The basis of the title insurance industry is insuring the validity and priority of written documents. A typical real estate transaction involves several layers of written instruments: the sales contract, deed, mortgage, and closing statement. Because a title insurance policy insures the validity and priority of documents such as deeds and mortgages that are executed by individuals on behalf of entities, it is important that a title agent and escrow officer understand who has the power to bind a business entity and who can execute these documents on behalf of business entities in order to have an insurable transaction. These materials address the main types of business entities that you will see involved in real estate transactions and the issues raised by each different type of entity.
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