Casualty Terms and Provisions: Negligence, Comparative Fault, the Defense Obligation and Other Insurance

The four elements of negligence and the damages a policy pays

Almost every casualty claim you will ever see starts in the same place. A plaintiff suing in negligence must prove four elements, and all four. Miss one and there is no cause of action, no matter how careless the conduct looks.

• Duty. A legal obligation to conform to a standard of care owed to this plaintiff. The standard is what a reasonably prudent person would do in the same circumstances. A professional is measured against others in the same profession, and a child against a reasonable child of like age, capacity and experience, never against an adult.
• Breach. Conduct falling below that standard, by act or by omission. Leaving a hazard unmarked is a breach exactly as much as creating it.
• Proximate cause. An unbroken chain from the breach to the harm, limited by foreseeability. Cause in fact alone is not enough; the harm must be a reasonably foreseeable consequence of the breach.
• Damages. An actual, measurable loss. Careless conduct that injures nobody produces no claim at all.

That fourth element is where the insurance policy attaches. The ISO commercial general liability insuring agreement promises to pay those sums the insured becomes legally obligated to pay as damages. A legal obligation, not a moral one, and damages, not conduct. This is why an insurer can be certain its insured behaved badly and still owe nothing.

Damages themselves split into three families, and Florida uses two vocabularies for the first two.

• Special damages, which the Florida statutes call economic damages: medical and funeral expenses, past and future lost income, replacement value of lost property, repair and replacement costs. Section 768.81(1)(b), F.S., defines economic damages in those terms. Every item can be proved from paperwork.
• General damages, called noneconomic damages: pain and suffering, mental anguish, disfigurement, inconvenience, disability, loss of consortium, loss of the capacity to enjoy life. No receipt exists for any of it.
• Punitive damages, which punish and deter rather than compensate. They are a separate category, separately gated and separately capped.

Two cautions on that list. Noneconomic damages is not a defined term in s. 768.81(1), F.S., which defines only accident, economic damages, negligence action and products liability action, so treat the general and noneconomic pairing as a property and casualty convention rather than a statutory definition. And punitive damages cannot simply be pleaded: s. 768.72(1), F.S., requires leave of court on a reasonable showing by evidence in the record or proffered by the claimant, and s. 768.72(2) sets the substantive standard at intentional misconduct or gross negligence proved by clear and convincing evidence.

Comparative negligence after HB 837: the greater-than-50-percent bar

This is the single most-missed topic on the Florida casualty side, because Florida changed systems in 2023 and most printed manuals still teach the old one. Three systems exist in American law, and Florida has used all three.

• Contributory negligence. Any fault at all by the claimant, even one percent, bars recovery entirely. Florida abandoned this in Hoffman v. Jones, 280 So. 2d 431 (Fla. 1973).
• Pure comparative negligence. Recovery is reduced by the claimant's own share with no ceiling, so a claimant 90 percent at fault still collects 10 percent of the damages. This was Florida's rule from 1973 until 24 March 2023.
• Modified comparative negligence with a bar. Recovery is reduced by the claimant's share up to a threshold, and above it the claimant takes nothing. This is Florida's rule now.

Section 768.81(6), F.S., created by HB 837, chapter 2023-15, Laws of Florida, provides that in a negligence action any party found to be greater than 50 percent at fault for his or her own harm may not recover any damages. Section 768.81(2) still does the arithmetic below the bar: contributory fault diminishes proportionately the amount awarded as economic and noneconomic damages, and does not bar recovery, subject to subsection (6).

So the analysis is two steps, in this order.

• Step one. Is the claimant more than 50 percent at fault? If yes, stop. The recovery is zero and no arithmetic follows.
• Step two. If the claimant is at 50 percent or less, multiply the total damages by the defendants' combined share. A claimant 30 percent at fault on $250,000 of damages recovers $175,000, not $75,000.

Three details decide most exam questions on this topic. First, the bar is written as greater than 50 percent, so a claimant found exactly 50 percent at fault still recovers half. Study material that calls Florida a 51 percent state is using shorthand that happens to reach the same result; the statute's words are the safer thing to memorize. Second, s. 768.81(6) expressly does not apply to an action for damages for personal injury or wrongful death arising out of medical negligence under chapter 766, F.S., which keeps pure comparative fault. Third, s. 768.81(4) keeps the whole comparative fault section away from actions based on intentional torts and from actions to recover actual economic damages resulting from pollution.

