What does your contract say?
Usually there should be some provision.
Not sure what your agreement is, but in a mortgage situation, a lender probably couldn't foreclose on the property, however they would have the right to force-place coverage on the home and bill the buyer. Typically forced-coverage is way more expensive than coverage that you pick on your own, so that is usually a deterrent
You don't want coverage lapsing for even a day, because if something happens then you might be up $hit's creek. So time is of the essence to contact the buyer and, if necessary, take action to get it insured.