We wrote our first Rights of Light policy back in 2010 and continue to refine our product to meet the needs of the industry.
We were also the first providers on the market to include ‘Agreed Conduct’ wording in our policies. Before then, insurers would often turn away multi-storeyed developments because the litigation costs associated with right of light claims were too big a risk to handle.
Agreed Conduct changed the state of play. Instead of waiting for claims to come to them, it allowed developers to proactively approach neighbouring landowners and agree a fair compensation sum to keep costs down, matters out of court, and their developments moving in the right direction.
It’s now mirrored across the market – helping to insure projects that were otherwise deemed uninsurable and unlock more property development opportunities. Over the years, we’ve developed other key features in our policy to help our clients ultimately achieve the same aim:
1. We don’t apply your deductible to the consequential loss extension.
Other insurers will apply your deductible to consequential loss limits, whereas we’ll cover you for the full amount. These consequential loss extensions can include cover for delay costs, loss of rent, loss of trading profit and much more. And in some instances, these losses can be quite costly.
Example: You make a £200k delay claim on a policy with a £50k deductible.
We’ll pay the full £200,000 claim amount. Other insurers will only cover £150k after the policyholder has paid the £50k deductible.
2. We’ll cover Agreed Conduct costs and fees once they go above your deductible.
As part of the Agreed Conduct process, the insured will have to cover the cost of a settlement as well as any fees for legal advisors. But once those costs and fees exceed your deductible, we’ll cover the remaining amount. Other insurers will only cover the settlement costs, not the legal fees.
Example: Your £50,000 deductible is exceeded by £30,000.
Of the £30,000…
£10,000 accounts for legal fees.
£20,000 is part of the settlement.
We’ll cover the full amount. Other insurers will only pay the £20,000.
3. A limit of £250M for Public Law, Legal Indemnity and Right of Light, all under one policy.
You don’t have to buy three separate policies for Public Law, Legal Indemnity and Rights of Light, each with their own limit of cover and premium. You’ve got the flexibility of having a £250m limit that you can use for issues spanning all three policies.
Traditional policies:
CLS Risk Solutions Rights of Light policy:
4. General Condition 9 (GC9) – we’ll settle sooner, so you pay less later.
We can use this condition for issues in negotiations that aren’t ordinarily covered within the policy, but if we spot an opportunity to settle and reduce your further losses, we’ll take the necessary steps.
Other insurers will follow the same procedure, but they’ll expect you to pay for the increased settlement.
Example: Funding legal advice not included in your policy.
There might be an indirect issue with a third party that causes you to go through legal litigation but isn’t specified in your policy. We’ll step in to leverage a settlement and pay the subsequent costs.
5. Net Ascertained Loss (NAL) – we’ll pay your losses upfront to help you get back on track.
If an event causes a delay to your project – like a temporary injunction putting construction on hold – NAL will step in and cover what you’ll eventually lose as a consequence of that delay. And we’ll arrange payment within four weeks of the event happening, giving you the best chance to recuperate your losses.
Other insurers will only allow you to make a claim once you’ve completed your project and realised the delay.
Example: You’ve been granted a funding programme to deliver a project in 10 years.
In year 1, the project experiences a two-year delay. At that point, you know there will be a two-year period where you won’t be able to fulfil the terms of your contract. And you know, because of that delay, you’re going to experience a loss when the 10 years is up.
With us, you can make a claim right away and we’ll make a payment within 4 weeks of the delayed event. It gives you the capacity to potentially make up for lost time. Most insurers will only pay out at the end of the contract, when it’s a long way past the point of recovering the situation.
6. Flexibility in Agreed Conduct operative provisions.
‘Operative provisions’ are the rules that govern the Agreed Conduct process. Some insurers insist on sticking to a strict format, but we’re much more flexible. As part of our bespoke service, we judge each case on its individual merit and apply the rules of Agreed Conduct to suit the specifics of your project.
7. You can reallocate your deductibles under Agreed Conduct to speed up the process.
For example, if you’ve agreed to negotiate with two of your neighbours to reach a settlement – let’s call them Property A and Property B – and you’ve settled with Property A at £50,000 (£25,000 less than the deductible) you have an additional £25,000 left to persuade Property B to agree a deal. This could mean all your neighbours have settled and are on board with development ahead of time, ensuring you avoid any surprises later on in the project.
It’s what we call a 'surplus' and gives you more control over the negotiations, bypassing the need to contact us and enduring the delay of a claims process.
8. Agreed Conduct administration experience and expertise.
Some insurers will issue you a complex agreed conduct strategy but won’t have the necessary experience to see it through. We‘ve been using agreed conduct in our Rights of Light policies since 2010 and are vastly experienced in handling negotiations.
