Legal indemnity is no longer 'last-minute insurance'

Legal indemnity insurance has long carried a slightly outdated reputation in property law. It is often treated as something that appears at the tail end of a transaction, brought in when time has run out and a defect cannot realistically be resolved any other way.

That picture no longer reflects how indemnity is actually being used — or how many property solicitors now approach it. 

In many transactions, indemnity is being considered much earlier. Rather than being a response to pressure at exchange, it is becoming part of early-stage risk assessment.

This is not simply a change in timing. It affects how advice is given, how matters are managed day to day, and how risk is evaluated across the transaction as a whole. 

Earlier visibility does not mean faster solutions 

Title and planning risks are now visible far sooner than they were a decade ago. Digital title records, searchable planning histories and more detailed local authority data mean potential issues often surface at the very beginning of a deal. 

What has not changed is how long it takes to resolve many of those issues. Missing paperwork, historic covenants, undocumented works and unclear rights of access still tend to rely on third parties. That process can be slow, expensive or simply impractical while a transaction is live. In practice, there is now a wider gap between identifying a problem and being able to formally resolve it. 

Legal indemnity insurance helps close that gap. Not because it is quick, but because it allows a risk to be properly evaluated, accepted and managed without assuming every defect can or should be corrected. For that reason, it is often more useful when considered at the point the risk is first identified, rather than weeks later when positions have hardened. 

Using legal indemnity to shape a transaction 

When introduced early enough, legal indemnity is not just a fallback option. It can form part of the transaction strategy itself. It allows solicitors to present clients with clear, defined choices rather than open-ended problems. The discussion shifts from “this must be fixed” to “this risk can be managed”. 

That difference is important. 

Rectification is sometimes the right route, but not always the most proportionate one. Seeking retrospective consent, contacting beneficiaries or approaching landlords can introduce fresh risks that are more serious than the original defect. In some situations, taking those steps can remove the possibility of obtaining legal indemnity cover altogether. 

Early consideration encourages more disciplined analysis. Is the defect historic or ongoing? Has it existed for years without challenge? How will a lender view the risk? Is the client planning changes that could invalidate cover?  

Lender expectations vary — and timing matters 

There is no uniform lender position on title defects. Some are comfortable with legal indemnity. Others are more cautious or will only accept cover where the structure and scope are clearly defined. 

Leaving legal indemnity until late in the process reduces the opportunity to align cover with lender expectations. Considering it earlier allows the correct policy to be selected, the right level of cover to be set, and unnecessary disclosure or activity to be avoided — all of which can affect whether cover is accepted. It also supports clearer reporting, showing that risk has been identified and managed deliberately rather than reactively. 

Maintaining momentum and managing risk 

Transactions rarely collapse because of the defect itself. More often, transactions fall apart because of delay and uncertainty. The longer an issue remains unresolved, the more likely it is to disrupt chains, prompt renegotiation or affect funding. 

Early use of legal indemnity can help keep transactions moving. It provides a workable route forward where perfection is unrealistic and delay carries its own cost. This is particularly relevant in commercial and investment work, where clients are usually comfortable with managed risk but have little patience for unnecessary delay. 

None of this lowers professional standards. It reflects the reality that a solicitor’s role is not always to remove risk entirely, but to advise on whether it is acceptable and to record that advice clearly. 

Legal indemnity insurance should never replace proper investigation. Increasingly, though, it is a legitimate outcome of that investigation. The difference between strong and poor use of legal indemnity is not just about when it is introduced, but why.