Dates matter on this topic more than on almost any other. HB 837 was signed and took effect on 24 March 2023, and by its own terms it applies to causes of action filed after that date. A case that was already on file on 23 March 2023 is still judged under pure comparative negligence. Watch that this is a different trigger from the statute of limitations change in the same bill, which applies to causes of action accruing after that date.

Apportionment, joint and several liability, and the empty chair

Once fault is measured, someone has to pay. Section 768.81(3), F.S., tells the court how: in a negligence action the court enters judgment against each party liable on the basis of that party's percentage of fault, and not on the basis of the doctrine of joint and several liability.

That sentence has a hard practical edge. If a jury splits $1,000,000 of damages 80 percent to an insolvent contractor and 20 percent to a solvent one, the solvent defendant owes $200,000 and nothing more. No mechanism reallocates the missing share, and the claimant absorbs the loss. In a joint and several jurisdiction the solvent defendant could have been made to pay the whole judgment and then chase contribution.

Get the history right, because study guides routinely credit the wrong statute. Joint and several liability in Florida negligence actions was not abolished by HB 837. Florida phased it out over two decades and finished the job in 2006 with chapter 2006-6, Laws of Florida. HB 837 left s. 768.81(3) essentially where it found it. A manual that credits HB 837 with the change is off by seventeen years; a manual that still describes Florida as a joint and several state is simply describing repealed law.

The other half of apportionment is the nonparty on the verdict form, known in Florida practice as a Fabre defendant after Fabre v. Marin, 623 So. 2d 1182 (Fla. 1993). A defendant who wants fault placed on someone who was never sued must, under s. 768.81(3)(a), affirmatively plead the nonparty's fault, identify the nonparty, and prove that fault by a preponderance of the evidence. Fault assigned to the empty chair reduces what every named defendant owes, which is why the pleading requirement is a real procedural gate rather than a formality.

Two boundaries on the whole apportionment scheme deserve memorizing.

• Section 768.81(4), F.S., keeps the section away from actions based on an intentional tort, from actions to recover actual economic damages resulting from pollution, and from causes of action where chapter 403, 498, 517, 542 or 895, F.S., specifically provides for joint and several liability.
• Section 768.0701, F.S., created by HB 837, punches through that first boundary in one setting. Notwithstanding s. 768.81(4), in an action against the owner, lessor, operator or manager of commercial or real property brought by a person lawfully on the property who was injured by the criminal act of a third party, the trier of fact must consider the fault of all persons who contributed to the injury. The assailant goes on the verdict form, and every percentage point assigned to the criminal comes off the premises owner's bill. That is new law as of 24 March 2023 and it is one of the most consequential quiet changes in the whole reform package.

For an agent, the consequence of a state without joint and several liability is not academic. When a claimant cannot collect from an insolvent tortfeasor, the only money left is the claimant's own first-party protection: uninsured and underinsured motorist coverage, medical payments coverage, health insurance and disability coverage. That is the coverage conversation Florida's apportionment rule forces.

Liability without proving carelessness: strict, absolute and vicarious

Not every liability theory runs through the four elements. Two large families skip the breach question entirely, and the exam tests whether you can tell them apart.

Absolute liability, usually called strict liability, attaches without regard to fault. There is no standard of care to breach, so perfect compliance with every permit, regulation and industry practice is not a defense. Florida applies it to abnormally dangerous or ultrahazardous activities such as blasting and keeping wild animals, to defective and unreasonably dangerous products, and by statute to workers compensation, where the employer pays for work-related injury without the employee proving negligence and without the employer arguing the employee was careless. For the agent the practical consequence is underwriting: explosion, collapse and underground property damage, the XCU exposures, are commonly restricted by endorsement on a contractor's general liability policy and have to be bought back deliberately.

Vicarious liability is different. It imposes on one party the liability for another party's tort because of the relationship between them, not because the first party did anything wrong. Respondeat superior makes an employer answerable for an employee's negligence committed within the course and scope of employment. It does not ordinarily reach an independent contractor's negligence, subject to exceptions for nondelegable duties and inherently dangerous work.

