General insurance network CETA has launched a new legal expenses product to cover homebuyers against the costs of pursuing negligent professional advisers.
The Home Buyers Protection Policy provides legal expenses cover for situations such as a solicitor failing to undertake a search properly or a builder refusing to stand by a guarantee.
Policyholders will also be insured against unexpected actions taken by the vendor of the property.
The Home Buyers Policy can be purchased through any of CETA's 3000 members (predominantly IFAs and mortgage brokers) for a one off premium of £30 (plus IPT). The product is underwritten by National Insurance & Guarantee (NIG) and is believed to be a first for the UK.
The policy, which should be taken out by a buyer prior to contracts being exchanged, covers the purchase of a main residence anywhere in the UK. It lasts for 12 months and allows buyers to pursue claims for damages up to a maximum value of £25,000 if their property purchase does not proceed smoothly. There is a policy excess of £100.
CETA managing director David Quick said: "Insurance is all about securing peace of mind. We believe there is a gap in the market for this type of product.
"The Home Buyers policy has been designed to ensure that purchasers can be properly protected at a very competitive rate from the moment they are legally obliged to buy a property."
