We look at some of the most common questions posed to our underwriters.
Q: When looking at cover for a development, should the policy limit be the purchase price of the site or its fully developed value?
A: This is down to your client and their lender to decide. Unlike for residential cases, where the lender often dictates that the limit needs to reflect the full market value of the property, for development risks, we are asked to cover either what is felt reflects the estimated losses in the event of a claim, or the fully developed value.
From our perspective, if the limit is based on the estimated losses, it is useful for us to know what proportion that loss represents compared to the value of the site. As our standard rates are usually based on the fully developed value, we can tailor our quote accordingly.
Q: Are environmental searches covered under your Search policies?
A: Yes, unlike a number of our competitors who automatically exclude claims relating to contaminated land under their Search policies, we cover the CON 29 which can reveal existing remediation enforcement notices.
However, full environmental desk reports are not covered by our Search policy as they provide information on general, much wider environmental issues, such as flood risk which cannot be covered by a legal indemnity policy. Also, most lenders don’t require a full report; they simply need to be aware of any contaminated land enforcement notices revealed in the CON 29 – which are covered by our Search policy.
If your client also requires protection against the threat of an enforcement notice being issued after the policy commencement date, our Home Environmental Liability Policy (HELP) can be taken out.