CPL Letters

Closing Protection Letter (CPL)

A Closing Protection Letter (also called an "Insured Closing Letter" or "ICL") forms a contract between a Title Insurance Underwriter and a Lender, in which the underwriter agrees to indemnify the lender for actual losses caused by certain types of misconduct by the closing agent. Title Underwriters often authorize closing agents to issue these letters to Lenders when the closing agent anticipates issuing the Underwriter's title insurance policies in the transaction.

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Typical closing protection letter provisions:

CPL claims are on the rise. The CPL serves the important function of providing lenders with assurance that title agents will handle their funds and documents in an appropriate manner. However, it is important to understand that the CPL does not make the title insurance underwriter responsible for all types of errors that title agents could make. A thorough investigation of the facts of each claim, together with the careful application of the existing body of CPL law, should be used to distinguish CPL claims that should be paid from claims that should be denied.

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