Florida Court Ruling: Relief and Unanswered Questions on Agents’ Responsibilities to Insureds
Florida insurance agents and brokers can breathe a sigh of relief following a recent ruling from a state appeals court that effectively reversed significant damages in a case that could have expanded agents’ responsibilities and liabilities in coverage disputes.
The litigation, which has been ongoing, involved Brown & Brown, a prominent insurance brokerage based in Daytona Beach and one of the largest in the U.S. The case garnered considerable attention, prompting the Florida Association of Insurance Agents (FAIA) to submit a friend-of-the-court brief. They urged the Florida 5th District Court of Appeals to overturn a jury’s award of $1 million in damages against Brown & Brown.
In a favorable turn for the brokerage, the court agreed with many of the arguments presented by FAIA and Brown & Brown, sending the damage award back to Volusia County Circuit Court for reconsideration.
“Brown & Brown is pleased that the Fifth DCA reversed the jury verdict and remanded the matter for a new trial,” stated Melissa Murphy, an attorney from the Porter Wright law firm representing the brokerage.
However, the nuanced ruling leaves several questions about the full extent of agents’ and brokers’ responsibilities. The brokerage is currently reviewing the opinion and considering its next steps.
The case originated from Hurricane Matthew, which impacted Florida’s east coast in 2016. Houligan’s Pub & Club and Ormond Wine Co. in Ormond Beach relied on a Brown & Brown broker to secure hurricane coverage earlier that year. When the storm struck, the restaurant experienced a sewage backup, leading to extensive and costly cleaning and renovations.
After the disaster, their claim was denied. The owners discovered that their Lloyd’s of London wind policy, the only coverage available at the time, did not cover losses from sewage and microorganism contamination. They subsequently blamed their broker for this oversight and filed a lawsuit against Brown & Brown for failing to procure adequate insurance, breaching fiduciary duty, and negligently misrepresenting the extent of the policy. Essentially, they argued that the broker should have known that the coverage was insufficient.
In 2024, the Volusia County jury found in favor of the brokerage regarding the failure to secure insurance but ruled against Brown & Brown on the other claims. The brokerage appealed, questioning whether the trial court judge erred in allowing the damages. The court referenced a sister court’s 1998 decision, Capell vs. Gamble, in its deliberations.
The 5th DCA panel noted, “The limited issue is whether the analysis of Capell as to causation and damages for a failure to procure insurance claims should extend to breach of fiduciary duty and negligent misrepresentation claims.”
Brown & Brown demonstrated that in 2016, no coverage was available for sewage backup losses for the restaurant, even though such a policy was procured a year later. Additionally, Houligan’s leadership had not requested sewage/contamination coverage.
The jury’s $1 million damage award was largely based on the Lloyd’s policy. However, the 5th DCA had previously determined that this policy did not provide sewer coverage, leading the appeals court to conclude that the trial court erred.
“It was an error to allow the jury to calculate damages based on a policy that this Court has said does not provide coverage,” wrote 5th District Judge Scott Makar for the appellate panel. “Because this error is not harmless, the appropriate remedy is to remand this matter for a retrial limited solely to damages without reliance on the Lloyd’s policy.”
The appellate court also stated that pre-judgment interest would need to be recalculated.
This case has been closely monitored by Florida insurance agents. The FAIA’s legal team argued in their amicus brief that the Volusia judge’s decision to allow the substantial damage award would unreasonably expand agents’ fiduciary duties. If left unchallenged, the ruling could force agents to anticipate unexpressed needs of insureds, effectively making them all-knowing risk managers or, worse, unlimited guarantors of damages when coverage is denied.
“This is not only unjust, but it also puts agents at odds with other fiduciary duties and raises ethical concerns for insurance agents,” the FAIA brief contended. “Certainly, binding an insured to coverage and paying a premium for insurance they did not intend to obtain would constitute a breach of the agent’s duties to the insured.”
Attorneys argued that the sewage damage could not have been anticipated or covered. The Lloyd’s policy was specifically a wind policy, and the sewer backup resulted from a combination of non-wind factors: flooding from the hurricane, municipal utility failures, and a lack of plumbing protections at the restaurant.
Legally, insureds are responsible for reading their insurance policies. The pub’s owner did not demonstrate how he would have acted differently had sewage backup coverage been available in 2016.
The trial jury based its award on the total limits of a policy obtained in 2017, which had a sublimit of $50,000 for sewer overflow. The trial judge failed to instruct the jury accordingly, leading to a verdict unsupported by competent evidence, as argued by Brown & Brown’s attorneys.
FAIA President Kyle Ulrich has refrained from commenting on the appellate ruling until attorneys have had a chance to analyze the opinion’s subtleties. Both Brown & Brown and the insured pub owners have the option to request a reconsideration from the appeals court or seek a review from the state Supreme Court.
If the case proceeds to a new trial in Volusia County, it remains uncertain whether a new jury will issue a lower damages amount.