Florida adds a doctrine most states do not have, and it is heavily tested. Under the dangerous instrumentality doctrine, adopted by the Florida Supreme Court in Southern Cotton Oil Co. v. Anderson, 80 Fla. 441, 86 So. 629 (1920), a motor vehicle is a dangerous instrumentality, and an owner who voluntarily entrusts it to another is vicariously liable for that operator's negligence with no showing of owner fault required. Do not confuse it with negligent entrustment, which is a separate and additional theory that does require proof the owner knew or should have known the driver was incompetent, unfit or unlicensed.

The doctrine is capped by statute, and the numbers are worth memorizing.

• Section 324.021(9)(b)3., F.S. A natural person who loans a motor vehicle to a permissive user is liable up to $100,000 per person and up to $300,000 per incident for bodily injury, plus up to $50,000 for property damage. If the permissive user is uninsured or carries limits less than $500,000 combined property damage and bodily injury liability, the owner is exposed to up to an additional $500,000 in economic damages only. Notice how high that trigger sits: a driver carrying respectable-looking 250/500 split limits still falls under it.
• Section 324.021(9)(b)2., F.S., applies the same figures to a lessor renting for less than one year, and s. 324.021(9)(b)1. removes owner status altogether from a lessor on a lease of one year or longer where the lessee carries at least 100/300 bodily injury and $50,000 property damage, or at least $500,000 combined.
• Federal law overrides part of this. The Graves Amendment, 49 U.S.C. s. 30106, enacted in 2005, bars vicarious liability of a business engaged in renting or leasing motor vehicles for the driver's negligence where the owner itself was not negligent and committed no criminal wrongdoing. Older Florida manuals that teach unlimited rental-company vicarious liability are pre-2005.

Finally, keep res ipsa loquitur out of this family. It is a rule of evidence, not a form of liability without fault. Where the instrumentality was in the defendant's exclusive control and the accident is one that does not ordinarily happen absent negligence, the doctrine permits the trier of fact to infer negligence. Goodyear Tire and Rubber Co. v. Hughes Supply, Inc., 358 So. 2d 1339 (Fla. 1978), treats it as a permissible inference that does not shift the burden of proof and does not make the defendant an insurer. Florida keeps it available in medical cases under Marrero v. Goldsmith, 486 So. 2d 530 (Fla. 1986), and s. 766.102(3)(b), F.S., goes further by making the discovery of a retained foreign body prima facie evidence of negligence, while s. 766.102(3)(a) says a medical injury alone creates no inference or presumption at all.

Premises liability and the statutes that replaced the common law

Premises claims are the bread and butter of a general lines book, and Florida has replaced most of the common law here with statute. Start with the duty owed, which depends on why the injured person was there.

• Invitee, on the land for a purpose connected to the possessor's business or with an express or implied invitation: reasonable care, which includes inspecting for hazards, correcting them or warning of concealed dangers.
• Licensee, present with permission but for their own purposes: warn of known dangers that are not readily observable.
• Trespasser: the low duty in s. 768.075(3), F.S.

Section 768.075(3) splits trespassers by whether the possessor knew about them. A discovered trespasser is a person whose actual physical presence was detected within 24 hours preceding the accident; the possessor must refrain from gross negligence or intentional misconduct that proximately causes injury, and must warn of dangerous conditions that are known to the possessor but not readily observable by others. An undiscovered trespasser gets less: the possessor must only refrain from intentional misconduct that proximately causes injury, and there is no duty to warn at all.

The transitory foreign substance rule is the one candidates get wrong most often, because the answer changed in 2010. Section 768.0755(1), F.S., requires a person who slips and falls on a transitory foreign substance in a business establishment to prove that the business had actual or constructive knowledge of the dangerous condition and should have taken action to remedy it. Constructive knowledge may be proven by circumstantial evidence showing either that the condition existed for such a length of time that the business should have known of it in the exercise of ordinary care, or that the condition occurred with regularity and was therefore foreseeable. The old rule, which older manuals still print, let the mere presence of the substance shift the burden to the store. That is no longer Florida law.

