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Guide to Florida Bad Faith Lawsuits Your rights

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Cristina M. Pierson Business trial laWYer, KelleY | uustal

Guide to Florida Insurance Bad Faith Lawsuits

Your rights as a Florida insurance policyholder

Cristina M. Pierson BUSINESS TRIAL LAWYER, KELLEY | UUSTAL Guide to Florida Insurance Bad Faith Lawsuits: Your Rights as a Florida Insurance Policyholder is published by Sutton Hart Press llc Vancouver, Washington

Inquiries: [email protected] Website: www.suttonhart.com Author Website: www.kelleyuustal.com First Printing: August, 2020 Copyright 2020 by Cristina M. Pierson and Sutton Hart Press llc All rights reserved

Media and Reviewer Contact: [email protected] Cover Design: Jason Enterline Copy Editor: Rylann Watts Layout Design: Jason Enterline

No part of this publication may be reproduced, stored in a retrieval system, or transmitted by any means elec- tronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Your support of the author’s rights is appreciated. Guide to Florida Insurance Bad Faith Lawsuits

Your rights as a Florida insurance policyholder Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

About This Guide

Has an insurance company underpaid, delayed, or denied your policy benefits? You may have the right to file a claim for financial compensation. In order to maximize this compensation, it is important to understand (1) your rights as a Florida policyholder, (2) the Florida insurance bad faith claims process, and (3) your options under the .

A quick and easy reference for:

• Federal and Florida insurance law • Detecting insurance bad faith misconduct • Strategies for securing your policy benefits • Steps to maximize your financial compensation

Disclaimer

This e-Book is for general informational purposes only and is neither intended as, nor should it be considered, legal advice. Your reading or downloading of this e-Book does not create and attorney- client relationship with our firm which can only be done after speaking with Cristina M. Pierson and both parties signing a written engagement letter. For more information on working with Ms. Pierson, visit: www.kelleyuustal.com or Call Us 954.522.6601.

4 Cristina M. Pierson

About The Author - Cristina M. Pierson

Prominent trial attorney and business litigation specialist with one of Florida’s leading litigation law firms, Cristina M. Pierson is dedicated to handling some of the country’s most challenging insurance coverage, breach of , and bad faith claims on behalf of wronged policyholders. In that regard, board certified specialist Cristina applies her legal acumen, broad experience, and elite investigative resources to enable policyholders to maximize their rightful insurance benefits through cases brought in both state and federal court.

5 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

Table of Contents

Legal Rights of Florida Policyholders...... 7 What is Insurance Bad Faith?...... 8 First-Party Versus Third-Party Claims...... 8 Bad Faith Claims...... 10 Statutory Bad Faith Claims...... 10 Top 10 Warning Signs of Insurance Bad Faith...... 12 How to Win a Florida Bad Faith Insurance Claim ...... 16 60-Day Notice...... 17 Preparing your case...... 17 Available Damages in Florida Bad Faith Claims...... 19 COVID-19 Exclusions...... 22 COVID-19 Business Interruption Compensation...... 23 Selecting a Qualified Insurance Lawyer ...... 24

6 Cristina M. Pierson

Insurance intends to assure the policyholder that they are covered in the event of an accident, illness, natural disaster, or other sudden misfortune. Unfortunately, the insurance we spend our hard-earned dollars on does not always come through when we need it.

Either intentionally or unintentionally, insurance companies may deny perfectly valid insurance claims. Policy terms and language can be misinterpreted and exclusions can be misapplied. They may ask the policyholder to jump through difficult hoops to process a claim. They may also delay payments for unacceptable periods of time or refuse to defend a policyholder in a third-party lawsuit. It’s entirely possible that they will conduct sloppy, incomplete investigations.

Most policyholders aren’t experts in insurance law. Many simply accept the insurer’s word that their claim isn’t valid. Those who suspect their denied claim was valid may not know how to challenge the insurance company – or lack the resources to do so. In these cases, the policyholder is left feeling helpless and debilitated - while the insurance company escapes its responsibilities.

Because of the uneven playing field, and the profound distress that insurer misconduct can cause policyholders and their families, Florida law requires that insurers act in when evaluating a claim’s validity. This gives policyholders the right to sue insurance companies acting in bad faith. Fighting back pays off. When a Florida policyholder can prove bad faith, the court may award financial compensation above the original claim amount or policy limit.

However, proving an insurance company has acted in bad faith is difficult. Policyholders find themselves battling high-power defense teams who defeat claims like these all the time. But winning your insurance dispute IS possible. Understanding your rights as a Florida policyholder, knowing how to spot bad faith activity, and pinpointing strategies to maximize your financial compensation are all important first steps.

Questions About Disputing the Results of your Insurance Claim? Contact Cristina Pierson at 954.522.6601 or visit www.kelleyuustal.com

Legal Rights of Florida Policyholders

When you sign up for insurance, you enter into a contract – an agreement that you will make premium payments according to a certain schedule, and that the insurer will pay the agreed benefits in the event of a covered claim. As a party to this contract, policyholders are granted certain legal rights.

