USA – FLORIDA Trends and Developments Contributed by: John David Dickenson, Nicole Connors and Juan Garrido, Cozen O’Connor
Pursuant to the new subsection, if the jury finds bad faith on the part of the insured or its representatives, the jury may reduce the amount of damages awarded against the insurer. That is exactly what happened in Tran . Although the jury found against the insurer, the jury also substan- tially reduced the award to the insured as a result of a 40% finding of bad faith against the plaintiff and her representatives. It is the authors’ understanding that, at the time this article is being written, the court in Tran has denied Tran’s attempts to set aside the comparative bad faith finding against her and her rep- resentatives. The Baker and Tran cases demonstrate that the reforms are having a real impact on the manner in which insurance litigation is conducted in Florida. Safe Harbour Statutes Florida’s HB 837 amended Florida’s bad faith statute, Fla. Stat. 624.155, by creating a 90-day safe harbour for insurers to investigate liability bad faith claims under 624.155 (4) and establishing options for insurers to resolve competing third-party claims arising from a single occurrence that may exceed available policy limits under 624.155 (6). Although both provisions afford insurers 90 days to act, insurers must be mind- ful of the different triggering events and evidentiary standards applicable to each statute. Relevance of the 90-day safe harbour to investigate liability claims Another significant reform was the amendment to Fla. Stat. 624.155 to include, for the first time, a safe har- bour to protect insurers from a finding of bad faith liability. Specifically, Fla. Stat. 624.155 (4), provides that “[a]n action for bad faith involving a liability insur- ance claim, including any such action brought under the common law, shall not lie if the insurer tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of a claim which is accompanied by sufficient evidence to support the amount of the claim” (624.155 (4)(a), Fla. Stat. (2023)). A consequential feature of this statute is its express reach over statutory and common law bad faith claims.
This is significant because, before HB 837, the Florida Supreme Court had held in Macola v Gov ’ t Emps . Ins . Co ., 953 So. 2d 451 (Fla. 2006), that an insurer’s ten- der of policy limits after a Civil Remedy Notice (CRN) was filed did not eliminate the underlying common law cause of action for bad faith failure to settle within policy limits. However, 624.155 (4)(a) codified a bright line rule that bars statutory and common law bad faith claims if the insurer tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of a claim. The safe harbour is triggered by the insurer’s receipt of actual notice of a claim, accompanied by sufficient evidence to support the amount of the claim. This lan- guage introduces a factual inquiry into what consti- tutes sufficient evidence. The statute does not define the term, and there are no decisions on what consti- tutes “sufficient evidence”. This creates a potential area for future litigation. Finally, in Priola v Progressive Select Insurance Com- pany , 2026 WL 628286 (M.D. Fla. Mar. 6, 2026), the court held that 624.155 (4)(a) applies to bad faith suits that accrue after HB 837’s effective date, even if the accident occurred and the policy was issued before the effective date. When does an insurer receive notice of competing claims? Florida’s tort reform also added a 90-day safe har- bour for carriers in claims involving multiple third party claimants. Section 624.155 (6), provides, in pertinent part: “[I]f two or more third-party claimants have competing claims arising out of a single occurrence… an insurer is not liable beyond the available policy limits… if, within 90 days after receiving notice of the competing claims in excess of the available policy limits… (a) the insurer files an interpleader action under the Florida Rules of Civil Procedure. If the claims of the compet- ing third-party claimants are found to be in excess of the policy limits, the third-party claimants are entitled to a prorated share of the policy limits as determined by the trier of fact”.
315 I NSURANCE L I T IGATI O N 2026
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