Negligent security got its own statute in 2023. Section 768.0706(2), F.S., gives the owner or principal operator of a multifamily residential property a presumption against liability for criminal acts committed on the premises by third parties who are not employees or agents, if the owner substantially implements the listed measures: a security camera system at points of entry and exit with recordings retained and retrievable for at least 30 days; lighted parking lots, walkways, laundry rooms and common areas from dusk until dawn; at least a 1-inch deadbolt in each dwelling unit door; locking devices on windows and on exterior doors accessible from outside the unit; a peephole or door viewer; a crime prevention through environmental design assessment no more than three years old; and crime deterrence and safety training for employees within 60 days of hire. Read the operative word carefully. It is a rebuttable presumption, not immunity: the owner can still be sued, and a claimant can still overcome it.

Two more Florida-specific rules round out the topic.

• Attractive nuisance. Where an artificial condition on land is likely to attract children too young to appreciate its danger, the occupier owes ordinary care, and unsecured heavy machinery is the classic case. Florida narrows the doctrine sharply for water. Allen v. William P. McDonald Corp., 42 So. 2d 706 (Fla. 1949), holds an artificial body of water is not an attractive nuisance unless it is constructed as a trap or presents an unusual element of danger, and Adler v. Copeland, 105 So. 2d 594 (Fla. 3d DCA 1958), applied that to an ordinary residential swimming pool. Do not carry the textbook shorthand that a pool equals an attractive nuisance into a Florida answer; pool exposure runs through ordinary negligence and the Residential Swimming Pool Safety Act at ss. 515.27 and 515.29, F.S.
• Dram shop. Section 768.125, F.S., limits liability rather than creating it. Selling or furnishing alcoholic beverages to a person of lawful drinking age creates no liability for that person's intoxication. Only two exceptions restore it: willfully and unlawfully selling or furnishing to a person not of lawful drinking age, and knowingly serving a person habitually addicted to alcohol. Visible intoxication in a legal-age adult is the trigger in many other states and in the liquor liability forms candidates study, and it is not the Florida standard.

Causation deserves a closing note. Under Stuart v. Hertz Corp., 351 So. 2d 703 (Fla. 1977), subsequent medical treatment of an injury the defendant caused, including negligent treatment, is a foreseeable consequence of the original wrong, so the first tortfeasor stays liable for the aggravated condition and may not implead the treating physician. An intervening cause only becomes superseding when it is both unforeseeable and independent.

The duty to defend: broader than the duty to indemnify

The insuring agreement of the ISO commercial general liability form contains two separate promises, and candidates lose points by treating them as one. The insurer will pay those sums the insured becomes legally obligated to pay as damages, and the insurer has the right and duty to defend the insured against any suit seeking those damages. It also states the limit of that duty: no duty to defend a suit seeking damages to which the insurance does not apply, and the insurer may at its discretion investigate any occurrence and settle any claim or suit that may result.

Florida decides whether the duty is triggered by the eight corners rule. Compare the allegations within the four corners of the complaint against the four corners of the policy. What the insurer believes actually happened is irrelevant, doubts are resolved in favor of the insured, and if any count in the complaint is even potentially within coverage the insurer must defend the entire action. A complaint pleading both negligent supervision and excluded intentional battery gets a full defense even where the insurer is certain the battery count is the real claim.

That is why the duty to defend is broader than the duty to indemnify. Indemnity is judged on the facts as they turn out; the defense is judged on the allegations as pleaded. An insurer can spend a fortune defending a suit and owe nothing at the end of it.

Two questions follow: when does the duty end, and whose money pays for it.

• It ends by exhaustion. The form says the right and duty to defend end when the insurer has used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B, or medical expenses under Coverage C. Tendering the limit is the exit from the defense, not a denial of coverage.
• It ends, in effect, below a self-insured retention. Under an SIR the insured retains and usually administers losses inside the retention, and the insurer's duties, including the duty to defend, attach only above it. A deductible works the opposite way: the insurer defends and pays the claimant from the first dollar and then bills the insured back, which means the insurer, not the claimant, carries the credit risk if the insured cannot pay.
• Defense costs sit outside the limit on the standard CGL, because they are Supplementary Payments. On a wasting, eroding, burning-limits or self-consuming form, common in professional liability, directors and officers and employment practices liability, defense costs reduce the limit. Two $1,000,000 quotes are therefore not the same product: on $300,000 of defense and a $900,000 settlement, the outside-limits form leaves the insured paying nothing and the eroding form leaves the insured funding $200,000.

