What term describes the exclusion of liability for certain title defects in a title insurance binder or policy?

The term that describes the exclusion of liability for certain title defects in a title insurance binder or policy is "exception." In the context of title insurance, an exception is a specific provision that outlines situations or defects that are not covered by the policy. These exceptions are important as they delineate the boundaries of what the insurance will and will not protect against, allowing both the insurer and the insured to understand their respective rights and liabilities regarding any defects in the title.

For example, if a title insurance policy includes an exception for easements that are visible on the property, the insurer is stating they will not cover claims related to that easement. By doing so, the policy ensures clarity by identifying potential issues that the policyholder should be aware of, providing them with the opportunity to address these concerns before finalizing any transaction.

Other terms like exemption, exclusion, and limitation have different meanings in the realm of insurance and legal contexts. "Exemption" often refers to a removal from obligations or a release from a duty, while "exclusion" generally signifies a broader category of items not covered, and "limitation" might refer to cap on coverage rather than specifying what is excluded from coverage. Understanding these distinctions helps clarify the specific role of "exception" in