Adoption of Road or Sewer Indemnity Insurance Bank conveyancing requirements

Leeds Building Society and Birmingham Midshires, like the majority of mortgage companies, have their own requirements when it comes to adoption of road or sewer indemnity insurance. This page sets out to enlighten property law firms on the various bank approved list of panel lawyers where the title for the the property to be mortgaged contains adoption of road or sewer. Solicitors should still check the CML handbook requirements for each mortgage company, for example Godiva Mortgages, Accord or Virgin Money. The information on this page is not focused on adoption of road or sewer indemnity insurance requirements.

Need help with adoption of road or sewer indemnity insurance from your lender?


Coventry BS and Halifax as with the majority of banks, requirements are that where adoption of road or sewer indemnity insurance is to be taken out:

  • your firm is duty bound to explain to the mortgagor that the borrower will need to comply with any conditions of the adoption of road or sewer indemnity insurance policy and that the mortgagor should notify the bank of any notice or potential claim in relation to the policy
  • the limit of indemnity must meet the requirements for the lender (See Part II Handbook requirements )
  • the adoption of road or sewer indemnity insurance policy must be for the benefit of the bank and, wherever possible, for the benefit of the borrower and any future registered proprietor or lender. If the mortgagor will not be protected by the adoption of road or sewer indemnity insurance policy, the borrower must be informed accordingly.
  • you is required to disclose to the insurer all relevant information which you have gathered
  • the adoption of road or sewer indemnity insurance policy should not contain conditions that you recognise would invalidate or prejudice the interests of the lender
  • the adoption of road or sewer indemnity insurance policy should be placed on risk without charge to the lender
  • your practice must send a copy of the adoption of road or sewer indemnity insurance to the borrower and explain to the mortgagor why the adoption of road or sewer indemnity insurance policy was effected and that additional insurance might be necessary if there is further borrowing against the mortgaged property
  • your firm are responsible for approving the terms of the adoption of road or sewer policy on behalf of the bank
Regarding the extent of cover for the adoption of road or sewer indemnity insurance policy (or for that matter any indemnity insurance), consider the following sampling of Section 9.2 of the CML handbook PII requirements for banks:
Lender Requirement
Barclays plc Higher of purchase price or valuation
Bluestone Mortgages An amount at least equal to the total mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee.
Capital Home Loans An amount at least equal to the mortgage advance.
Co operative Bank Cover to full value of the property.
Coutts Finance The open market value of the property according to the valuation report.
Coventry Building Society Minimum of the value of the property.
Darlington Building Society The higher of value or purchase price of the property.
Habito Higher of purchase price or valuation
Hampden The open market value of the property according to the valuation report.
Holmesdale Building Society 110%
Lloyds TSB Scotland The value of the property
Mortgage Agency Services 110% of the purchase price or valuation, whichever is greater
Nationwide Building Society Purchase Price (valuation if price is at a discount).
Contact Issuing Office for advice on a remortgage
Platform 110% of principal sum.
Rooftop Mortgages The value of the property for mortgage purposes as disclosed in the valuation.
Skipton Building Society For lender only cover we will accept a minimum of 110% (index-linked) of the amount of the loan.
Royal Bank of Scotland An amount equal to the value of the property.
Topaz Finance Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked.
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 adoption of road or sewer indemnity insurance are shown in the policy document. Conveyancing solicitors should direct your non-lender client to the adoption of road or sewer indemnity insurance policy paperwork. The intention of adoption of road or sewer indemnity insurance is to afford indemnity in respect of the risks set out in the policy schedule - so you should check the document to ensure it is in order. The continuance of this non-investment insurance agreement is in perpetuity unless otherwise stated in the adoption of road or sewer indemnity insurance policy. It is well worth checking that the time frame is correct.

Adoption of Road or Sewer Contingency insurance: Important aspects and benefits:

The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the adoption of road or sewer indemnity insurance schedule. Adoption of Road or Sewer indemnity insurance Cover normally includes
  • Loss in market value due to the successful enforcement of the risks specified in the adoption of road or sewer indemnity insurance.
  • The out of pocket expenses of altering or demolishing 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 ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
  • Expenses for works (including professional fees) for the purpose of the development started, prior to proceedings for the enforcement of the risks specified in the adoption of road or sewer policy, to the extent that such costs are rendered abortive by court order.
  • Cover for compensation incurred in any action concerning the risks specified in the adoption of road or sewer policy, including incurred costs and expenses.
  • All sums paid with the written consent of the insurance company to free the property from the risks specified in the adoption of road or sewer policy.

As with any insurance policy, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the adoption of road or sewer policy will be invalidated.

Adoption of Road or Sewer Indemnity Insurance has limitations - Supplemental considerations

Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from adoption of road or sewer insurance may be adequate for your client.
Information contained within this webpage is for general information for conveyancers and solicitors in England and Wales on the the bank conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the lender 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 adoption of road or sewer 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 covers to properties in England and Wales.

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