Florida also regulates how an insurer preserves a coverage defense while it defends. Section 627.426(2), F.S., the Claims Administration statute, sets a two-step timetable. Written notice of a reservation of rights must go to the named insured within 30 days after the insurer knew or should have known of the coverage defense. Then, within 60 days of that notice or of receipt of the summons and complaint, whichever is later, but in no case later than 30 days before trial, the insurer must do one of three things: give written notice of its refusal to defend, obtain a non-waiver agreement from the insured after full disclosure of the specific facts and policy provisions relied on, or retain independent counsel mutually agreeable to the parties at the insurer's expense. Missing the timetable forfeits the coverage defense. Note the limit of the statute: it governs coverage defenses to an otherwise covered claim, not the absence of coverage in the first place.

Two more provisions belong with the defense obligation. The Bankruptcy condition states that bankruptcy or insolvency of the insured or of the insured's estate will not relieve the insurer of its obligations, so both defense and indemnity survive. And under paragraph 2 of Supplementary Payments, where the insured has assumed the defense of an indemnitee in an insured contract and the listed conditions are met, the insurer will defend that indemnitee and those defense costs are deemed to be Supplementary Payments rather than damages, which keeps them outside the limit.

Supplementary payments: what the insurer pays on top of the limit

Supplementary Payments is the provision that funds everything a liability claim costs other than the damages themselves. On the ISO commercial general liability form the heading is Supplementary Payments, Coverages A and B, and the provision closes with the sentence that decides most exam questions: these payments will not reduce the limits of insurance. The full $1,000,000 stays available for damages no matter how much the defense costs.

The list is short enough to memorize, and the dollar figures inside it are tested.

• All expenses the insurer incurs, which is where defense costs live.
• Up to $250 for the cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies. The insurer pays the cost and does not have to furnish the bond.
• The cost of bonds to release attachments, but only for bond amounts within the applicable limit of insurance. Again the insurer pays the cost and does not have to furnish the bond.
• All reasonable expenses incurred by the insured at the insurer's request to assist in the investigation or defense, including actual loss of earnings up to $250 a day because of time off from work.
• All court costs taxed against the insured in the suit. These payments do not include attorney fees or attorney expenses taxed against the insured, which is the write-out candidates forget.
• Prejudgment interest awarded against the insured on that part of the judgment the insurer pays. If the insurer offers to pay the applicable limit, it does not pay prejudgment interest for the period after the offer.
• All interest on the full amount of any judgment that accrues after entry of the judgment and before the insurer has paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit.

That last item is the one with teeth. On a $1,500,000 judgment against a $1,000,000 limit, post-judgment interest runs on the entire $1,500,000, in addition to the limit, until the insurer pays, offers or deposits its share. That is an uncapped exposure and one reason an insurer weighs an appeal carefully, and it also shows the built-in cut-off: tender stops the meter. Prejudgment interest is the narrower promise, owed only on the part of the judgment the insurer actually pays, never on the excess.

Now the comparison the exam loves. Different forms carry different supplementary payment lists, and the differences are all in the numbers and the bonds.

• Commercial general liability, CG 00 01: bail bonds up to $250, bonds to release attachments within the limit, lost earnings up to $250 a day. No appeal bond premiums appear anywhere on the CGL list.
• Personal auto, PP 00 01, Part A: bail bonds up to $250; premiums on appeal bonds and bonds to release attachments in any suit the insurer defends; interest accruing after a judgment in a suit the insurer defends, with the duty to pay interest ending when the insurer offers the part of the judgment within its limit; up to $200 a day for loss of earnings, but not other income, for attendance at hearings or trials at the insurer's request; and other reasonable expenses incurred at the insurer's request.
• Business auto, CA 00 01: bail bonds up to $2,000, a far larger figure than either of the other two, plus bonds to release attachments within the limit, lost earnings up to $250 a day, court costs excluding attorney fees, and post-judgment interest until the insurer pays, offers or deposits its share.

