insight: pre-planning ahead

insight: pre-planning ahead

“What do you call a Skoda with a sunroof? ...a skip!” You’ve probably heard that joke before and no doubt others made about Skoda cars. The joke is outdated these days, though, as the manufacturer has long since shaken off its unwanted reputation.

Though Skoda have succeeded in altering public perception, to the point where it’s not unusual to spot them on the list of best performing cars each year, we seem to have acquired a reputation of our own that we’d like to shake off. It seems some of our customers believe that we are unwilling to offer cover for legal indemnity policies on a pre-planning basis for development and change of use risks. The truth is, we’ve always been able to provide cover for pre-planning risks and we regularly do.

Our underwriting approach

By their very nature, pre-planning cases are risky from an insurer’s viewpoint as, at that stage, they do not have the comfort of knowing the outcome of the local authority’s public consultation process, and whether any objections relevant to the risk will be raised.

Another key concern, where a preplanning policy is issued, is the possibility that enforceable covenants / rights etc. are claimed during the consultation process but planning consent is then granted; this could result in a significant reduction in the value of the land if the claimants go on to prevent development. Alternatively, the claimants may demand a substantial, sometimes inflated settlement, knowing that the developer is keen to implement their plans.

It’s for these reasons that we have to take care when assessing the risk on a pre-planning basis. That said, declining to quote really is the last resort for us. Before taking that decision, we will look at the background and all the practical factors and then, when the circumstances allow, offer alternative solutions. These might include adding an excess or an exclusion to help offset a significant risk.

One thing’s for sure: we certainly don’t lack the appetite for these enquiries, and we’re always pleased to get our teeth into these type of cases in order to try and provide a quote.

There are a number of policies we can offer on a pre-planning basis, including:

  • access – where there is an unknown road owner and evidence of past use
  • restrictive covenants
  • mining/mineral rights
  • outstanding rights
  • possessory title/adverse possession

Although these are just a few examples of the many covers we offer, we’re happy to welcome requests for any type of pre-planning policy.

An image of a builder showing plans to his clientsGive us a shot!

To set the record straight, we are more than happy to consider development or change of use enquiries for cover on a pre-planning basis and we will adopt a flexible approach when underwriting them. And while we will be thorough in our assessment of the risk, the chances are you’ll get a response from us a lot sooner than from any other provider. Even if you think we can’t help, you’ve nothing to lose by sending us the case details; we view every case on its own merits and we might just surprise you!

Handling claims

We regularly handle claims against policies offered on a pre-planning basis, and we recently dealt with a particularly interesting case that featured not one, but two claims against the same Restrictive Covenant policy. Find out how we protected the developer against these claims.