What is a portfolio wrapper policy?
A portfolio wrapper policy provides protection against unknown title risks and unexpected third-party challenges to title and legal ownership issues.
It doesn’t necessarily remove the need for title due diligence to be conducted; it simply speeds up the process in times when you’re working to a tight deadline of the disposal or acquisition of many assets and therefore can’t review each title in time.
These policies help facilitate a clean exit strategy. A seller can sell with the benefit of title guarantee and avoid title contingent liabilities. A buyer will have peace of mind that protection is provided on all insured assets.
How does a portfolio wrapper policy protect your clients?
As these policies are designed to provide protection against unknown title risks and unexpected third-party challenges to title and legal ownership issues, it provides the insured and/or lender with comfort that they have comprehensive coverage.
The use of portfolio indemnity insurance is particularly valuable for distressed asset auction sales where an administrator is involved, and no title warranties are given.
What will the policy cover?
The policy will provide cover for unknown title risks which could arise, these include but are not limited to:
- Restrictive Covenants
- Mines and minerals
How long will I be covered?
The duration of the policy is in perpetuity for a one-off premium payment.
If full DD is conducted in the future (usually when the insured sells) and a defect is identified, the insurance protects the original insured party and usually successor by resolving the issue or providing cover for that defect.
Why choose PIB Insurance Brokers?With extensive experience in the legal indemnity market, we don’t act as a post-box. We ask all the right questions at the beginning to ensure that we have a clear risk summary before we approach insurers.
Information we require to obtain a quotation
So that we can approach insurers, we will require the following information:
- Insured details
- Limit of indemnity for each property
- Title numbers
- Overall limit of indemnity
- Insured use
- Details of the type of transaction taking place i.e. acquisition or disposal