Two closing cautions. First, the phrase in addition to the limit is a feature of these standard forms, not a law of nature: on a wasting or eroding-limits professional form the defense and related costs run through the limit, so the limit definition governs and the label does not. Second, supplementary payments are not damages. They do not erode the general aggregate, they are not what the insured becomes legally obligated to pay, and Coverage C medical payments, which are damages-like but paid without regard to fault, do erode the general aggregate. Keep the three buckets separate.

Other insurance: primary, excess, and the two ways insurers share

When two or more policies cover the same loss, the Other Insurance condition decides who pays and in what order. It never increases the total available to the insured; it only allocates. On the ISO commercial general liability form the condition is Section IV, paragraph 4, and it has three parts.

• Primary Insurance. This insurance is primary except when the Excess Insurance paragraph applies. If other insurance is also primary, the insurers share by the method described below. The 04 13 edition adds that this insurance is primary to, and the insurer will not seek contribution from, any other insurance available to you under which you are added as an additional insured by attachment of an endorsement.
• Excess Insurance. This insurance is excess over specified other coverages, including fire, extended coverage, builder's risk or installation risk covering your work; fire insurance for premises rented to or temporarily occupied by you; insurance you bought to cover your liability as a tenant for property damage to premises rented to you; aircraft, auto or watercraft exposures not caught by the auto exclusion; and, critically for contractors, any other primary insurance available to you covering liability for damages arising out of premises or operations, or products and completed operations, for which you have been added as an additional insured.
• Method Of Sharing. If all of the other insurance permits contribution by equal shares, the insurers follow that method: each contributes equal amounts until it has paid its applicable limit or the full loss is paid, whichever comes first. If any of the other insurance does not permit contribution by equal shares, the insurers share by limits, pro rata, each paying the proportion its limit bears to the total of all applicable limits.

Read those three parts in order. Contribution methods only ever come into play when the policies stand on the same footing, that is, when both are primary. Where one policy is primary and the other is written as excess over insurance available to the insured as an additional insured, there is no sharing at all: the primary layer exhausts first and the excess layer drops down for the balance. On a $600,000 loss arising out of a subcontractor's work, with a $500,000 subcontractor limit naming the general contractor as an additional insured, the subcontractor's policy pays $500,000 and the general contractor's own policy responds as excess for the remaining $100,000. That layering is the entire commercial purpose of an additional insured requirement in a subcontract.

Additional insured status is worth its own paragraph because it is routinely misunderstood. An additional insured gains insured status under someone else's policy, scoped by the specific endorsement attached: CG 20 10 for a general contractor with respect to a subcontractor's ongoing operations, CG 20 37 for completed operations, CG 20 11 or CG 20 26 for landlords and other designated parties. The status is narrower than a named insured's in two ways. It draws on the same limits as the named insured rather than getting its own tower, so a large loss can leave both parties short. And only the first named insured holds the rights to receive notices, request policy changes and pay premium. A certificate of insurance, on its own, confers no coverage and no right to notice of cancellation.

Two conditions are frequently confused with Other Insurance and should be filed separately.

• Two Or More Coverage Forms Or Policies Issued By Us, at Section IV, B.8 of the business auto form: where two forms or policies issued by the same insurer or an affiliated company apply to the same accident, the aggregate maximum under all of them cannot exceed the highest applicable limit under any one of them. It does not apply to a form written specifically to sit as excess over this one. Other Insurance allocates among unrelated insurers; this condition stops an insured stacking two forms bought from the same group.
• Self-insured retentions and deductibles are not other insurance at all. They decide whose money goes first inside a single policy, not which of two policies responds.

Florida overrides the contract in three places worth memorizing. Section 627.7263, F.S., makes the lessor's valid and collectible liability insurance and personal injury protection primary for a vehicle rented or leased in Florida, but only for the limits required by ss. 324.021(7) and 627.736, F.S., which is 10/20/10 plus PIP; above that the renter's own policy responds. The lessor can reverse that default only by stating in the rental or lease agreement, in at least 10-point type on the face of the agreement, that the renter's own coverage is primary. Section 627.4132, F.S., prohibits stacking of motor vehicle coverages generally, with uninsured motorist coverage carved out and governed instead by s. 627.727, F.S., where s. 627.727(8) permits a nonstacked election in language approved by the Office, with revised rates reflecting a reduction of at least 20 percent in the uninsured motorist premium. And s. 627.727(1) requires that any rejection of uninsured motorist coverage, or election of limits lower than the bodily injury liability limits, be made on a form approved by the Office.

