Which action might negate an insurer's ability to assert a defense against an insured?

The concept of estoppel plays a crucial role in the insurance context, particularly in scenarios involving defenses asserted by an insurer against an insured. When an insurer engages in behavior that leads an insured to reasonably rely on certain actions, statements, or omissions by the insurer, often to the detriment of the insured, estoppel may come into play. If it can be demonstrated that the insurer's conduct caused the insured to forfeit their rights or make decisions based on that conduct, the insurer may be precluded from later asserting defenses contrary to their earlier behavior.

For instance, if an insurer initially indicates coverage for a claim but later tries to deny that coverage based on a specific defense, estoppel can prevent them from effectively asserting that defense. This serves to protect the insured from unfair surprises and ensures that they can trust the representations made by the insurer.

Understanding the implications of estoppel helps to clarify why it could negate an insurer's defenses, creating a stable relationship between insurers and insureds grounded in fairness and reliance.