Wouldn't that be unethical of the lawyers and title companies?
An ethical breach by a title insurance company likely violates its bylaws, and at the very least opens them up to liability.
It seems like this is a title error so the insurance company would be responsible. I don't see why a lawyer wouldn't report the error to the insurance company. It's billable time that the insurance company would need to pay for and they'd be working to keep their industry with clear deeds instead of faulty ones.
Also, as in any client relationship, a lawyer’s first priority is the person paying his bills, not necessarily the industry. Even if it would be better in the long run and more ethical, when someone pays you there is a natural obligation attached to the relationship.
I used to be idealistic, but experience has shown me that people do what is expedient.