Florida's deadlines and how damages are now proved

Florida rewrote the arithmetic of a liability claim in 2023, and the changes cluster around two things: how long a claimant has, and what a claimant may show a jury. Both are places where an out-of-date manual costs points.

Start with limitations. Section 95.11(5)(a), F.S., now places an action founded on negligence in the two-year column. HB 837 cut the period from four years to two, and that change applies to causes of action accruing after the act took effect on 24 March 2023. Note the different trigger: most of HB 837 applies to causes of action filed after that date, but the limitations amendment keys on accrual, so a claim that accrued on 1 March 2023 still carries four years even if suit is filed later. Four years is not gone from the statute either. Section 95.11(3), F.S., still holds many actions at four years, including those founded on statutory liability, on an unwritten contract, on trespass, and on fraud, which is why the answer to a limitations question is never simply that everything in Florida is two years now. Wrongful death sits at two years under s. 95.11(5)(e) and always did, so it is not the exception to a four-year rule. Medical malpractice runs two years from the incident or from discovery under s. 95.11(5)(c), subject to a four-year outside limit.

Construction has its own clock and it changed in the same year under a different bill. Section 95.11(3)(b), F.S., as amended by SB 360 in 2023, gives a four-year limitations period, with the time running from the earliest of the date the authority having jurisdiction issues a temporary certificate of occupancy, a certificate of occupancy or a certificate of completion, or the date construction is abandoned, and a discovery rule for latent defects. Over all of it sits a seven-year statute of repose measured from that same earliest date. The old rule, still printed in many manuals, was a ten-year repose running from the latest of four dates. SB 360 took effect 13 April 2023 and carried a transition clause requiring any action that would still have been timely under the old ten-year repose to be commenced on or before 1 July 2024. A limitations period can never carry a claim past the repose; repose is an outside wall, not a countdown.

Now damages. Three statutes control what a Florida jury is allowed to award.

• Collateral sources. Section 768.76(1), F.S., directs the court to reduce an award by the total of all amounts paid for the claimant's benefit or otherwise available from collateral sources, with two qualifications that decide most exam questions. There is no reduction for collateral sources for which a subrogation or reimbursement right exists, and any reduction is offset to the extent of amounts the claimant or immediate family paid, contributed or forfeited to secure the benefit. Section 768.76(2) sweeps in health and disability insurance, wage continuation plans and most government programs, but expressly excludes Medicare, Medicaid, workers compensation, other federal programs carrying a lien or right of reimbursement, and life insurance benefits.
• Medical damages proof. Section 768.0427, F.S., created by HB 837, ended the billed-charges model. Evidence of past medical treatment that has been satisfied is limited to the amount actually paid, regardless of the source of payment. Unsatisfied charges and future care are tied to what the claimant's health coverage would pay, or to Medicare-based benchmarks where there is no coverage. Letters of protection must be disclosed along with itemized, properly coded billings, factoring company details where the account was sold, and the identity of the referral source.
• Punitive damages. Section 768.72(1), F.S., is the pleading gate: no punitive claim without leave of court on a reasonable evidentiary showing, and s. 768.72(2) sets the standard at intentional misconduct or gross negligence proved by clear and convincing evidence. Section 768.73(1)(a) caps the award at the greater of three times the compensatory damages awarded to each claimant or $500,000. Section 768.73(1)(b) raises that to the greater of four times compensatory or $2 million where the conduct was motivated solely by unreasonable financial gain and a managing agent, director or officer knew of its unreasonably dangerous nature. Section 768.73(1)(c) removes the cap entirely only on a finding of specific intent to harm.

Two more figures round out the money side. Section 768.79, F.S., shifts fees on an unaccepted offer of judgment: a defendant recovers reasonable costs and attorney fees from the date of the offer if the plaintiff's judgment is at least 25 percent less than the offer, and a plaintiff recovers if the judgment is at least 25 percent more than an unaccepted demand, with 30 days to accept in each case. And s. 768.28(5)(a), F.S., waives sovereign immunity but caps payment at $200,000 on any one claim and $300,000 for all claims arising out of the same incident, with anything above payable only through a legislative claim bill. HB 145 in the 2026 session would have raised those figures to $350,000 and $500,000 and passed both chambers, but it was vetoed on 30 June 2026, so the long-standing caps still govern.

