How Litigation Funding and Recent Legislation in Southeastern States May Affect Liability Insurance

New laws in Southeastern states took effect this week, significantly impacting various aspects of property and casualty insurance.

In Georgia, Senate Bill 69 introduces new restrictions on third-party litigation financing, a practice that has raised concerns among insurers. Signed into law in early 2025, this bill mandates that financiers register with the state Department of Banking and Finance, providing details about their principals and any affiliations with foreign interests.

Additionally, the law prohibits funders from making legal decisions regarding attorney representation, settlements, and expert witnesses. It also requires that litigation financing agreements be disclosed during discovery, as reported by the National Law Review. You can view the bill text here.

Moreover, the legislation includes provisions that could affect auto insurers. Specifically, while the use of seat belts may be considered in lawsuits, the law states that “the failure of an occupant of a motor vehicle to wear a seat safety belt in any seat of a motor vehicle which has a seat safety belt or belts shall not be any basis for a cancellation of insurance coverage or an increase in insurance rate.”

Another significant change requires that manufacturers’ warranties for air-conditioning and heating systems be transferable to the new owner of a home. It also prohibits manufacturers from mandating that consumers register their products for the warranty to remain valid, according to news reports.

In Florida, Senate Bill 655, signed into law in April, mandates that pet insurance providers enhance their explanations of policies, coverage, and the rationale behind claims denials. The bill’s text can be found here.

Additionally, Dexter’s Law, stemming from House Bill 255, requires the Florida Department of Law Enforcement to maintain a searchable list of individuals convicted of or pleading guilty to animal cruelty. This law could facilitate the demonstration of a pattern of neglect in dog-attack lawsuits and related insurance claims.

In South Carolina, long-awaited yet controversial changes to the state’s liquor liability law took effect on January 1. Previously, state law mandated $1 million in liquor liability coverage for most bars and restaurants, a requirement that led to soaring insurance premiums and reportedly drove many establishments out of business.

The new law reduces the coverage requirement for establishments where alcohol constitutes less than 40% of total sales. It also limits liability for businesses found to be less than 50% at fault. Furthermore, the law allows establishments to lower their liquor liability coverage by requiring only an aggregate limit of $1 million, provided they cease alcohol sales at midnight, offer training to servers, and implement other measures.

For more details on this law, read here. A broader bill aimed at changes to “joint-and-several” liability failed to pass in 2025.

Topics
Lawsuits
Mergers & Acquisitions
Legislation
Liability

New laws in Southeastern states took effect this week, significantly impacting various aspects of property and casualty insurance.

In Georgia, Senate Bill 69 introduces new restrictions on third-party litigation financing, a practice that has raised concerns among insurers. Signed into law in early 2025, this bill mandates that financiers register with the state Department of Banking and Finance, providing details about their principals and any affiliations with foreign interests.

Additionally, the law prohibits funders from making legal decisions regarding attorney representation, settlements, and expert witnesses. It also requires that litigation financing agreements be disclosed during discovery, as reported by the National Law Review. You can view the bill text here.

Moreover, the legislation includes provisions that could affect auto insurers. Specifically, while the use of seat belts may be considered in lawsuits, the law states that “the failure of an occupant of a motor vehicle to wear a seat safety belt in any seat of a motor vehicle which has a seat safety belt or belts shall not be any basis for a cancellation of insurance coverage or an increase in insurance rate.”

Another significant change requires that manufacturers’ warranties for air-conditioning and heating systems be transferable to the new owner of a home. It also prohibits manufacturers from mandating that consumers register their products for the warranty to remain valid, according to news reports.

In Florida, Senate Bill 655, signed into law in April, mandates that pet insurance providers enhance their explanations of policies, coverage, and the rationale behind claims denials. The bill’s text can be found here.

Additionally, Dexter’s Law, stemming from House Bill 255, requires the Florida Department of Law Enforcement to maintain a searchable list of individuals convicted of or pleading guilty to animal cruelty. This law could facilitate the demonstration of a pattern of neglect in dog-attack lawsuits and related insurance claims.

In South Carolina, long-awaited yet controversial changes to the state’s liquor liability law took effect on January 1. Previously, state law mandated $1 million in liquor liability coverage for most bars and restaurants, a requirement that led to soaring insurance premiums and reportedly drove many establishments out of business.

The new law reduces the coverage requirement for establishments where alcohol constitutes less than 40% of total sales. It also limits liability for businesses found to be less than 50% at fault. Furthermore, the law allows establishments to lower their liquor liability coverage by requiring only an aggregate limit of $1 million, provided they cease alcohol sales at midnight, offer training to servers, and implement other measures.

For more details on this law, read here. A broader bill aimed at changes to “joint-and-several” liability failed to pass in 2025.

Topics
Lawsuits
Mergers & Acquisitions
Legislation
Liability