Planning and Building Regulations Indemnity Insurance: What It Covers, What Voids It, and Who Pays

01

What It Is

A lack-of-permission indemnity policy is a legal indemnity: the insurer promises to pay specified losses if a named risk occurs. The 2016 sample policy (CLS Risk Solutions, with insurer ERGO Versicherung AG UK Branch, wording v20160301) shows the usual shape:

• Who is insured: the named buyers "and future owners or occupants of the Property", and their mortgage lender or lenders.
• How long: "From the Inception Date, and continuing in perpetuity".
• What risk: matters set out in an Insured Risk Appendix. In the sample appendix reproduced, the risk is "You have no copies of documentation to confirm building regulations approval was obtained in respect of the Works", with "Works" meaning alterations, extensions or works completed before the policy starts.
• How much: a limit of indemnity stated in the schedule, which rises with the property's value up to a maximum of 200% of the stated sum.
• How it is paid for: a single premium shown in the schedule.
• Use: the "Insured Use" is the continued use of the property as a single residential house or flat as constructed at the start date.

The policy is title and legal-risk insurance, normally arranged through the conveyancer: the sample's initial disclosure document is addressed to solicitors and licensed conveyancers acting as intermediaries, says the policyholder is charged "the premium that applies to the insurance policy you request", and says the intermediary who arranges the policy may charge an administration fee.

It is also distinct from a mortgage indemnity policy. The Lenders' Handbook says in terms that its indemnity insurance paragraph "does not relate to mortgage indemnity insurance" (Part 1, para 9.1, archived copy read; see the lender section below).

02

What It Pays For

The sample's "Loss" clause, in the building regulations appendix, covers:

The policy summary adds that the cover is for damages, compensation, costs and expenses "but not fines or other penalties". A separate CLS Property Insight brochure for conveyancers, hosted by a search provider (undated; its file path suggests January 2023), describes the planning and building regulations product as responding where the planning authority issues "an enforcement notice, planning contravention notice or breach of condition notice" (CLS brochure). That is wider than a formal enforcement notice, and it shows how much the wording matters. In the 2016 sample, the defined term "Enforcement Notice" is any "Written communication from the appropriate authority in relation to the Works after the Inception Date".

Insurer control of the claim. If a notice arrives you must tell the insurer as soon as reasonably possible. The sample's claims conditions require you not to incur expense, or make any admission, offer or payment, without the insurer's written consent, and to tell the insurer about any proposed meeting with a third party so that it can attend. With your consent, the insurer may take legal action or apply to a court or the Upper Tribunal (Lands Chamber) on your behalf (General Condition 6), and it takes over your rights if it pays (General Condition 7).

03

What It Doesn't Cover

Read the exclusions before you rely on it. In the 2016 sample:

• Defects and safety. Loss arising from a structural defect or contravention of building regulations that was identified in a survey or Home Buyers Report on or before purchase, or that you or the seller knew about before the policy started, is excluded (Additional Exclusion 3). The policy responds to enforcement over missing documentation. It is not a warranty of the work, and it does not cover problems that were already known or found.
• Your own later works. Loss arising because you "make alterations to the Property after the Inception Date" is excluded (Additional Exclusion 1).
• Approaching the council. Loss arising because you apply for retrospective building regulations approval without the insurer's prior written consent (not to be unreasonably withheld or delayed) is excluded (Additional Exclusion 2). General Condition 2 also bars, without consent, disclosing the policy except to a potential purchaser, their lender and their legal advisers, communicating about the insured risk with a third party, and applying to a court, tribunal or the Land Registry about it.
• Untrue statements of fact. The insurer can refuse or reduce a claim if you confirmed a statement of fact you knew, or could reasonably have been expected to know, was untrue. The sample's statements of fact are that the property is a single house or flat in England or Wales, is not listed, has had no building works known to the seller or buyer in the previous 12 months (4 years in a conservation area), has no known enforcement action, and that neither seller nor buyer has communicated with the planning authority about building regulations irregularities.
• Fines. The summary excludes fines and other penalties from the losses covered.

Lenders and successors in title get a limited protection: the insurer will not refuse a claim to a mortgage lender or a later owner because a statement of fact was untrue, unless they knew it was untrue when it was made.

Standard online policies rest on statements of fact, and they have to be true. A CLS Property Insight brochure says that where you cannot meet the statements of fact, its underwriting team "may be able to provide a bespoke policy offline" (CLS brochure). I have not seen a bespoke wording.

04

The "Don't Contact the Council" Condition

You may read that any contact with the council "voids" indemnity insurance. The accurate position is narrower and depends on the policy.

