An insurance policy which insures you against errors in the title search, essentially guaranteeing your and your lender's financial interest in the property.

The title insurance company conducts an extensive search of the records of the property you are buying. If they find any liens or other encubrances they will alert you before you buy the property. If they do not find any encumbrances against the property, they will issue an insurance policy, which guarantees that you are buying a "clean" property with no liens or other encumbrances against it.