Mining and Mineral Rights Indemnity Insurance Bank conveyancing requirements

Santander and Virgin Money, like most mortgage companies, have their own requirements when it comes to mining and mineral rights indemnity insurance. The content herein aims to help residential conveyancing solicitors on the numerous bank conveyancing panel where the title to be charged contains mining and mineral rights. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each lender, whether it be Accord, Natwest or HSBC. The content on this page Is not to be read as mining and mineral rights indemnity insurance advice.

Need help with mining and mineral rights indemnity insurance from your lender?


Bank of Scotland and Yorkshire Bank Home Loans in common with most lenders, instructions are such that where mining and mineral rights indemnity insurance is to be taken out:

  • your firm must point out to the borrower that the borrower must adhere to any conditions of the mining and mineral rights indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in relation to the policy
  • the mining and mineral rights indemnity insurance policy should always be in favor of the bank and, if possible, for the benefit of the mortgagor and any subsequent owner or bank. Where the mortgagor will not be covered by the mining and mineral rights indemnity insurance policy, the mortgagor needs to be advised accordingly.
  • the minimum level of cover for the policy must meet the requirements for the bank (See Part II Handbook requirements )
  • the mining and mineral rights indemnity insurance policy should be effected without charge to the bank
  • you must disclose to the insurer all relevant information which you have acquired
  • you are responsible for approving the terms of the mining and mineral rights policy on behalf of the bank
  • your firm must provide a duplicate of the mining and mineral rights indemnity insurance to the mortgagor and explain to the borrower why the mining and mineral rights indemnity insurance policy was effected and that a further policy could be mandatory if there is supplemental borrowing against the security of the property
  • the mining and mineral rights indemnity insurance policy should not contain terms which you recognise would void or compromise the interests of the mortgage company
As to the level of cover for the mining and mineral rights indemnity insurance policy (or for that matter any indemnity insurance), consider the following sampling of Paragraph 9.2 of the Part 2 requirements for lenders:
Lender Requirement
Accord Buy to Let An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee.
Allied Irish Bank At least the amount of the mortgage advance.
Barclays plc Higher of purchase price or valuation
Britannia Cover to the full value of the property.
Chelsea Building Society An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee.
Coutts & Co The open market value of the property according to the valuation report.
Coutts Finance The open market value of the property according to the valuation report.
Halifax An amount at least equal to the mortgage advance.
Hodge An amount equal to the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage, the borrower(s) and any successor in Title.
Intelligent Finance An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer.
Keystone Property Finance An amount equal to 110% of the valuation or purchase price - whichever is the greater
Landmark Preference for full market value of the property, but if this level of cover is not available, will accept a minimum of the actual loan amount. You must approve the policy on our behalf.
Leeds Building Society An amount at least equal to the amount of the mortgage advance plus 10%. Any indemnity insurance policy must protect the borrowers, any successor in title and any Mortgagee.
Legal & General Home Finance The policy should be for the full market value of the property and indexed linked. The policy must be for our benefit, and for the benefit of the borrower where available. The policy must benefit all successors and assigns.
Metro Bank The open market value of the property according to the valuation report.
Rooftop Mortgages The value of the property for mortgage purposes as disclosed in the valuation.
Sainsbury's Bank An amount equal to the higher of the value of the property or the purchase price.
The Mortgage Works The full purchase price/value of the property whichever is higher
Royal Bank of Scotland -Natwest One An amount equal to the value of the property.
Virgin We require the full market value of the Property. Where this isn't available, we'll accept the loan amount as a minimum.

Non lender-specific considerations

The extent of the terms for mining and mineral rights indemnity insurance are identified in the policy paperwork. Conveyancing solicitors should point your non-lender client to the mining and mineral rights indemnity insurance policy document. Mining and Mineral Rights indemnity insurance is designed to afford indemnity in respect of the risks specified in the policy schedule - so it’s important to check the document to ensure it is as it should be. The duration of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Again, please check that this is as you expected.

Mining and Mineral Rights Contingency insurance: Important features and benefits:

Protection via such a policy is to cover the risk of third parties looking to enforce rights that can affect the use of a property. Mining and Mineral Rights indemnity insurance Policies should be checked for the following
  • All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
  • The cost of altering or taking down all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
  • All sums paid with consent in writing from the insurance company to liberate the property from the risks specified in the mining and mineral rights policy.
  • Loss in market value due to the successful enforcement of the risks specified in the mining and mineral rights indemnity insurance.
  • Reimbursement for compensation incurred in any action concerning the risks specified in the mining and mineral rights indemnity insurance, including incurred costs and expenses.
  • The cost of works (including professional fees) for the purpose of the development started, before the commencement of proceedings for the enforcement of the risks specified in the mining and mineral rights policy, to the extent that such costs are rendered abortive by court decision.

You also need to be sure that the answers on the application form are accurate. However remote the likelihood of a claim on the lender insurance policy might be you can be sure that the insurer will check the details on any proposal form thoroughly before any claim is admitted.

Mining and Mineral Rights Indemnity Insurance has limitations - Additional considerations

Mining and Mineral Rights Indemnity insurance isn’t a solution to all of the relevant problems.
Content on this webpage is for general information for Regulated law firms in England and Wales on the the mortgage company conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the bank indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information. An important exclusion applying to most mining and mineral rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.

The content set out above is in relation to properties in England and Wales.