CILEx Conveyancing Level 6 Practice Exam

When a covenant has been breached in the past, the practical way to protect a buyer or lender is to obtain indemnity insurance. This type of cover provides financial protection against the potential consequences of that past breach or future enforcement of the covenant. It helps create a marketable title by mitigating the risk that someone could claim damages or require costly remedial action due to the breach. It doesn’t stop the breach or erase the covenant itself—that would be achieved by an injunction or a variation/dissolution, neither of which addresses the need to insure against the financial impact of a past breach. So indemnity insurance is the remedy used to cover past breaches of covenants.