When building work has been carried out without the required building regulations approval, or when the completion certificate has gone missing, indemnity insurance is often proposed as the quickest way to resolve the issue before a property sale can proceed. It is widely used in UK residential conveyancing — but it is also widely misunderstood.
Indemnity insurance does not make non-compliant work compliant. It does not fix defects, and it does not guarantee that a building will perform safely. What it does do is transfer a specific financial risk — the risk of enforcement action by the local authority — away from the buyer and their mortgage lender. Understanding the difference matters enormously when deciding whether indemnity insurance is the right solution for your situation.
What building regs indemnity insurance covers
A building regulations indemnity policy protects:
- The buyer (and their successors in title, meaning future owners)
- The buyer’s mortgage lender
- Against the financial loss arising from a local authority issuing an enforcement notice under Section 36 of the Building Act 1984
Section 36 allows a council to require works to be altered or removed if they contravene building regulations — but only within 12 months of the work being completed. After 12 months, the local authority’s enforcement powers lapse.
The policy also typically covers loss of value to the property if the issue comes to light and affects saleability, and legal costs involved in defending or responding to enforcement action.
What it does not cover
Indemnity insurance does not cover:
- Structural defects or safety issues arising from the work
- The cost of remediation if work is found to be substandard
- Any work that is actively being investigated by the local authority at the time of purchase
- Situations where the buyer has already approached the council about the missing paperwork
This last point is critical. Once you contact the local authority, the policy will be void. Most insurers will not issue a policy if there has been any contact with the council, because the act of enquiring draws attention to the issue and potentially triggers formal action. If you are considering indemnity insurance, instruct your solicitor before making any calls to building control.
When is indemnity insurance appropriate?
| Situation | Recommended route | Why |
|---|---|---|
| Work completed more than 12 months ago, no council contact | Indemnity insurance | Enforcement window has likely lapsed; risk is low |
| Work completed less than 12 months ago | Regularisation certificate | Enforcement remains live; insurer may refuse |
| Work completed before November 1985 | Indemnity insurance | Regularisation unavailable; only option |
| Structural concerns about the work | Building survey, then regularisation if possible | Insurance covers legal risk, not physical risk |
| Transaction time-critical | Indemnity insurance | Policies can be issued in 1–5 working days |
| Buyer’s lender requires formal sign-off | Check lender requirements first | Some lenders won’t accept indemnity for certain works |
The 12-month enforcement window is the most important factor. Once 12 months have passed since the work was completed (not since the lack of approval was discovered), the council’s power to serve a Section 36 notice has expired. This dramatically reduces the underlying risk, and most insurers are comfortable issuing policies in these circumstances.
What building regulations indemnity insurance costs
Premiums are almost always a single one-off payment, not an annual fee. The policy runs with the property and passes to future owners.
| Property value / scenario | Typical one-off premium |
|---|---|
| Up to £250,000 — minor works (e.g. no completion certificate for kitchen) | £100–£175 |
| £250,000–£500,000 — single extension or loft conversion | £175–£350 |
| £500,000–£1,000,000 — larger or multiple items | £300–£600 |
| Complex or high-value properties | £600–£1,500+ |
Who pays? Traditionally the seller pays, since the missing paperwork is their responsibility. However, this is a negotiating point — in a buyer’s market the seller nearly always pays; in a competitive market buyers sometimes absorb the cost to keep the deal moving.
The regularisation alternative
For work done after 11 November 1985, you can apply to your local authority building control (LABC) for a regularisation certificate — a retrospective approval. The council will inspect the work (which may require opening up walls or lifting floors), assess compliance and, if satisfied, issue a certificate that is legally equivalent to a standard completion certificate.
Regularisation costs £200–£600 for most domestic projects, plus any contractor costs for access works. It takes 4–12 weeks, which is often too slow for a sale with an exchange deadline. But if the work has any structural or safety dimension — an extension that may not have adequate foundations, a loft conversion where the floor joists are unknown — regularisation is far preferable, because a surveyor and the council inspector will actually assess the work rather than simply covering the legal risk.
How to obtain indemnity insurance
Indemnity insurance for missing building regs is not sold on comparison websites — it is arranged through specialist legal indemnity insurers, almost always via your solicitor or a legal indemnity broker. Your conveyancer will typically do this as part of the sale process. Common providers in the UK market include Aviva, CLS Legal Indemnities, Defaqto-rated specialist underwriters and Riskguard, though your solicitor will recommend the appropriate insurer based on the specific risk.
The application process is straightforward: the solicitor completes a proposal form describing the works, their date, the property value and the absence of enforcement contact. A decision is usually made the same day or next working day.
Questions to ask before accepting indemnity insurance
Is the work structurally sound? If there is any doubt, commission a structural engineer’s report. Indemnity insurance will not pay for remedial works.
What does your mortgage lender require? Most high-street lenders accept indemnity insurance for older works, but some have specific exclusions — particularly for extensions on listed buildings or in conservation areas. Check your lender’s handbook (CML/UK Finance Lender’s Handbook, Part 2 for your specific lender) before proceeding.
How old is the work? If it was completed less than 12 months ago, discuss regularisation with your solicitor. Some insurers won’t cover very recent works at all.
Has the council been contacted? Be completely honest with your solicitor. Even an informal enquiry can invalidate a policy.
Is this a listed building? Listed building consent issues are a separate matter from building regulations and require separate advice. Some indemnity policies exclude listed structures.
Common scenarios resolved by indemnity insurance
Converted garage: A garage was converted to habitable space in 2009 without building regs approval. The current owners want to sell. The works are over 12 months old, no enforcement action has been taken, and the buyers’ solicitor has requisitioned evidence of compliance. An indemnity policy is arranged within two days at a cost of £220 — the transaction proceeds.
Missing completion certificate: A kitchen extension was built in 2015 under a full building regs application, but the final inspection was never called for and no completion certificate was issued. The LABC confirms the application was opened and inspections were made at foundation stage and first-fix, but no final. An indemnity policy is issued noting partial compliance; the buyer’s lender accepts it.
Pre-1985 rear extension: A Victorian terrace has a 1970s extension with no building regs paperwork whatsoever. Regularisation is unavailable. A policy is issued at low cost reflecting the age of the works and the expired enforcement period.
In each case the insurance is a practical commercial solution to a legal gap — not confirmation that the work is safe or compliant.
