Title Insurance Coverage Available
Title insurance protects the owner or lender against financial loss due to defects in the legal title of a property. For industrial land, especially in high-value or institutionally financed transactions, title insurance is critical for mitigating long-term legal risks. In India, title insurance products are governed by the Insurance Regulatory and Development Authority of India (IRDAI) and offered by registered general insurers in collaboration with title verification service providers.
1. Owner’s Title Insurance Policy
Covers the property owner (individual, company, or developer) against:
- Defects in title or ownership
- Undisclosed liens, encumbrances, or mortgages
- False representation by prior owners or sellers
- Errors in public records, mutation, or registration documents
- Invalid or forged documents in the chain of title
- Adverse possession or third-party claims not disclosed during due diligence
- Easement rights or boundary disputes unknown at the time of purchase
- Government acquisition claims not reflected in public notices
Policy is usually valid until the ownership is transferred or as defined in the contract.
2. Lender’s Title Insurance Policy
Issued in favor of banks or financial institutions that lend against the industrial property. It covers:
- Losses due to invalid or unenforceable mortgage
- Priority disputes over charge or lien on the land
- Loss of security interest due to undisclosed encumbrances
- Challenges to mortgagor’s legal ownership
- Cost of defending the lender’s rights in litigation
Coverage remains effective until the loan is repaid in full.
3. Coverage Limits and Scope
- Policy value is generally equal to the purchase price or loan amount
- Premium is paid as a one-time fee at the time of policy issuance
- Legal defense costs, compensation for financial loss, and settlement charges are included
- Some policies may offer endorsement for leasehold interests, access rights, and zoning compliance