In Century Surety Co. v. Polisso (2006) 139 Cal.App.4th 922, the insurer sued its insured, seeking a declaratory judgment that its liability policy provided no coverage for damages suffered by the insured. The insured and his wife (the Polissos) cross-complained for breach of contract, breach of the implied covenant of good faith and fair dealing, and malicious prosecution. (Id. at pp. 930, 936.) Despite knowing that it had a duty to defend its insured, "Century engaged in a course of conduct over a five year period of time that was designed to avoid paying the insurance benefits covered by the policy." (Id. at p. 965.) The Court of Appeal upheld a jury award of $622,911 in compensatory tort damages and $2,015,000 in punitive damages, a ratio of 3.2 to 1, which the court opined was "well within the constitutional limit." (Id. at p. 966.) The court concluded that "although the compensatory damages were substantial, this ratio is warranted given the reprehensibility of the insurer's conduct. (Ibid.) "Century's conduct caused both severe economic and emotional harm, leading to physical symptoms. Century's bad faith denial of policy benefits impaired the Polissos' ability to manage their business, contributed to the loss of their credit, their lease, much of their business, and their decision to file for bankruptcy." (Id. at p. 964.) "Century acted with reckless indifference to the Polissos' health and peace of mind. . . . The Polissos were financially vulnerable and Century exploited that knowledge for five years in order to force the Polissos to dismiss their affirmative counter-claims against it and allow Century to take over their defense in a third party action against plaintiffs'." (Id. at p. 965.) Century argued that a "comparable civil sanction" was provided by Insurance Code section 790.035, imposing a maximum fine of $10,000 for each willful act of misconduct by an insurance company. The appellate court disagreed, stating the provision was "not particularly useful" where the insurer had "engaged in a course of conduct over a five-year period that involved many prohibited acts . . . ." (Century Surety Co., supra, 139 Cal.App.4th at p. 967.) The parties stipulated that Century's net worth was approximately $57 million. The court observed that the punitive award was only 3.2 percent of Century's net worth and that a "smaller award would not amount to much more than a slap on the wrist. " (Id. at p. 967.) Summarizing, the appellate court stated: "We have found Century engaged in misconduct over an extended period of time that was moderately high on the reprehensibility scale while the punitive damage award is less than four times the amount of the compensatory damage award. We therefore find the award reasonably achieves the state's interests in retribution and deterrence without being grossly excessive." (Ibid.) In affirming a punitive damages award of 3.2 times compensatory tort damages, Century was not required to fix the point at which an award would have become excessive. However, in finding that an award less than four times the amount of compensatory damages reasonably achieved the state's interests in retribution and deterrence, without being grossly excessive, we believe the court indicated that a ratio of more than four to one likely would have been excessive in the circumstances. In Century Surety Co. v. Polisso (2006) the court had before it the argument that the doctrine applied in third party duty to defend cases (id. at p. 949) but concluded that the insurer could not demonstrate a basis for its application in that case. Because a potential for coverage under the policy issued by Century Surety was reflected by the allegations of the complaint and extrinsic facts known to the insurer, "there was no legitimate dispute" as to Century Surety's duty to provide a defense. (Id. at p. 952.)