Florida Car accident | Bad faith | Duty to defend

How does the defendant insurer assess when they are required to defend a claim?

The obvious answer to this is that they should have a duty to defend a claim anytime their insured has caused an injury. This is part true; however the insurer has to determine if the factual allegations (losses) fall within the policy coverage. If the insurer makes a mistake and refuses to defend its insured, they will be held responsible. Take the case of Florida Farm Bureau Mutual Insurance Co. v. Rice, 393 So.2d 552 (Fla. 1st DCA 1980), where the insurer refused to defend the insured based on an agents declaration that there was no coverage. When the plaintiff obtained a judgment against the insured at trial, the insurer was held accountable for the full amount in a second claim when it was found that the insurer should have defended the insured. This ruling emphasized the importance of insurers completing thorough investigations into the validity of the coverage prior to denying coverage rights to the insured. As illustrated in Rice, when an insurer has denied coverage rights to an insured and refused to defend, there is no prerequisite that the insurer have engaged in settlement offers with the claimant before an excess claim can be pursued against the insurer. Therefore, if you have been injured in a Palm Beach County accident and the tortfeasor’s insurer refuses to defend the claim it is not mandatory that the insurer engage in settlement offer’s with you prior to bringing an action against the insurer for an excess judgment. When the defendant has received a complaint from an injured party, they should assess the complaint and determine whether they have a duty to defend their insured. Florida courts have held that the insurer may have a duty to defend even if the incident did not fall under the terms of its policy. Western World Insurance Co. v. CIGNA Corp., 718 F.Supp. 1518 (S.D. Fla. 1989). More importantly is the general rule that Florida has adopted that will trigger the duty to defend if the facts alleged in the complaint create potential coverage under the policy. This was the precise issue in National Union Fire Insurance Co. v. Lenox Liquors, Inc., adopting the general rule by holding that the obligation to defend an insured against an action, whether groundless or not, is governed solely by the allegations of the complaint filed against the insured.