That would be a question for your underwriter.  On most owner's policies, the mechanic's lien exception is standard.  In some circumstances, it can be removed but your underwriter probably has very specific requirements before this can be done.  Many of the issues that can cause losses related to mechanic's liens could be outside the scope of the agency agreement, and the agent could wind up liable for them.  Thus, it is very important to follow your underwriter's guidelines.  I would certainly call my underwriter and get approval before I removed the exception.

Around here, owner's policies are very rare.  Up here, the buyer pays for the policy if they want coverage - unlike some areas where it is customary for the seller to pay for the buyer's policy.  Many Realtors unwisely advise their buyer's that they do not need an owner's policy because the bank is getting one.  (Don't get me started on that one.)  Thus, the situation doesn't arise much for me and I have never had a buyer ask for the exception to be removed.

Best,
Robert A. Franco
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