Mines and Minerals Insurance

What is a Mines and Minerals Indemnity policy?

A mines and minerals indemnity policy is an insurance to protect against an entry on the Title register of a property in which mineral rights have been reserved to a certain party.

Background

Sometimes the Mines & Mineral Rights in respect of Property or land are excepted and/or reserved to a third party. This will be noted within the Land Registry register of title, under the Property Register section. If this is the case the Property Register will usually state that Mines and Mineral Rights are excluded from the title. In short, this means that when the property was transferred in the past a previous owner had reserved their right to the minerals which lie under the land and this gives them the ability to exercise their right and extract minerals after they have disposed of the actual property.

In some cases, there is a caution against first registration for the minerals on the property, or even a completely separate freehold title to them. This is found less frequently. However, where it does arise, it tends to show that there is a significant interest in the land and rights to extract the minerals could be exercised at any time.

One last issue which comes with the exclusion of mines and minerals on the title is the potential trespass risk. This is particularly an issue for property developers, as when foundations are being dug, there may be deliberate or accidental encroachment into the minerals, which are not within the title. This would be classed as trespass.

In what circumstances is cover required?

Where there is a proposed development of a property, there are a number of material issues that can arise. There is the concern that as the Mines and Minerals are owned by a third party, they could attempt to prevent the development, exercise their rights to extract the mines and minerals, or even claim that your development has trespassed on their Mines and Minerals rights and seek substantial compensation.

Mines and Minerals insurance policies can protect you/your client should any of the above issues cause a financial loss before, during or after the development.

Product Features:

Risk covered: Includes payment of damages and compensation, loss of market value and other costs and expenses.