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Court Decision| BREAKING: PROPOSED AMENDMENT TO FLORIDA STATUTES CREATES RIGHT OF CONTRIBUTION FOR DEFENSE COSTS

The Florida Legislature recently created a new cause of action for contribution among co-primary liability insurers.  Under this new law, a liability insurer who defends an insured may file suit against other insurers asserting a right of contribution for defense costs.  

This amendment (creating Florida Statute 624.1055) first appeared as an addition to House Bill 301 proposed by Representative Santiago on March 27, 2019.  According to the Florida House of Representatives Staff Analysis, the amendment was designed to address legislative concerns regarding a “waiting game” when multiple co-primary insurers have potential defense obligations due to the current absence of a right of contribution among co-primary insurers at common law.  See Continental Cas. Co. v. United Pacific Ins. Com., 637 So. 2d 270 (Fla. 5th DCA 1994).

This new cause of action will be available to admitted and surplus lines liability insurers, but not to motor vehicle liability or medical professional liability insurers.  It applies to insurance policies issued within the State of Florida and whenever the underlying claim is filed within the State of Florida.  The bill specifies that defense costs shall be allocated in accordance with the terms of the insurance policies, but also states that the court has discretion to use equitable factors as it deems appropriate in making an appropriate allocation.  A non-defending insurer need not contribute to defense costs incurred prior to the insurer’s receipt of notice of the claim or suit.

If the bill is signed into law, the statutory right of contribution will be available with respect to actions initiated on or after January 1, 2020.

For further inquiries, please contact Kimberly Ramey, Fay Ryan or Kathy Maus from our Third-Party Coverage Group.

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