7 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

In general, insurance companies are required by law to:

• Promptly and honestly communicate with policyholders during claim processing • Promptly and thoroughly investigate, process, and pay policy benefits in good faith, and • Clearly and truthfully communicate the basis for claim decisions.

These legal duties arise out of various areas of Florida law, including both common law and statute.

What is Insurance Bad Faith?

Te concepts of “good faith” and “bad faith” arise largely out of common law. Florida contract law includes the common law implied covenant of good faith and fair dealing,1 “to protect the reasonable expectations of the contracting parties.”2 This means that insurers must act honestly and fairly in settling a claim with regard for the insured party’s interests.

Under common law, insurers have a duty of good faith, meaning insurance companies must handle claims with “the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business.”3 It is “a duty to their insureds to refrain from acting solely on the basis of their own interest in settlement.”4

Acting with good faith and fair dealing includes promptly investigating potentially covered claims, promptly paying claims for covered risks, making reasonable settlement offers, and defending insured parties against third-party claims.

When an insurer breaches its duty of good faith, the policyholder has the right to pursue what we call a “bad faith” claim against the insurer. The Florida courts recognize two types of insurance bad faith claims: first-party claims and third-party claims.

First-Party Versus Third-Party Claims

First-party insurance refers to policies purchased to cover losses or damage to people or property where the claim is filed by the policy owner. Examples of first-party insurance include automobile or

1 Sepe v. City of Safety Harbor, 761 So. 2d 1182 (Fla. 2d DCA 2000). 2 Cox v. CSX Intermodal, Inc., 732 So. 2d 1092 (Fla. 1st DCA 1999). 3 Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783 (Fla. 1980). 4 State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55 (Fla. 1995).

8 Cristina M. Pierson homeowner’s insurance policies. In a first-party claim, the policyholder files a claim for benefits with its own insurance company.

For example, say your homeowner’s insurance policy includes storm damage coverage. This coverage helps pay your damages if high winds, hail, or rain damages your home. According to your policy, your storm coverage limit is $500,000. One day a nasty storm damages your garage. Your total damages are estimated at around $250,000. Fine, right? Your insurance policy agrees to pay up to $500,000.

Months go by without seeing a penny. The insurance company keeps asking you to fill out more forms, send more receipts for repairs, and send more photos of the damage. Eventually, the insurance company contacts you and says your claim has been denied. At this point, you may consider filing a first-party bad faith claim against your insurance company for breaching your contract and acting in bad faith.

Unlike first-party insurance, third-party insurance helps out the policyholder if someone else seeks damages or sues them for causing losses or damage to them. Third-party policies include auto , commercial liability insurance, and professional liability insurance (malpractice). Like first- party insurance, third-party insurance pays the injured party. However, the injured party is not typically the policyholder, but is instead a third party.

A third-party bad faith claim may arise because your insurer refuses to pay a valid claim brought by an injured third-party – leaving you vulnerable to major personal lawsuits. In these cases, you may have a bad faith cause of action against the insurer.

For example, say your auto insurance includes $250,000 of bodily injury liability. Rushing to work, you accidentally run a red light and injure another driver named Bob. Bob suffers damages amounting to $800,000. Bob’s legal team contacts your insurer and asks for the policy limits of $250,000 as the settlement amount. Sounds more than fair, right? Acting in good faith, your insurance company agrees and pays the $250,000.

However, an insurer acting in bad faith might not be willing to pay the $250,000. After all, that is a lot of money and they want to try to reduce the amount. If your insurer refuses to pay the claim and denies the settlement, Bob could take you to court for the full $800,000. Once the court has established the amount of damages ($800,000) and your liability, Bob can file a third-party bad faith lawsuit against your insurance company to collect on Bob’s unpaid balance in excess of the policy limit.

9 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

Common Law Bad Faith Claims

The common law cause of action applies only to third-party bad faith.5 In third-party common law bad faith claims, an insurer that breaches the duty of good faith may be liable for the total amount awarded against the policyholder, including an amount in excess of the policy limits. To be liable for bad faith in a common law third-party claim, the insurer must have caused the excess judgment against the policyholder.

A third-party common law bad faith claim may lead to the following:

• The insurer paid more than it would have without the alleged bad faith activity. • The policyholder agreed to an excess judgment, and the injured third-party-only agreed to col- lect payment from the insurance company. • The injured third party got a judgment against the policyholder for an amount in excess of policy limits.

Under common law, the insurer does not owe a duty of good faith to the injured third party. It only owes a duty of good faith to the policyholder. Only by proving that the insurer breached its duty of good faith to the policyholder can the insurer be held liable for excess judgment against the policyholder.

