Exploring Rights of Light Insurance with Vista Insurance Brokers
At Vista Insurance Brokers, we regularly arrange cover for a variety of specialist construction risks. These include Surety Bonds, Legal Indemnities and Owner Controlled Insurance’s. We are committed to meeting the many challenges development projects face, at every stage of the process.
Today, we are looking at a type of insurance that developers and funders must consider, very early in their risk management strategy. Rights of Light insurance.
There are financial and health benefits to having natural lighting in a building, these include:
Reducing energy costs by utilising natural lighting.
Natural light is vitally important to people’s general health, from the production of Vitamin D to reductions in computer eye strain. It improves nervous system activity, and it supports the regulation of blood pressure.
If people work in a positive environment, productivity and mental performance is increased.
Natural light also enhances the quality of spaces and helps prevents damp and growth of fungi, which is very hazardous to health and damaging to the building structure.
The legal right to natural light is not achieved automatically by a property owner, but there are various ways it can be acquired. The most common being continuous enjoyment of light, through a defined aperture (such as a window), for at least 20 years.
Developers must consider the impact their build proposals might have on neighbouring properties, and whether sunlight would be obstructed. Failure can lead to developments being halted, large settlements being negotiated and even demolition of already completed buildings. Rights of light can be protected by legal action and the costs and delays this causes can be considerable.
There are various options developers can take to address right to light infringements:
- Do nothing, wait, and see.
- Issue a light obstruction notice to see if challenged within the 12-month period. If not the 20-year rights are set to zero.
- Have a polite discussion with the neighbours.
- Local Authorities can appropriate land and this can lawfully override existing rights and restrictive covenants.
The other option is to take out a right to light policy.
In built up areas Rights to Light insurance is commonplace and may be driven by a few situations, including lender requirements, proactivity by the developer or by being in London (it is estimated some 90% of developments are insured).
There are two main options for cover, depending on the approach you wish to take.
There is the wait and see approach which does not allow any contact with affected neighbourhood properties and there is the agreed conduct approach where developers can approach any injured parties and negotiate proactively.
A right of light policy will typically cover legal costs and expenses, settlement, costs of demolition/alteration/reinstatement, third party contractual costs, abortive costs, and reduction in market value.
Please contact Vista Insurance Brokers to see how we can support all aspects of your forthcoming construction project.
We help with all risks associated with construction/contracting, including:
- Business Interuption
- Goods in Transit
- Employer’s Liability
- Product Liability
- Professional Indemnity
- Contractors All Risk
- Engineering Plant
- Management Liability
- Motor Fleet
- Engineering Inspection
- Performance Bonds
- Cyber Liability
- Latent Defects