MOFS Guide to Legal Indemnity Insurance - Flipbook - Page 12
Environmental / Contaminated Land
Very often a “Further Action” report following an Environmental Search
enquiry causes a real hindrance to the conveyancing process. However,
it may be possible to keep things moving smoothly and efficiently by
enquiring whether Contaminated Land Indemnity Insurance is available to
protect the buyer against the costs of remediation of the property following
enforcement proceedings being taken on account of contamination by
the relevant enforcement authority, allowing the conveyancing process to
continue without significant delay.
Good Leasehold Indemnity is available where the title to the property is
registered at the Land Registry with Good Leasehold Title only and where
its validity is subsequently challenged.
Underwriters will review the particular circumstances of each case and
policies are usually available for a limited period of time, e.g. 10/15 years.
As the policy covers the costs associated with the clean-up of the property
(rather than diminution in value), it is possible to determine the limit of
indemnity which may not necessarily equate to the market value of the
property. If it is considered that the costs of remediation would be more
than the property itself is worth, then cover can be sought accordingly.
Any successful challenge would result in significant loss, and cover is
designed to indemnify clients for this figure in the event that legal attempts
at defending such a challenge proved ultimately unsuccessful.
Policies are available for residential and commercial properties and on a
continuing use or development basis.
The limit of indemnity would usually represent the market or developed
value of the property.
If development is anticipated at the property, then cover will be limited
during the period of the development to exclude liability for the costs of
any clean up works required under the terms of the planning permission
for the development or for the costs of dealing with any contamination
discovered during the course of the development.
Did you know...
Where no development is planned, some insurers will consider
adding third party liability and third party bodily injury. This is
offered for additional premium in each case, but is not always
available depending on the precise details of the risk.
Did you know...
Cover is only available on the basis that you are not aware
of any third party claim or dispute regarding any interest in
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