I couldn't say for sure, but it is an interesting question. 

First, if it is covered, you are lucky.  Like Diane, I was under the impression that most of those survey issues were not covered. 

Second, I'd guess that if you are sued by the neighbor, the title insurer would be obligated to provide a defense or settle (at their option), assuming that it is covered.  If you would lose the case, what would your damages be?  Are there any structures on the disputed property (i.e. garage, shed, deck, fence)? I think the proper measure of damages would be the value of your land with the disputed property and the value of your land without the disputed property.  Most of the time, that would be probably be negligible, but I suppose it depends on how sever the survey error was.

Of course, I'm an agent and I don't have any idea how the attorneys handle claims like that.  You will have to let us know what happens.  And good luck with everything - I hope it isn't too large of a problem.

Best,
Robert A. Franco
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