Section 624.1055, Florida Statutes, is part of the recent Omnibus Insurance Bill, HB 301: Contribution Rights Among Insurance Carriers. This new legislation impacts those involved in Florida construction defection litigation and applies to claims, suits or other actions initiated after January 1, 2020.
Old Rule – No Right of Contribution
The longstanding rule in Florida has been that there is no right of contribution among insurance carriers for attorney fees incurred in defending a mutual insured. The rationale has historically been that each carrier owes a complete and independent obligation to provide a defense under the insuring policy, such that, by issuing the policy, the carrier did so without contemplation that it would be entitled to recover payment from another carrier for such defense costs. The Florida Supreme Court described the rationale for the current rule in the case of Argonaut Ins. Co. v. Maryland Cas. Co., 372 So.2d 960, 964 (Fla. 1979), as follows:
The Legislature has not seen fit to allow contribution for costs or attorney’s fees between insurance companies. If contribution for costs were allowed between insurance companies, there would be multiple claims and law suits. The insurance companies would have no incentive to settle and protect the interest of the insured, since another law suit would be forthcoming to resolve the coverage dispute between the insurance companies. This is contrary to public policy, particularly since the insured has been afforded legal protection and has not had to personally pay any attorney’s fees.”
New Legislation and Impact
Continue Reading New Legislation Impacting Florida Construction Defect Litigation