Building Regulations Indemnity Insurance: When and Why You Need It

Introduction

Building Regulations Indemnity Insurance is a specialist legal indemnity product that provides cover against the risk of enforcement action by the local authority for building works carried out without Building Regulations approval, or where Building Regulations approval was obtained but no Completion Certificate was issued. It is primarily a property transaction tool — used at the point of sale or remortgage when the absence of Building Regulations documentation is identified as a legal query. This guide explains what Building Regulations Indemnity Insurance covers, when it is needed, and how to obtain it.

What the Policy Covers

A Building Regulations Indemnity Insurance policy typically provides cover for:

• The cost of defending enforcement proceedings brought by the local authority for works carried out without Building Regulations approval
• The cost of carrying out works required as a result of enforcement action — bringing the works into compliance with the Building Regulations
• Diminution in value of the property as a result of enforcement action or the requirement to carry out remedial works
• Legal costs incurred in defending enforcement action

The policy does not provide cover for the cost of obtaining Building Regulations approval retrospectively — it covers the legal risk, not the building compliance cost.

When Building Regulations Indemnity Insurance Is Needed

The most common circumstances requiring Building Regulations Indemnity Insurance are:

• Extension or loft conversion without Building Regulations approval: Works carried out under permitted development rights do not require planning permission, but they do still require Building Regulations approval. Many older extensions were carried out without ever obtaining Building Regulations approval — particularly those built before the 1980s when enforcement was less rigorous.
• Full Plans approval obtained but Completion Certificate never issued: Where a Building Regulations application was submitted and approved but the works were never inspected to completion or the Completion Certificate was never obtained. The works may well comply, but without the certificate, there is no formal evidence.
• Building Notice works without any completion record: Works carried out under a Building Notice where no record of the inspector's visits or any completion sign-off exists.
• Historic works with no documentation: Very old works (pre-1985) where the LABC no longer holds records and no certificate was ever retained by the owners.

What Is Not Covered

Building Regulations Indemnity Insurance does not cover:

• Works that are known to be structurally unsafe or non-compliant with current Building Regulations — the insurance covers the legal risk, not the physical defect
• Works that have been brought to the attention of the local authority — once the authority is aware of the works, the insurance risk profile changes significantly and cover may not be available
• Future works to the property that require new Building Regulations approval
• Situations where the local authority has already taken or threatened enforcement action

Limitations on Local Authority Contact

A critical limitation of Building Regulations Indemnity Insurance is that the policy is typically voided if the local authority is contacted about the works — either by the buyer, the seller, or their solicitors — before the policy is in place. This is because contact with the authority alerts them to the potential breach, making enforcement action more likely. For this reason, solicitors and homeowners should never approach the local authority about potentially unregulated works before taking legal advice and considering whether indemnity insurance is the appropriate route.

How to Obtain the Policy

Building Regulations Indemnity Insurance is obtained through specialist legal indemnity insurers, typically via a solicitor or licensed conveyancer. The process is:

1. The solicitor identifies the absence of Building Regulations documentation as a title query
2. The solicitor obtains quotes from specialist indemnity insurers (commonly Arc Legal, Aviva, First Title, Defaqto) on the basis of a risk description
3. The insurers assess the risk and provide a premium quotation
4. The policy is placed and a certificate issued, which is provided to the purchaser's solicitor and lender

Premium rates depend on the property value, the nature of the works, their age, and the borough-specific enforcement risk. Typical premiums for a straightforward residential extension without Building Regulations documentation: £200–£800 as a single one-off premium. The policy runs with the property and transfers to successive owners.

Regularisation vs Insurance

For more recent works (within the past 5–10 years), a regularisation application to the LABC is sometimes preferable to indemnity insurance — particularly where the works are believed to comply with the Building Regulations and the LABC will issue a Regularisation Certificate without requiring extensive remediation. Regularisation provides a formal compliance certificate rather than a risk insurance product, which is a cleaner outcome. However, regularisation requires a site inspection and may require opening up of works to check hidden elements — and the LABC may identify non-compliant works that require remediation. Where the compliance position is uncertain, legal advice on the relative merits of regularisation and indemnity insurance is important.

Conclusion

Building Regulations Indemnity Insurance is a pragmatic and widely accepted solution for the absence of Building Regulations documentation in property transactions. It is not a substitute for proper compliance but is an appropriate response to historic non-compliance that does not affect the structural safety or habitability of the property. For current projects, the correct response to a Building Regulations requirement is to obtain approval and a Completion Certificate — not to rely on the future availability of indemnity insurance. An architect managing a project through to completion will ensure all required documentation is obtained and retained as a matter of course.