What legal principle bars an insurance company from using certain defenses if it previously condoned the insured's actions?

The principle that prevents an insurance company from asserting certain defenses after it has previously accepted or condoned the insured's actions is known as estoppel. This legal doctrine arises when a party has acted in a way that leads another party to reasonably rely on that conduct, thereby creating a binding obligation on the first party. In the context of insurance, if an insurer has been aware of specific actions taken by the insured and has not objected to or acted upon them, it may be estopped from later disputing those actions or denying coverage based on them.

Understanding estoppel is critical in insurance practice because it serves to uphold fairness and prevent unjust results. If an insurer fails to take timely action to defend its rights when it has knowledge of pertinent facts, it risks losing the opportunity to later assert those rights. This principle ensures that the insured can rely on the insurer's conduct and avoid potential surprises or unjust treatment regarding coverage claims.

The other options, such as indemnity, waiver, and authority, represent different legal concepts that do not directly relate to this specific situation where prior acceptance influences the ability to assert defenses. Indemnity refers to compensation for losses, waiver involves the voluntary relinquishment of a known right, and authority pertains to the power or right