The following clauses (or similar promulgated clauses) should be included in Owner’s Policies where the policy amount exceeds the actual consideration and improvements are contemplated on the property in question:
1. “Liability hereunder at the date hereof is limited to [amount of actual consideration]. Liability shall increase as contemplated improvements are made so that any loss payable hereunder shall be limited to said sum plus the amount actually expended by the insured in improvements at the time such loss occurs. Any expenditures made for improvements subsequent to the date of this policy will be deemed made as of the date of this policy. In no event shall the liability of the Company hereunder exceed the face amount of this policy. Nothing contained in this paragraph shall be construed as limiting any exception or printed provision of this policy.”
2. “Any and all liens arising by reason of unpaid bills or claims for work performed or materials furnished in connection with improvements placed or to be placed upon the subject of land.”
Please be advised that the title commitment should contain a statement that the above items will appear on the final title policy.