Statutory Bad Faith Claims

Originally, only third-parties could file bad faith insurance claims. That is because Florida’s first-party policyholders didn’t have a cause of action against bad faith insurers until 1982, when Florida’s lawmakers enacted a Civil Remedy Statute (CRS)6 that authorizes both first-party and third-party bad faith actions against insurers.

Today, the majority of bad faith claims - both first-and third-party - are handled using statutory law.

Florida’s Civil Remedy Statute states that “any person may bring a civil action against an insurer when such person is damaged…by the commission of any of the following acts by the insurer:

• Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests;

5 Time Ins. Co., Inc. v. Burger, 712 So. 2d 389 (Fla. 1998). 6 Fla. Stat. § 624.155.

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• Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; or • Except as to liability coverages, failing to promptly settle claims, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.” • Both the CRS7 and Florida’s Unfair Insurance Trade Practices Act8 list several “unfair claims practices” that may constitute insurer bad faith and for which first- and third-party policyhold- ers can sue for damages.

These unfair claims practices include:

• Attempting to settle a claim based on an application that has been altered without notice to, knowledge, or consent of the insured • Making misrepresentations of fact to the policyholder with the intent to settle the claim on less favorable terms than the policy provides for • Failing to adopt and implement proper claim investigation standards • Misrepresenting pertinent facts or policy provisions relating to coverage • Failing to acknowledge and act promptly upon communications concerning the claims • Denying claims without conducting reasonable investigations based upon available information • Failing to affirm or deny full or partial coverage of claims (and extent of partial coverage) • Failing to provide a written statement that the claim is being investigated upon the written request of the insured within 30 days after completion of proof-of-loss statements • Failing to promptly provide a reasonable explanation in writing to the insured for denial of a claim or the offer of a settlement • Failing to promptly notify the insured of any additional information necessary for the process- ing of a claim • Failing to clearly explain the nature of the requested information and the reasons why such information is necessary

Violations of the Florida CSA or Florida Unfair Insurance Trade Practices Act can serve as grounds for an insurance bad faith lawsuit by both first- and third-party claimants.

Note that, because third-party policyholders now have two ways to assert a bad faith claim in Florida – the common law or statutory pathway - they must choose which remedy they wish to pursue.9 An experienced insurance bad faith lawyer will be able to advise the best path for your specific circumstances.

7 Fla. Stat. § 624.155(1)(a)(1). 8 Fla. Stat. § 626.9541(i). 9 Fla. Stat. § 624.155(8).

11 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

If you feel that your insurance company has acted in bad faith or otherwise breached your contract, don’t hesitate to contact a Florida insurance bad faith attorney. There are top attorneys in this area willing to conduct initial consultations about your case free of charge.

Is Your Insurance Company Delaying or Refusing Payments? Contact Cristina M. Pierson at 954-522-6601 or visit www.kelleyuustal.com

Top 10 Warning Signs of Insurance Bad Faith

Spotting insurance company misconduct isn’t easy. Insurance companies deliberately scatter unfamiliar legal terms, vague provisions, and elusive exceptions throughout insurance policies, allowing them to take advantage of policyholders, delay payments, and deny coverage.

If you have experienced one or more of these top 10 warning signs, your insurance company may be acting in bad faith:

#1. Insurance Company Takes A Long Time to Investigate Your Claim

A hailstorm blows through your neighborhood. The softball-sized hail breaks out the skylight in your kitchen. Fortunately, you have storm coverage. You contact your homeowner’s insurance company immediately to file a claim. Three weeks pass, and no one has come to assess the damage or evaluate necessary repairs. When the insurer finally appears, he takes a few notes and a quick photo of the kitchen. Doesn’t the insurer need more information to provide proper coverage?

In general, an insurer should begin investigating a claim within 10 days of receiving proof of loss statements - unless policy terms say otherwise. Property damage cases require a prompt and thorough investigation to collect the required evidence needed to estimate the damage. If your insurer takes more than two weeks to initiate an investigation of your claim, document the delays and contact an insurance bad faith attorney to ask if such a delay is acceptable in your particular case.

#2. Insurance Adjustor Needs More Paperwork

The water heater downstairs sprung a leak and flooded the dining room. You turn off the water, mop up what you can, and phone your insurance company to file a claim. Per their request, you send in a

12 Cristina M. Pierson complete preliminary claim report – including photos of the leak, wet carpet, and damaged furniture. Two weeks later, your adjustor calls asking for more detailed photos, furniture receipts, and even more paperwork and forms without reasonable explanation.

While your insurance company will need certain information to process your claim, they are ultimately responsible for investigating the damage and compiling the evidence. Delaying your claim for payment by unfairly requesting duplicate paperwork or excessive proof of damage may be a sign the insurer is acting in bad faith. Even if the insurance company tells you the excessive document requests are “business as usual,” this is a cause for concern.

