No risk to the insurer title policy. It’s a pretty good gig if you can get (away with) it, title insurance with a blanket exception costs the same as title insurance that might cover something.
Tom Larson, VP of Legal and Public Affairs for the Wisconsin Realtors Association reports in the August 2014 Edition of the Wisconsin Real Estate Magazine a ban on Blanket Exceptions in Title Insurance.
The kind of blanket exception we see in Title Insurance Policies effectively limit the liability of the Insurance Company and leave the property owners and lenders at risk. The blanket exception is vague enough to leave the coverage open to interpretation of the attorneys representing the title company and the folks who though they had insurance.