Legal indemnity insurance provides financial protection, typically covering potential costs and expenses arising from a third party taking action against an insured and resulting loss of value to the property and legal costs.
Insurance does not remedy the insured defect but offers a simple, low cost and more time-efficient alternative to the work required to resolve a defect or where a defect cannot be resolved.
Unlike a conventional insurance policy the premium for a legal indemnity insurance policy is paid only once.
In most cases the policy automatically provides protection for the property owner’s lenders and the benefit of the policy transfers to successors in title and provides cover in perpetuity.
Standard losses that are covered by defective title, restrictive covenant and absence of easements and other indemnity policies are as follows:
- Damages or compensation
- Cost of altering, demolishing and/or reinstating all or any part of the property including any part of any building or other construction on or forming part of the property
- Reduction in market value
- Costs of settlement
- Defence costs
- Cost and expenses incurred with the insurer’s consent
Our breadth of experience and access to a wide variety of insurance markets mean that we can also arrange to include cover for other losses that may be dictated by a particular transaction. These might include potential consequential and business interruption losses where these are relevant such as:
- Increased interest payment on capital monies borrowed where a development is delayed by an insured event
- Loss of gross profit
- Rent receivable
- Relocation costs
- Rent liability