#3. You Don’t Understand Why Your Claim Was Denied

You are no insurance expert, but you feel like you understand what your policy covers and what it doesn’t, and you’ve never missed a payment. According to your plan, the damage to your car should be covered; however your insurance company explains that some “exceptional circumstances” were involved in your case, and the damage to your vehicle does not qualify for coverage.

Nowhere in your policy can you find why your car damage would be excluded. This is a warning sign of possible bad faith activity. Your insurer must be able to show you why you aren’t covered. Remember, they may try to point you to some vague language in the policy to explain why you were denied. But ambiguous language in insurance must be interpreted to favor the policyholder. Don’t just accept what they tell you. If you don’t understand why your benefits were denied, ask an experienced insurance bad faith lawyer to examine your policy and determine whether you are eligible for coverage.

#4. Insurance Representatives Won’t Answer Your Questions

Florida insurers have a legal duty to communicate with their policyholders. Of course, insurance representatives must deal with numerous clients and claims at once, so your insurer may take a few days to call you back or answer your questions. However, no paying policyholder should have to go weeks without a reply. In general, insurers should provide informed responses to a policyholder’s questions within 14 days.

Your insurer has a duty to communicate with you regarding claims, to make reasonably prompt decisions on claims, and to explain the reasoning behind their decisions. Sidestepping a policyholder’s questions is an effective means of delaying payments. If you are concerned about poor communication with your insurer, speak with an experienced insurance bad faith attorney.

13 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

#5. Insurer Offers You A Low Claim Amount

After months of recovery, you are now free to go home from the hospital. While your injuries mean you can’t go back to work anytime soon, your insurance policy should cover your medical expenses, lost wages, and loss of earning capacity. Later, you are shocked to learn of your insurer’s low assessment of your claim. The proposed payment amount is not even half of what you expected.

You delivered a detailed summary of your expenses, including medical records, billing information, and doctor opinions on your case. You also disputed their conclusions and demanded payment for additional benefits – one that you feel is fair according to your policy and the circumstances of your case. But your insurer refuses saying you don’t qualify for complete coverage because you contributed to the accident. You know this is not the case, and that the accident was completely out of your control.

If your insurer offers an insufficient amount similar to the scenario above, this is a sign of insurance bad faith, and you may have the right to sue for damages. An experienced insurance bad faith lawyer can help you decide whether it is in your best interest to pursue a claim against your insurance company.

#6. Insurance Company Says Your Policy Was Canceled

Another way a bad faith insurer may attempt to get out of paying out benefits is to claim that you failed to renew your policy, or that your policy was canceled. However, unless you breach your contract with your insurer – by failing to make payments, putting false information in your application, or otherwise failing to meet requirements - an insurer cannot just cancel your policy without adequate notice.

For most types of insurance, the insurer must send written notice of nonrenewal or cancellation at least 45 days in advance. If your insurance company provided no advance notice of cancellation or failure to renew your policy, you may be eligible to file a claim for financial compensation due to insurer bad faith.

#7. Insurer Makes False Allegations About Your Claim

Let’s say a fire destroys your house. Luckily, everyone is okay, and you have a great homeowner’s insurance policy that will cover all hotel stays and property losses. But two weeks after the fire, your insurance adjustor calls to say the investigation on your house fire indicates you aren’t covered.

While the original fire inspector concluded an electrical problem caused the fire, the insurance company hired two other inspectors to verify the cause. One inspector agreed that it was an electrical problem,

14 Cristina M. Pierson but a second inspector says he found evidence of arson. Therefore, the fire damage isn’t covered under your policy.

This is a red flag for bad faith misconduct. Hiring multiple investigators with the obvious purpose of coming up with a way out of coverage is wrong. Insurer investigations must focus on finding evidence to approve a legitimate claim – not to discover a reason to reject a claim.

If your insurer makes strange allegations regarding your injuries or damages, they may be conducting an unfair claim investigation. An experienced insurance bad faith lawyer can help determine whether you have a claim for bad faith misconduct.

#8. Agent and Insurance Company Give You Different Information

You’ve been having trouble finding a homeowner’s policy that covers both your main house and the tiny house your mother in law lives in on your property. Zoning and foundation requirements are making things difficult. However, you may have finally found the perfect fit. You meet with an insurance agent who tells you, “This policy doesn’t say it covers tiny houses on wheels, but if you sign up today, I will add your tiny house to the policy.” You agree. He writes a memo about the tiny house coverage on your policy and hands you a copy. Great!

Six months later, severe storms blow through your neighborhood. The main house suffers just a few loose shingles. However, the tiny house and all the property within it is destroyed. You file a claim with the insurance company. Then they explain that your policy doesn’t cover tiny home structures. You bring them your copy of your policy that says “tiny house” on it, but the insurer tells you that the agent was wrong and you are out of luck.

Under Florida law, the agent’s written agreement could form the basis for an action. Making misrepresentations of fact regarding provisions, or misinterpreting terms or obligations for a policyholder can be considered bad faith misconduct. The agent has a responsibility to represent policies accurately. If the agent and insurance company disagree on your policy, seek out an attorney to ask more questions on your behalf.

