A policy that protects against title defects is known as:

A policy that protects against title defects is accurately identified as a Title Insurance Policy. This type of insurance is specifically designed to cover losses that may arise due to issues related to the title of a property. These issues can include things like undisclosed liens, ownership disputes, or errors in public records, all of which could negatively affect a buyer's ownership rights.

The purpose of a Title Insurance Policy is to provide peace of mind to property owners and lenders by ensuring that, should any title issues arise after purchase, the insured party will be protected against financial loss. This is distinct from other types of insurance policies that cover different aspects of property ownership or liability.

For instance, a Contract Policy typically relates to obligations and agreements between parties, while a Liability Policy focuses on protection against legal liabilities that might arise from injuries or damages related to a property. A Property Insurance Policy generally protects physical structures from damage caused by various risks, such as fire, theft, or vandalism, rather than title-related concerns. Understanding these distinctions reinforces why a Title Insurance Policy is the correct choice in this context.