Limitation on Defense – 4
An insurer’s Special Fraud Investigation Unit (SIU) should be trained to thoroughly, fairly, and intelligently investigate every potentially fraudulent claim. The claims department must likewise be trained to investigate every claim where a question of coverage exists. The investigation must be well documented and the decision to deny must be made in good faith with the advice and counsel of an experienced coverage lawyer. If the investigation is thorough, in good faith, and survives the analysis of experienced counsel the reasonable dispute doctrine should defeat any suit for bad faith.
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