#9. Insurance Company Won’t Defend You in Litigation

In bumper to bumper traffic on the way home from work, you accidentally hit the car in front of you. You and the other driver get out and inspect the damage. Both cars appear fine. The driver says he is okay, no harm done, so you exchange insurance information and head home.

15 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

Three weeks later, you get a letter in the mail notifying you that the other driver has filed a lawsuit against you. Apparently, he injured his neck during the accident and requires significant medical treatment. When you call your insurance company, they refuse to defend you in court.

In the State of Florida, insurers have a duty to defend their policyholders within policy limits - as long as the claim is potentially covered. The insurer can look into whether the claim is valid later, but they must first provide defense in litigation. An insurer’s refusal to defend a policyholder in litigation is a sign of bad faith misconduct.

#10. Insurer Says You Shouldn’t Talk to An Insurance Lawyer

Your insurance adjustor tells you that your homeowner’s policy won’t cover the hurricane damage that occurred last month. You tell her you’d like to go over the policy with your insurance lawyer and get back to her. She says that speaking with your lawyer isn’t a good idea, explaining that the insurance company knows more about your specific case and policy than any insurance lawyer, and a lawyer won’t be able to provide the right type of assistance. She might even say that if you consult with your lawyer, any possible payments will be delayed further - or denied altogether.

This behavior should set off alarm bells regarding bad faith activity. If an insurer is acting in good faith, they should be fine with having an insurance lawyer look things over. Likewise, an insurer acting in bad faith knows that an experienced insurance lawyer will discover any violations.

Suspect You Are Dealing with Insurance Bad Faith? Contact Cristina M. Pierson at 954-522-6601 or visit www.kelleyuustal.com

How to Win a Florida Bad Faith Insurance Claim

Winning a bad faith insurance claim in the State of Florida is challenging, even for practiced attorneys. Years of exposure to Florida insurance law and business litigation are required to successfully represent policyholders in cases against big insurance companies and their expensive legal defense teams.

Therefore, the first step to winning a Florida bad faith insurance claim is to contact an established Florida insurance lawyer. Initial consultations with top insurance lawyers are typically free of charge. In that first phone call or meeting, an experienced insurance lawyer will be able to determine whether your specific case indicates possible bad faith misconduct on the part of your insurer.

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60-Day Notice

Before filing a statutory bad faith claim, the insurance company must have a chance to fix the alleged misconduct. Florida law requires that the policyholder send a written notice of the claim to the Florida Department of Insurance and the insurance company 60 days prior to filing a bad faith claim.10

This written notice must include the following:

• The statutory provision, including the specific language of the statute, which the insurer alleg- edly violated. • The facts and circumstances giving rise to the violation. • The names of individuals involved in the violation. • Any specific policy language relevant to the violation. Third-party claimants should send a writ- ten request for a copy of the policy. If one is not provided, third-party claimants don’t have to reference the specific policy language. • A statement that the notice is given to perfect the right to pursue the civil remedy authorized by Fla. Stat. 624.155.

The 60-day written notice is important. The 60-day time limit to fix the problem does not begin until the written notice is deemed specific and proper. If the insurer doesn’t promptly respond to the notice, the court may automatically presume the bad faith allegations are true.11 If the insurer decides to correct the issue and pay the relevant damages after receiving notice, the bad faith lawsuit can be avoided.

Preparing your case

Finally, you’ve completed all of the preliminary work and are preparing to argue your claim of insurance bad faith. To win a bad faith insurance claim and determine the presence of bad faith, Florida courts use the “totality of the circumstances” standard.

Under this standard, the court considers several factors, including but not limited to:12,13

• Whether the insurer used the same degree of care and diligence as a reasonable person would exercise in the management of his own business. • Whether the insurer acted and made decisions with due regard for the policyholder’s interests.

10 Fla. Stat. 624.155(3)(a). 11 Imhof v. Nationwide Mut. Ins. Co., 643 So. 2d 617 (Fla. 1994). 12 Boston Old Colonial Insurance Company v. Gutierrez, 386 So. 2d 783 (Fla. 1980). 13 State Farm Mut. Auto. Ins. Co. v. LaForet, 658 So. 2d 55 (Fla. 1995).

17 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

• Whether the insurer advised the policyholder of settlement opportunities, the probable out- come of litigation, the possibility of an excess judgment, and of any steps the policyholder might take to avoid an excess judgment. • Whether the insurer investigated facts and gave fair consideration to a settlement offer reason- able to the facts. • Whether the insurer chose to settle in a case where a reasonable person faced with having to pay total recovery would settle. • Whether the insurer was negligent in investigating and evaluating a claim. • Whether the policyholder was willing to settle.14

Early on, you will want to compile information that may be useful for proving your case. You likely have much of this information already in the form of emails and texts with your insurer, letters to and from your insurer, and policy-related documents.