In the sample, three provisions work together:

1. A statement of fact that neither the seller nor the buyer has communicated with the planning authority about building regulations irregularities at the property (Statement of Fact E).
2. An exclusion for loss that arises because you apply for retrospective building regulations approval without consent (Additional Exclusion 2).
3. A general condition that, without the insurer's written consent, you will not communicate about the insured risk with a third party, or apply to a court, tribunal or the Land Registry about it (General Condition 2).

The consequence is narrower than "void". Under the sample, if you break a general condition, "the Insurer may reject Your claim or reduce the amount of Loss that it pays to the extent that Your breach is responsible for increasing the amount of Loss". If you confirmed a statement of fact you knew, or could reasonably have been expected to know, was untrue, the insurer can refuse or reduce a claim (Exclusion 1).

The wording does not state its own purpose. The effect is to stop the insured prompting the very enforcement the insurer is pricing. The consumer organisation HomeOwners Alliance gives the practical reason: a buyer or seller who approaches the council about work with no completion certificate may prompt an inspection, and it says that policies become invalid if anyone makes such an approach (HomeOwners Alliance, building regulations guide, undated). A conveyancing-industry article submitted by CLS Property Insight says an insured "will invalidate their policy if they speak to the local authority ... without the consent of the insurer and the unauthorised contact triggers enforcement action", and that online cover is still available where contact was made more than five years ago, while contact within five years means the insurer will want to see the correspondence (Today's Conveyancer, CLS Property Insight, 13 December 2021; its footer says it was submitted as part of an advertising agreement and the views are the submitter's).

What this means in practice.

• Before the policy is in force, nobody connected to the purchase should write to the council about the works until the conveyancer has read the wording. That includes the seller, the buyer and the estate agent.
• A routine local search is a request to the council. Whether any particular wording treats it as "communication" is a question for the wording and your conveyancer. Ask.
• What the sample stops, and what it leaves open. Under the sample (building regulations) wording, applying for regularisation needs the insurer's consent (Additional Exclusion 2), and asking the council about the missing approval would be communicating about the insured risk (General Condition 2(b)). A planning policy is likely to treat a lawful development certificate or retrospective application the same way, but check its wording. If you want any of those routes, decide that before buying a policy.
• It is a term of the insurance contract, not a legal rule. It binds you because you accepted the policy.

05

Underwriting Criteria, and Why They May Be Out of Date

The 2016 sample's statement about works in the previous 12 months matches the old building regulations time limit. Until 1 October 2023, a section 36 removal notice could not be given more than 12 months after completion (Building Act 1984 s36(4) as enacted). It is now 10 years, in force in England from 1 October 2023 (s36(4), as annotated, SI 2023/993), and the only saving is for notices already given before that date (reg 7). The separate prosecution time limit in section 35A has also been omitted (s35A).

I found no insurer statement explaining the 12-month figure or saying whether the underwriting changed after October 2023. What the sources do show is that criteria vary by wording and date:

• The 2016 sample: no known works in the previous 12 months (4 years in a conservation area).
• The Today's Conveyancer advertorial (13 December 2021): no online cover for work completed within six months of the request, or four years if the property is listed or in a conservation area, and the property "normally needs to be at least six years old". That article is dated 13 December 2021, before the section 36 limit changed, which is why it describes the limit as twelve months. That has not been the English position since 1 October 2023. Treat its criteria as CLS's online criteria in December 2021, not as today's.

For planning, the limit changed too. In England the council now has 10 years to enforce against building work finished on or after 25 April 2024, and 4 years for work finished before that (s171B; SI 2024/452 reg 5). If you are told a policy is "only needed for work under four years old", ask which law the underwriter is assuming. Ask your conveyancer for the current statements of fact in writing. See planning enforcement time limits for how the dates work.

06

Who Pays and What It Costs

Who pays. There is no statute or Law Society rule that I could find allocating the premium between buyer and seller. The HomeOwners Alliance guide says it "is up for negotiation who pays this cost" (HomeOwners Alliance). The one fixed rule comes from the lender: where indemnity insurance is arranged, the Lenders' Handbook requires that "the policy must be effected without cost to us", meaning the lender (Part 1, para 9.2). The intermediary may also charge an administration fee, as the sample's disclosure document notes.

What it costs. This guide gives no figure. The same HomeOwners Alliance page says the cost of a policy is "directly linked to the cost of the house", and gives one undated example (about £175 on a £500,000 house). That is one consumer-site illustration, not an insurer quote, and I could not find two current published insurer quotes, so this guide gives no figure. Ask your conveyancer for a quote for your property's value and the cover you need. Check the premium, the limit of indemnity and who it protects (buyer, lender, successors).

