Limitation on Defense – 5
In Century Surety Co. v. Polisso, 139 Cal. App.4th 922, 43 Cal. Rptr.3d 468 (2006) the California Court of Appeal found that the Genuine Dispute Doctrine “holds that an insurer does not act in bad faith when it mistakenly withholds policy benefits, if the mistake is reasonable or is based on a legitimate dispute as to the insurer’s liability.” The analysis of the applicability of the Genuine Dispute Doctrine is based upon an analysis of “the insurer’s actions and decision … [as they] were made rather than with the benefit of hindsight.”
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