Keep a log of all relevant dates, times, names, and numbers related to your claim. You can take notes on paper, or record information on your phone or computer. Whatever works best for you. Gather together all repair receipts, medical bills, and documents that show when you filed the original claim, when the insurer responded, what type of investigation took place, any offers of settlement or denials. Anytime you are in contact with your insurance agent, inspectors, or others involved in your claim, document your communications along with the names, times, and dates.

An established Florida insurance lawyer will be able to gather other evidence and obtain any expert opinions required to prove your case. This may include the expert opinions of accountants, engineers, medical professionals, economists, valuation experts, or other specialized professionals vital to winning these cases.

Your legal team will prepare the necessary evidence and present your case to show the court that the insurance company violated its duty to act honestly and fairly in settling your claim, with due regard for your interests.

Questions About Your Florida Insurance Bad Faith Claim? Contact Cristina M. Pierson at 954-522-6601 or visit www.kelleyuustal.com

14 Barry v. Geico General Ins. Co. 938 So.2d 613 (Fla. 4th DCA 2006).

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Available Damages in Florida Bad Faith Claims

Bad faith insurance practices can cause devastating damage to one’s life. In addition to one’s direct injuries, an unexpected financial loss can cause mental stress, pain and suffering, even adverse health effects. Florida insurance bad faith lawsuits allow harmed parties to collect damages in excess of policy limits in some circumstances.

Breach of contract and bad faith lawsuits against your insurer could recover the following damages:

Breach of Contract Damages

• Total amount of benefits due within policy provisions (first-party claims) • Any amounts incurred up to policy limits (third-party claims) • Calculated interest on delayed benefits

Bad Faith Damages

• Consequential economic damages (reasonably foreseeable and proximately caused by unfair claims practices) • Attorneys’ fees and costs

The Florida courts may also award up to three times the amount of the compensatory damages or $500,000, whichever is greater.15 Punitive damages are awarded when the insurer’s unfair claims practices (1) occur frequently enough to be considered a general business practice and (2) are:

(a) Willful, wanton, and malicious; (b) In reckless disregard for the rights of any insured; or (c) In reckless disregard for the rights of a beneficiary under a contract.

Punitive damages help hold the insurer accountable for its actions. More importantly, they set an example for other insurance companies that the Florida courts will not tolerate bad faith activity.

In addition to breach of contract and bad faith compensation, other causes of action could mean

15 Fla. Stat. 768.73.

19 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

recovery of additional damages. A skilled Florida insurance coverage attorney will be able to identify every relevant source of recovery for your case.

We Pursue the Maximum Financial Compensation for Policyholders Contact Cristina M. Pierson at 954-522-6601 or visit www.kelleyuustal.com

COVID-19 Related Insurance Claims

In early 2020, the nation was affected by the Coronavirus Pandemic, altering consumers and businesses’ activity across the globe. On April 2, 2020, Florida Governor Ron DeSantis issued a statewide, 30-day stay-at-home order, resulting in devastating financial losses for many otherwise successful Florida businesses.

Companies that chose to take the government’s advice and shutter for several months to help prevent the spread of the virus are facing overwhelming profit losses. Those businesses that remain in service may be confronted with consumer complaints arguing the business’ failure to enforce social distancing caused them to become infected with COVID-19.

Florida tourism and hospitality companies (hotels, amusement parks, medical centers, bars, retail shops, salons, gyms, restaurants, entertainment venues) have suffered months of unexpected losses, forcing many to reduce their workforce or close down their businesses permanently. Many of these industries require uninterrupted cash flow to cover ongoing expenses and continue employing and serving the public.

Construction industry contractors have been unable to timely complete projects, potentially triggering performance bonds and payment bonds in both state and private projects – eventually resulting in costly litigation.

Business owners pay thousands of dollars in exchange for the security that business insurance policies offer. They expect to be protected when problems arise. Yet, Florida businesses are hearing every day from insurance companies that their insurance and business interruption policies won’t cover COVID- 19-related claims.

Unfortunately, in anticipation of a deluge of COVID-19 related business interruption claims, insurance companies are resorting to blanket claim denials that are not based on the specifics of individual policies.

20 Cristina M. Pierson

This is no surprise.

That said, policyholders do not have to blindly accept business interruption claim denials. Savvy Florida business owners have conferred with insurance coverage attorneys to evaluate bringing COVID-19 business interruption lawsuits and class action claims scrutinizing improper claim denials.

Because insurers face enormous stakes, they have come up with a variety of excuses for rejecting COVID-19 business interruption claims. Some insurers have consequently denied rightful COVID-19 business interruption claims, arguing that government-ordered shutdowns are outside of their coverage, that pandemic outbreaks are “uninsurable,” and that being forced to pay such claims threatens the ability to cover “legitimate” claims.

