with the sale file

   The document passes to your buyer and matters again the next time the property changes hands. Your solicitor will send it across, and a copy in your own records costs nothing.

What is normal here, and what is a red flag?

How do you keep control of this?

Read your buyer by what they have spent, not by what they say. An indemnity request is one of the better signals you will get: their solicitor is doing detailed title work, and the buyer is paying for that time.

• Treat the policy as a cost of sale and price it into your net figure, in the same way you would treat searches or a management pack.
• Keep the policy and any price renegotiation as separate conversations. Agreeing to one is not agreeing to the other.
• Match your spending to theirs. Instructing your own solicitor early is cheap and keeps the sale moving. Larger irreversible spends belong later, once the buyer has committed money of their own.
• If the same issue comes up again with a future buyer, you already have the answer and the policy, so it stops being a delay.

Common questions about indemnity policies

Where this sits in your sale

An indemnity request is a paperwork problem with a price on it, and the price is usually small. The seller who handles it calmly keeps the sale, the timetable and the decision. ValuQ gives UK homeowners free, side-by-side property valuations from competing local estate agents, so the choices in a sale stay with the person who owns the home. It is free for homeowners, always.