I can only speak for myself on this.
I would offer the purchasers to have the puppy back & maybe replace it with a different puppy, or a refund, or maybe even a puppy from a future litter.
By the time these things are discovered, though, the puppy has become part of the family & they probably don't want to part with it.
So I would hope that in this case the insurance would cover the veterinary costs.
All my puppies go to their new homes with 6 weeks insurance cover.