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We answer some of the most common questions posed to our underwriters about the cover we provide for commercial properties and development sites.

Q: Is cover available for developers before planning permission has been granted? 

A: Yes. We are often able to consider providing cover prior to a planning application for all the usual title defects, including restrictive covenants, access and services, and mining and mineral rights.

We have also developed a ‘two-stage’ cover option, so that the land owner and the developer can split the cost over two stages, each paying for the stage most relevant to their involvement, and at the most appropriate time. Stage one is essentially the ‘pre-planning’ phase and extends up to the grant of planning permission. Stage two takes effect after planning permission has been obtained, with an increased policy limit reflecting the gross development value of the site, and an additional premium payable.

Q: Do you provide cover for option holders and planning promoters?

A: Yes, we are able to consider extending cover to apply both option holders and planning promoters. We do this by adding a policy extension which specially provides cover for losses incurred in relation to specified abortive costs, that arise as a direct result of an injunction preventing the development. For example, the initial up-front fee paid by a planning promoter to a landowner, planning consultants costs associated with the planning application, or engineering costs incurred obtaining technical reports to assess minerals underneath the surface of the property.

Q: Can you provide ‘lift and shift’ cover for development sites? 

A: Yes, we have a specific lift and shift option available for our Outstanding Rights and Easements policy. This policy extension provides cover should any third-party attempt to enforce their rights or easements over existing drains, pipes or sewers, that a developer intends to divert within the site, to allow works to take place.

Q: How do you deal with claims on development sites once construction works have started? 

A: Our primary aim is to ensure that the development is able to be completed as it was originally intended. To achieve this, there are a variety of strategies that our Claims team may employ, depending to the situation.

Initially, we will carefully assess whether we can defend the legal claim against the policyholder, and in most cases we should be able to respond with a strong legal defence. If our response is rejected by the party that has brought about the claim, we would look for alternative solutions that could be reached, in the hope of resolving the matter. These may include negotiating the release of any covenants preventing the works from taking place, or acquiring any legal easement that might resolve the issue. In general, we find that when two ‘commercial’ parties are involved, both sides tend to be more open to negotiation.

In certain circumstances, where there is a valid claim and our legal position isn’t as strong as we would like, we may instruct our policyholder to stop works during any dispute, covering any delay costs incurred while legal options are assessed. We would also look to consider any other practical alternatives that could provide a more satisfactory outcome, e.g. considering another route for access or services. 

And, in the worst-case scenario, if development at the site is prevented due to the claim, our policy covers any reduction in market value of the site, as well as any abortive costs and contractual penalties, plus any damages awarded against the policyholder.

In addition to this, for green energy sites, we also offer additional options such as cover for abortive installation costs and the costs of restoring land back to its previous condition, if a claim successfully prevents the intended use.