Product Focus: Developers’ Indemnity Policy Background The insured approached First Title in connection with the purchase of two industrial facilities. Whilst there had been much speculation in the press in relation to what the site should be used for in the future, the insured was seeking to obtain planning permission for the site to redevelop it for residential and / or commercial purposes with ancillary infrastructure and amenity areas.
Challenge The development site proved challenging for both the insured and First Title. It is situated near a world heritage site and furthermore, due to the historical nature of the site being acquired over time, it is burdened with multiple risks. As a relevant planning permission had not yet been obtained, the insured needed a policy that would be wide enough to deal with a change of planning use for the development site in the Council’s Local Plan. The insured was concerned that ultimately the land would be transferred to a number of national house builders or companies that would purchase the site in phases but a risk could be enforced by a third party before planning had been granted by the Council. This development site was subject to a number of risks including but not limited
to: mines and mineral exceptions on title, unknown freehold covenants (protective entry), freehold restrictive covenants, rights and reservations pursuant to several historical conveyances and issues relating to lack of vehicular and pedestrian access.
Solution The Developers’ Indemnity Policy is designed to assist clients where they need to manage development costs at the pre-planning stage against the risks associated with the site. The policy minimises risk exposure which could ensure that the insured does not lose support from funders and option holders before planning has been granted. First Title in this case were able to offer cover for all the risks mentioned above during Stage 1 (preplanning) for a percentage of the full premium. The insured was extremely pleased with this approach as they were unclear what planning permission would eventually be obtained but needed to satisfy their board members that insurance covered off the risks that could affect potential use. Provided the insured pays the Stage 2 premium once planning has been granted, First Title’s cover from commencement is seamless. By establishing a clear and structured relationship between the insured and First Title from an early stage of a development project, insured and insurer can work together effectively.
Call: +44 (0)207 160 8100 Email: info@firsttitle.co.uk Visit: www.firsttitle.co.uk First Title Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. First Title Insurance plc is registered in England under company number 01112603. Registered office: First Title Insurance plc, ECA Court, 24-26 South Park, Sevenoaks, Kent TN13 1DU.
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