Other common arguments include: • Business interruption policy was intended to cover physical damage only • Business interruption policy was inadequately priced for infectious agent outbreaks • Such a policy would not have been provided at this rate had it covered virus pandemics

Despite the current widespread rejections of these types of claims, Florida policyholders should not automatically take the insurer’s word for it. Indeed, government-ordered shutdowns are precisely the types of events that certain business interruption insurance policies may cover. Insurance companies who refuse to pay benefits in a manner inconsistent with their policy terms may be sued for bad faith activity.

Keep in mind that to help level the playing field between insurer and policyholder, Florida law specifically favors the policyholder when a policy term is unclear or subject to multiple meanings. Any ambiguity, vague language, or general blanket statements regarding coverage, intent, or exclusions within the policy are interpreted to promote coverage – a practice that gives Florida policyholders a leg up in fighting illegitimate claim denials.

Business Interruption Coverage

Florida business interruption insurance policies are helpful to defray profit losses, relocation expenses, loan payments, back employee pay, and other financial damages resulting from the inability to operate a business due to a covered event. Certainly, closures or unexpected operational complications caused by customer injury, property damage, or government action may trigger the filing of a claim. In addition to profit losses, damages related to COVID-19 may include taxes, lease payments, rent and mortgage payments, inflated advertising expenses, costs of providing electronics and equipment for employees working from home, sanitization costs, and security expenses.

21 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

Policyholders who have been denied benefits for COVID-19 related losses, whether the policy specifically mentions business interruption coverage or merely implies it, may be eligible to file a claim for benefits. If that claim is wrongfully denied, it can be escalated to a lawsuit for compensation.

For example, insurers may argue that you have suffered no property damage or direct physical loss of property and thus do not deserve business interruption or business loss benefits. However, you may be able to argue that contaminated property is “physical damage” successfully. In previous lawsuits involving microbe contamination, courts have held that a policyholder deserved benefits to cover business income and expenses due to the bacterial contamination that could render that home useless or uninhabitable.

Whether you can establish that contamination was present should not be the primary focus. Certainly, the government and general public assume the presence of the virus when demanding business shutdowns and issuing stay at home orders. Thus, the virus has impacted the property in such a way as to prevent it from being used for its intended purpose.

COVID-19 Insurance Policy Exclusions

The 2002–2004 SARS outbreak prompted the Insurance Services Office (ISO) to create a specific exclusion relating to certain bacteria or viruses, modeling these contamination exclusions after the existing environmental pollution exclusions. In 2006, ISO recognized that viruses and bacteria could cause “physical loss of or damage to” property. Today, a number of business insurance policies contain these relatively new exclusions – which serve to safeguard the insurer against enormous potential payouts such claims would cost them.

However, not all policies contain this exclusion and certain ambiguities in the language have not yet been judicially interpreted. Just because a policy contains such an exclusion DOES NOT mean the insurance company is correctly applying it or that other policy language may still provide coverage. An experienced insurance coverage attorney can assist with assessing your policyholder rights to collect insurance for COVID-19 related losses.

Even if your business insurance policy includes some type of disease exclusion, the precise language of your policy will determine whether you may be covered for COVID-19 related damages. Remember that insurance exclusions are typically interpreted narrowly and ambiguities favor the policyholder.

Civil authority clauses

Many business insurance policies also include civil-authority clauses. These clauses activate when loss

22 Cristina M. Pierson or damage results from government action preventing, impairing, or prohibiting business operations. Courts have interpreted this clause to activate when an action or order from a civil authority interrupts business resulting in financial loss. How these clauses will be interpreted by the courts in the context of COVID-19 related claims will certainly be a hot topic in many pending insurance coverage lawsuits.

Class Action Cases

Florida policyholders may file or join class action cases against insurers who have denied coverage improperly regarding business interruption losses in a blanket fashion. Note that if a class action case has been filed against your insurer, you can still file an individual action against that insurer to collect compensation or participate in any relief ultimately awarded to the class members.

COVID-19 Business Interruption Compensation

COVID-19 business interruption lawsuits are incredibly complex, and these claims involve complicated analysis of insurance policy terms, definitions, and exclusions. If your COVID-19 business interruption claim has been denied, the vital first step is to speak to an experienced business interruption litigation lawyer. A skilled attorney will be able to examine the language in your policy, determine whether you are eligible to file a claim against your insurer, and describe the financial compensation available.

Don’t let financial concerns stop you from getting this valuable legal advice. Established business litigation attorneys are willing to review these cases free of charge and many work on contingency, which means you do not pay for legal services until and unless you win your case.

Should you choose to pursue a claim against your insurer, a skilled attorney will ensure you meet all procedural deadlines, investigate your claim and gather necessary evidence, and construct a solid, persuasive argument to support your case and maximize your compensation.

Those who have not yet filed a claim for business interruption insurance benefits are encouraged to contact a skilled business litigation attorney who can determine what COVID-19 interruption coverage should be available according to the language of the policy.

