Law firm DAC Beachcroft estimates that nearly 20% of property transactions, both commercial and residential, are completed with a legal indemnity policy ( ‘Legal indemnity insurance: a panacea?’ DAC Beachcroft, 30 May 2018). For new solicitors, the intricacies of this type of cover can often get lost in translation. As a former underwriter, I fielded calls daily from solicitors, asking what they needed to know about legal indemnity policies. I have summarised these calls and concerns below for NLJ readers.
1. What legal indemnity insurance is…& what it isn’t
Legal indemnity insurance is used in a property conveyancing transaction where a defect exists (such as lack of planning permission, issues with right of way, absent landlord, etc) that cannot be resolved easily or at all in some cases. The risk is characterised by the potential to cause a loss should the defect be challenged. With this type of policy, you only need pay a single premium, and the cover will last in perpetuity.
