Should you get building regulations indemnity insurance

Building Regulation indemnity insurance is one option available to a buyer when the seller of a property has completed unauthorised works. The question is whether indemnity insurance is the best solution when the building works undertaken by the seller could be dangerous and may affect your future resale value.

Buyers would be better advised not just to indemnify against the potential for removal of the unauthorised works, but to check to see if there are any hidden defects by getting a letter of regularisation. Click to find out more about - a letter of regularisation for unauthorised works.

Most common works include loft conversions, single storey extensions and rewiring. If you aren't sure of the different types of building work that require council sign off then click and read - Building Control Sign Off Explained.

Read on to find out more about building regulations indemnity insurance...

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What does lack of building regulations indemnity policy cover?

In the unlikely event that you need to claim upon the insurance, the policy covers:
  • damages, compensation, costs and/or expenses (but not fines or other penalties) which you have to pay because of an Order;
  • the amount by which the value of the Property is reduced by the effect of an Order;
  • any other costs and expenses you incur with the Insurer’s written consent because of an Insured Risk.

The definition of Order is: A decision made by a court (or another recognised body with authority to make a decision that is legally binding on you) in relation to an Adverse Matter.

To get a quote for Building Regulation Indemnity Insurance you'll need to provide the names of the legal owners, the property address, the name of your mortgage lender and the value of the property.


Click to read a Sample Building Regulation Indemnity Insurance

Is it a 2 bedroom or a 3 bedroom?

If an additional bedroom has been added but the building works neither had planning or building control sign off, then it cannot be marketed as having the additional room. You can only market a property with having 3 bedrooms if all 3 bedrooms have planning permission and building control sign off.

Don't tell the council

In order for you to take out Building Regulations Indemnity Insurance then the council cannot be informed that there are unauthorised works at the property. If the council are made aware then you won't be able to take out indemnity insurance and will be forced to take the longer route of getting the works signed off with a letter of regularisation.

Cost of indemnity insurance for building regulations

The cost of the indemnity insurance depends on the property's value, however for a property costing £500,000 the insurance premium should cost from £180. Considering the general cost of rectifying unauthorised works, this may seem small, yet buyers are well within their rights to ask for the seller to pick up the cost of this policy.

What the indemnity insurance doesn't cover are:

Future losses when you sell because your buyers aren't prepared to accept building works without retrospective sign off. This can mean you have to sell the property lower than the current market value because your new buyers aren't prepared to take the risk.

Personal injury from being injured due to faulty works. For example, the electrics aren't installed to correct standards and either give you an electric shock or the circuit gets over loaded and causes a fire.

Although Lack of Building Regulation Indemnity Insurance covers you for losses to remove the illegal building works, the questions is: 'is it worth ignoring the other risks involved?'

Need help?

If you are unsure what to do or have bought a property that didn't have building control sign off and want to know what to do then give us a call on 0333 344 3234 or email


Related News Articles

Building Regulations
Letter of regularisation for unauthorised building works
Planning Permission

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