Policyholders affected financially by the COVID-19 pandemic should gather policy-related documents and business records, establishing expenses and changes in revenue to aid the investigation. It is also advisable to keep a detailed log of emails, phone calls, and other communications with your insurance company.

23 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

It is difficult to know how insurers will handle the inevitable COVID-19 claims they will face. However, policyholders who have faithfully paid premiums deserve rightful coverage. You can prepare in advance by having an experienced Florida insurance coverage attorney examine your insurance policy for interruption coverage and explain what your policy language states. Your attorney can help you create a plan to protect your interests, including ensuring your business insurer fulfills their obligations in response to a claim.

Selecting a Qualified Insurance Lawyer

Selecting the right Florida insurance coverage lawyer can mean the difference between getting the maximum possible financial compensation and suffering a significant loss of your right to compensation. Because of the complex issues relating to insurance coverage, potential procedural obstacles, and aggressive opposition, wronged policyholders need an experienced Florida business litigation lawyer with the specialized expertise, investigative resources, and extensive track record required to win these important and difficult cases.

Here are a few factors to consider in hiring an experienced Florida insurance dispute attorney:

Specialized Experience

Your insurance dispute lawyer must be fully equipped to take on the most complex of insurance bad faith, fraud, and breach of contract cases. This means being well-versed in Florida insurance law, having experience winning big cases against insurance companies, corporate entities, and government agencies, and having access to the best investigative experts in the nation to help prepare your case.

Access to Renowned Economists, CPAs, Valuation Experts

Established economists, accountants, valuation experts, and other specialized professionals are vital to winning these cases and maximizing your financial compensation. A top Florida business litigation lawyer is going to have these experts already lined up and ready to examine your case. Economists, valuation professionals, medical, and other experts are expensive. Experienced Florida business litigation attorneys know this and are prepared to pay for these services in advance.

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Industry Recognition

An experienced Florida insurance dispute lawyer will be recognized for their legal knowledge, litigation skills, and courtroom effectiveness. They will have served as lead / co-lead counsel in national and state class action and commercial litigation cases. Look for Board Certification as a Business Litigation Specialist and a high-level Martindale Hubbell AV rating.

Willingness to Proceed to Trial

Many inexperienced lawyers may simply file your case and hope the insurance company wants to settle out of court. A specialized business litigation lawyer with years of experience in insurance dispute cases is willing to seek out all responsible parties and take your claim to trial, maximizing your financial compensation.

The trial lawyers at Kelley | Uustal are renowned for success in fighting the nation’s largest insurance companies and corporations whose bad faith, fraud, or negligence has damaged lives. Decades of dedication to handling complex cases against high-power companies has allowed us to perfect our approach and protect our clients.

We take on insurance bad faith cases against companies of all sizes, including:

Zurich American Hartford Financial Willis Towers Watson Globe Life W.R. Berkley Geico Voya Everest Re Group The Travelers Companies Cincinnati Financial State Farm Chubb Prudential Financial Arthur J. Gallagher & Co. Progressive Aon Principal Financial Group American International Group MetLife American Family Marsh & McLennan Allstate Loews Aflac Lincoln National

25 Guide to Florida Insurance Bad Faith Lawsuits – Your rights as a Florida insurance policyholder

Our law firm protects the rights of all types of policyholders, including holders of auto insurance, commercial liability insurance, homeowner’s insurance, health insurance, aviation insurance, boat insurance, business owners’ insurance, and life insurance.

Questions About Your Insurance Bad Faith Claim? Contact Cristina Pierson at 954.522.6601 or Visit www.kelleyuustal.com

Protecting Florida Policyholders and Maximizing Financial Compensation

As a leading Florida civil litigation firm, Kelley | Uustal has decades of experience helping clients involved in insurance disputes that maximize their rightful financial compensation. Our unique claims preparation and litigation process helps prove what is necessary to win these cases. Because we specialize in business litigation claims, we know what evidence we need to nail down a case, and we know how to present it to judge and jury.

If you have more questions about Florida breach of contract, fraud, or bad faith insurance claims, feel free to call and speak with business litigation attorney Cristina M. Pierson or any of our Kelley | Uustal Fort Lauderdale trial lawyers at 954.522.6601 or www.kelleyuustal.com. We are happy to help and work diligently to protect your privacy.

The Kelley/Uustal law firm represents clients located in Fort Lauderdale, Miami, West Palm Beach, Hialeah, Coral Springs, Cape Coral, Port Saint Lucie, Pembroke Pines, Marathon, Key Largo, Miramar, Coral Springs, Pompano Beach, and across the state of Florida.

CRISTINA M. PIERSON EXPERIENCED, AGGRESSIVE FLORIDA BUSINESS LITIGATOR CONSUMER PROTECTION ADVOCATE ALL FEDERAL AND FLORIDA COURTS

Fort Lauderdale, Florida 954.522.6601 www.kelleyuustal.com

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