07

Indemnity Versus Lawful Development Certificate Versus Regularisation Versus Retrospective Application

A rule of thumb, which is my reading of the sources rather than a rule: where the work was permitted development or has clearly passed its time limit and you can evidence it, a certificate answers the planning question for good and avoids the contact-with-council trap. Where there is no evidence, little time and a low risk of enforcement, indemnity insurance is the usual paper solution. Where the work needs permission and is not immune, a policy leaves the risk in place and only pays for loss if it happens, so the buyer should weigh a price reduction or a retrospective application. The detailed buying decision is in our guide to buying a house with no planning permission, and the seller's side in selling a house without planning permission.

08

What Lenders Require

The UK Finance Mortgage Lenders' Handbook (England and Wales) is voluntary: not all lenders use it, and Part 2 sets each lender's own requirements. The wording below is from an archived Part 1 captured on 6 March 2026 (the copy shows "Last modified: 01/07/2017") (Wayback Machine capture).

• Paragraph 5.5.1 tells the conveyancer to take reasonable steps to ensure the property has the necessary planning consents and building regulation approval, that there is no evidence of breach of conditions, and that nothing is revealed which would stop residential use or make enforcement action likely. It then says that where there is evidence of a breach but, in the conveyancer's professional judgment, "no reasonable prospect of enforcement action", and the conveyancer is satisfied that the title is good and marketable and can give an unqualified certificate of title, the lender "will not insist on indemnity insurance".
• Paragraph 5.5.2: where there is such evidence, outstanding conditions will not be met by completion and the conveyancer cannot give an unqualified certificate, the conveyancer must report to the lender.
• Section 9 governs a policy that is used. The conveyancer must approve the terms on the lender's behalf, the limit of indemnity must meet the lender's requirements, the policy must be effected without cost to the lender, the policy must not contain conditions the conveyancer knows would void it or prejudice the lender's interests, and it should be for the lender's benefit and, if possible, the borrower's and later owners'.

So "the lender always insists on it" is not what the Handbook says. A conveyancer who can certify title may not need a policy, and a lender that accepts one will want its terms checked. The HomeOwners Alliance guide says mortgagees' solicitors "will ask for them routinely" (HomeOwners Alliance); the Handbook shows why the answer varies by lender and by the conveyancer's judgment. Tell your broker early.

09

Planning a Future Extension on an Insured House

• The policy. The sample excludes loss arising because you alter the property after the policy starts. A new extension is your own later work, so loss arising from it falls outside the sample policy, and the new work needs its own planning and building regulations position.
• Permitted development. The General Permitted Development Order does not apply to development in connection with an existing building if "the building operations involved in the construction of that building are unlawful" (GPDO art 3(5)(a)). If the old extension is unlawful and not yet immune, an indemnity policy does not change that. It may matter if you plan to build on or join to it. A lawful development certificate for the old work removes the question.
• Contact with the council. An application for the new works puts the site in front of the council. Before submitting anything, read the policy's conditions and consider asking the insurer for consent.
• Immunity over time. The old work may become immune as time passes (s171B), at which point a lawful development certificate becomes the stronger paper. Our lawful development certificate guide covers the application.

10

Other Indemnity Policies You May Meet

Indemnity insurance exists for several different defects, and the same conveyancer may offer more than one policy on a purchase:

• Restrictive covenants. The Lenders' Handbook (para 5.11.1) requires the conveyancer to ask whether the property has been built, altered or used in breach of a covenant, and, if the conveyancer cannot give an unqualified certificate, to arrange indemnity insurance subject to para 5.11.2, under which the lender will not insist where the breach has continued for more than 20 years without challenge and the conveyancer can certify title. See restrictive covenants and planning permission.
• Alterations to a flat. Whether the lease allowed the work is a separate question from planning and building regulations, and it has its own rules: see leasehold alterations and the licence to alter. I did not find a standard policy wording for missing landlord consent, so ask what is available.
• Listed building or conservation area consent, dropped kerbs and other defects. The CLS Property Insight brochure lists separate products for lack of listed building consent, lack of conservation area consent (a consent replaced in England from 1 October 2013 by planning permission for "relevant demolition" (Historic England), so such a policy relates to older demolition), lack of permission for a dropped kerb and breach of a section 106 agreement. The sample planning and building regulations wording requires the property not to be listed, so do not assume a standard policy covers listed building works. I have not seen those other wordings.

11

Wales, Scotland and Northern Ireland

The sample policy is governed by the law of England and Wales and requires the property to be a single house or flat in England or Wales. This guide is about England.