Other B&B Litigation: Brown & Brown Files Suit Over Alleged Howden Poaching of 200+ Employees
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Florida insurance agents and brokers can breathe a sigh of relief following a recent ruling from a state appeals court that effectively reversed significant damages in a case that could have expanded agents’ responsibilities and liabilities in coverage disputes.
The litigation, which has been ongoing, involved Brown & Brown, a prominent insurance brokerage based in Daytona Beach and one of the largest in the U.S. The case garnered considerable attention, prompting the Florida Association of Insurance Agents (FAIA) to submit a friend-of-the-court brief. They urged the Florida 5th District Court of Appeals to overturn a jury’s award of $1 million in damages against Brown & Brown.
In a favorable turn for the brokerage, the court agreed with many of the arguments presented by FAIA and Brown & Brown, sending the damage award back to Volusia County Circuit Court for reconsideration.
“Brown & Brown is pleased that the Fifth DCA reversed the jury verdict and remanded the matter for a new trial,” stated Melissa Murphy, an attorney from the Porter Wright law firm representing the brokerage.
However, the nuanced ruling leaves several questions about the full extent of agents’ and brokers’ responsibilities. The brokerage is currently reviewing the opinion and considering its next steps.
The case originated from Hurricane Matthew, which impacted Florida’s east coast in 2016. Houligan’s Pub & Club and Ormond Wine Co. in Ormond Beach relied on a Brown & Brown broker to secure hurricane coverage earlier that year. When the storm struck, the restaurant experienced a sewage backup, leading to extensive and costly cleaning and renovations.
After the disaster, their claim was denied. The owners discovered that their Lloyd’s of London wind policy, the only coverage available at the time, did not cover losses from sewage and microorganism contamination. They subsequently blamed their broker for this oversight and filed a lawsuit against Brown & Brown for failing to procure adequate insurance, breaching fiduciary duty, and negligently misrepresenting the extent of the policy. Essentially, they argued that the broker should have known that the coverage was insufficient.
In 2024, the Volusia County jury found in favor of the brokerage regarding the failure to secure insurance but ruled against Brown & Brown on the other claims. The brokerage appealed, questioning whether the trial court judge erred in allowing the damages. The court referenced a sister court’s 1998 decision, Capell vs. Gamble, in its deliberations.
The 5th DCA panel noted, “The limited issue is whether the analysis of Capell as to causation and damages for a failure to procure insurance claims should extend to breach of fiduciary duty and negligent misrepresentation claims.”
Brown & Brown demonstrated that in 2016, no coverage was available for sewage backup losses for the restaurant, even though such a policy was procured a year later. Additionally, Houligan’s leadership had not requested sewage/contamination coverage.
The jury’s $1 million damage award was largely based on the Lloyd’s policy. However, the 5th DCA had previously determined that this policy did not provide sewer coverage, leading the appeals court to conclude that the trial court erred.
“It was an error to allow the jury to calculate damages based on a policy that this Court has said does not provide coverage,” wrote 5th District Judge Scott Makar for the appellate panel. “Because this error is not harmless, the appropriate remedy is to remand this matter for a retrial limited solely to damages without reliance on the Lloyd’s policy.”
The appellate court also stated that pre-judgment interest would need to be recalculated.
This case has been closely monitored by Florida insurance agents. The FAIA’s legal team argued in their amicus brief that the Volusia judge’s decision to allow the substantial damage award would unreasonably expand agents’ fiduciary duties. If left unchallenged, the ruling could force agents to anticipate unexpressed needs of insureds, effectively making them all-knowing risk managers or, worse, unlimited guarantors of damages when coverage is denied.
“This is not only unjust, but it also puts agents at odds with other fiduciary duties and raises ethical concerns for insurance agents,” the FAIA brief contended. “Certainly, binding an insured to coverage and paying a premium for insurance they did not intend to obtain would constitute a breach of the agent’s duties to the insured.”
Attorneys argued that the sewage damage could not have been anticipated or covered. The Lloyd’s policy was specifically a wind policy, and the sewer backup resulted from a combination of non-wind factors: flooding from the hurricane, municipal utility failures, and a lack of plumbing protections at the restaurant.
Legally, insureds are responsible for reading their insurance policies. The pub’s owner did not demonstrate how he would have acted differently had sewage backup coverage been available in 2016.
The trial jury based its award on the total limits of a policy obtained in 2017, which had a sublimit of $50,000 for sewer overflow. The trial judge failed to instruct the jury accordingly, leading to a verdict unsupported by competent evidence, as argued by Brown & Brown’s attorneys.
FAIA President Kyle Ulrich has refrained from commenting on the appellate ruling until attorneys have had a chance to analyze the opinion’s subtleties. Both Brown & Brown and the insured pub owners have the option to request a reconsideration from the appeals court or seek a review from the state Supreme Court.
If the case proceeds to a new trial in Volusia County, it remains uncertain whether a new jury will issue a lower damages amount.
Other B&B Litigation: Brown & Brown Files Suit Over Alleged Howden Poaching of 200+ Employees
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Agencies
Legislation
Florida
