Which type of insurance is likely to cover loss from disclosures about property title issues?

Lender's Title Insurance is specifically designed to protect lenders against losses arising from defects in the title of a property. This type of insurance addresses issues related to property title, such as liens, encumbrances, or other claims that may arise, potentially affecting ownership rights. When a property is purchased, a title search is conducted to identify any existing title issues, and lender's title insurance provides financial protection against losses from unforeseen claims that might emerge after the purchase is finalized.

This insurance is crucial since it helps ensure that the buyer and the lender are safeguarded against title-related legal disputes that could arise. Such disputes might include claims from previous owners, unresolved liens, or other title-related complications that could jeopardize the lender's investment or the buyer's ownership rights.

Considering the other options, liability insurance generally covers claims resulting from negligence or harm to others, homeowners insurance protects against damages to the physical structure and belongings, and flood insurance is specifically designed to cover damage caused by flooding. None of these alternatives provide coverage for the unique risks associated with property title issues, hence reinforcing the significance of lender's title insurance in the real estate and mortgage lending process.