How does title insurance affect the seller who had no title insurance?

A seller with no title insurance:

If a person has offered their property for sale and accepted an offer to purchase generally the intelligent buyer's attorney will have the title to the property examined by a professional title examiner. If the title exam reveals a defect in the title and the seller was not covered by a title insurance policy then the seller must pay to have the defect resolved. Title defects can be very costly to resolve.

Generally, if the seller chooses not to have the defect resolved the buyer can back out of the sale and get their deposit back. However, the seller has been put on notice regarding the defect.

The new owner's title insurance:

The new title insurance does NOT affect the seller in any way. Coverage is given only to the new owner under the Owner's Policy. If the seller cannot clear the defects and the buyer still wants to purchase the property, the issuing Title Agency has the option of insuring the title, but excepting the defects from coverage to the new owner. Thereby, the risk is assumed by the buyer, not by the Title Agency.