Lender conveyancing panel conditions re Lost Documents Indemnity Insurance

Nationwide and Lloyds TSB, as with most mortgage companies, have their own specific instructions when it comes to lost documents indemnity insurance. The content herein aims to help conveyancing firms on the numerous mortgage company conveyancing panel where the title to be charged contains lost documents. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each mortgage company, whether it be Yorkshire Building Society, Leeds Building Society or RBS. The content on this page is not focused on lost documents indemnity insurance requirements.

Need help with lost documents indemnity insurance from your lender?


Bank of Scotland and Barnsley BS as with many mortgage companies, obligations require that where lost documents indemnity insurance is to be taken out:

  • the limit of indemnity must satisfy the requirements for the lender (See Part II Handbook requirements )
  • you is duty bound to spell out to the mortgagor that the borrower must comply with any conditions of the lost documents indemnity insurance policy and that the mortgagor should notify the bank of any notice or potential claim in respect of the insurance
  • the lost documents indemnity insurance policy must be placed on risk without expense to the mortgage company
  • you are responsible for approving the terms of the lost documents policy on behalf of the lender
  • the lost documents indemnity insurance policy needs to be in favor of the lender and, if possible, for the benefit of the borrower and any future owner or lender. If the borrower will not be protected by the lost documents indemnity insurance policy, the mortgagor needs to be informed accordingly.
  • you must provide a copy of the lost documents indemnity insurance to the mortgagor and explain to the borrower why the lost documents indemnity insurance policy was effected and that additional insurance may be necessary if there is further lending against the mortgaged property
  • the lost documents indemnity insurance policy should not incorporate terms which you know would invalidate or prejudice the interests of the bank
  • you must reveal to the insurer all relevant information which you have acquired
Regarding the extent of cover for the lost documents 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 mortgage companies:
Lender Requirement
Allied Irish Bank At least the amount of the mortgage advance.
Aviva Equity Release Full value of the property.
Bank of Scotland Not less than mortgage advance plus 10%
Barclays plc Higher of purchase price or valuation
Birmingham Bank Please contact Head of Operations to discuss (Gareth Allen)
Birmingham Midshires An amount equal to at least 110% of the purchase price or value, whichever is higher.
Coutts Finance The open market value of the property according to the valuation report.
HSBC UK Bank The value of the insurance must be for at least the full value of the property
Halifax Loans An amount at least equal to the mortgage advance.
LiveMore An amount equal to the purchase price or value of the property, whichever is higher
Lloyds The value of the property.
Mortgage Express (No 2)
[This lender has not published an answer to this question. Please contact the lender.]
Pepper Money An amount equal to at least 110% of 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 and also the borrower(s).
TSB The value of the property
The Mortgage Works The full purchase price/value of the property whichever is higher
Royal Bank of Scotland An amount equal to the value of the property.
Royal Bank of Scotland -Natwest One An amount equal to the value of the property.
Tipton Coseley Building Society Minimum of mortgage advance.
Vida Homeloans It must be for a minimum of 110% of the purchase price or valuation, whichever is greater
Whistletree The value of the property

General Lost Documents indemnity insurance points to consider

The extent of the terms for lost documents indemnity insurance are explained in the policy paperwork. Conveyancing Practitioners should direct the borrower to the lost documents indemnity insurance policy document. Lost Documents Contingency insurance is devised to afford indemnity in respect of the risks specified in the policy schedule - so it’s important to check the schedule to ensure it is as it should be. The lifetime of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.

Lost Documents indemnity insurance: Significant characteristics 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. Lost Documents indemnity insurance Policies are likely to cover the following
  • Market value reduction due to the successful enforcement of the risks specified in the lost documents insurance.
  • Money paid with consent in writing from the insurance company to free the land from the risks specified in the lost documents indemnity insurance.
  • Liability for damages or compensation incurred in any proceedings in respect of the risks specified in the lost documents indemnity insurance, as well as solicitors charges.
  • The cost of altering or destroying 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 other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
  • The cost of works (including professional fees) for the purpose of the development begun, or contracted for, before the commencement of proceedings for the enforcement of the risks specified in the lost documents policy, to the extent that such costs are rendered abortive by court order.

As is the case with all conventional insurance, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the lost documents policy will not be valid.

Lost Documents Indemnity Insurance has limitations - Further considerations

Lost Documents insurance may satisfy lenders such as Yorkshire Bank Home Loans or HSBC and prevent clients from from suffering financially but it cannot compensate for the stress and inconvenience the emotional suffering - after all the value of a home cannot always be measured in cash in the eyes of the owner.
Information provided on this webpage is for general information for Regulated law firms in England and Wales on the the lender conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the mortgage company 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 lost documents 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.