We show that exceptional-point (EP) sensors are fundamentally limited by excess noise owing to eigenmode nonorthogonality, to the extent that the enhancement in precision (the magnitude of the scale-factor enhancement divided by the square-root of the linewidth-enhancement factor 1/2 | | / SK ) is never greater than unity. Indeed, in the vicinity of an EP a hole of reduced precision opens up in parameter space, where the precision drops rapidly to zero within regions of deadband or unbroken PT-symmetry. Outside of these zero-sensitivity regions the precision is nonzero, approaching its maximum value of1 SK at the EP. EPs, therefore, represent discontinuous transitions between these two regimes. We find that this behavior is universal, with the hole appearing regardless of the type of EP. Therefore, EPs should generally be avoided for sensors that utilize laser cavities. Moreover, we illustrate that a laser containing a medium at the critical anomalous dispersion is simply operating at an EP. Therefore, this limitation also applies to laser sensors based on fast light.