Bad faith, nonjoinder and the Florida claim-handling statutes

The duty to defend and the duty to settle sit inside a Florida statutory frame that changed heavily in 2023. Learn the sequence, because the exam tests the order of operations rather than the theory.

A statutory bad faith action lives at s. 624.155, F.S., and it opens with a condition precedent. Under s. 624.155(3)(a), the Department of Financial Services and the authorized insurer must be given 60 days' written notice of the violation, on the department's civil remedy notice form, identifying the statutory provision violated with the specific language of the statute, the facts relied on and the policy language at issue. Section 624.155(3)(c) then gives the insurer its cure period: no action lies if, within 60 days after the insurer receives the notice, the damages are paid or the circumstances giving rise to the violation are corrected. The clock runs from the insurer's receipt, not from the filing.

HB 837 added a second and much broader shield. Section 624.155(4)(a), F.S., provides that an action for bad faith involving a liability insurance claim, including any such action brought under the common law, shall not lie if the insurer tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of a claim accompanied by sufficient evidence to support the amount claimed. A tender inside that window is a complete defense, and the claimant's refusal of the tender does not revive the action. Two mechanics travel with it: under s. 624.155(4)(b), if the insurer misses the 90 days, the existence of the period and the fact that no bad faith action could have been brought had the insurer tendered in time are inadmissible in the bad faith action; and under s. 624.155(4)(c), missing the window extends any applicable statute of limitations by an additional 90 days.

The standard of conduct changed too. Section 624.155(5)(a), F.S., states that mere negligence alone is insufficient to constitute bad faith. Sloppy handling is evidence a jury may weigh, but standing alone it does not carry the insured's burden. Section 624.155(5)(b) goes further and puts duties on the other side of the file: the insured, the claimant and their representatives owe a duty to act in good faith in furnishing information, making demands, setting deadlines and attempting to settle, and where they did not, the trier of fact may reasonably reduce the damages awarded against the insurer. That is a comparative-fault idea imported into bad faith, and it is new. Keep one carve-out straight: for property insurance, s. 624.1551, F.S., additionally requires an adverse adjudication of breach of the policy against the insurer before a bad faith action lies. That requirement does not apply to liability and casualty claims.

Around the bad faith statute sit four claim-handling rules that appear constantly on the exam.

• Nonjoinder. Section 627.4136(1), F.S., makes it a condition precedent to the accrual or maintenance of a cause of action against a liability insurer by a person who is not an insured that the claimant first obtain a settlement or verdict against a person who is an insured. Florida is not a direct-action state. Section 627.4136(4) then permits joining the insurer at the time judgment is entered or a settlement is reached during the litigation, for the purpose of entering final judgment or enforcing the settlement, unless the insurer denied coverage under s. 627.426(2) or defended under a reservation of rights pursuant to s. 627.426(2), in which case the claimant's route is a separate action.
• Disclosure of coverage. Section 627.4137, F.S., requires an insurer that does or may provide liability coverage to furnish, within 30 days of a claimant's written request, a statement under oath by a corporate officer or the claims manager or superintendent giving the insurer's name, the name of each insured, the coverage limits and any policy or coverage defense, together with a copy of the policy. The written request triggers it; no suit need be on file.
• Payment of an agreed settlement. Section 627.4265, F.S., requires an insurer that has agreed in writing to settle to tender payment no later than 20 days after the settlement is reached, and a late amount bears interest at 12 percent per year from the date of the agreement. Where payment was conditioned on execution of a release, interest is suspended until the executed release is furnished.
• Attorney fees. HB 837 repealed the one-way fee statutes at ss. 627.428 and 626.9373, F.S., and created s. 86.121, F.S., which requires a court to award reasonable attorney fees to a named insured, omnibus insured or named beneficiary who obtains a declaratory judgment on coverage after the insurer made a total coverage denial. Fees are limited to those incurred in the declaratory action, the right may not be assigned, a defense under a reservation of rights is not a denial, and the section does not apply to residential or commercial property insurance policies. A manual that still teaches that an insured who beats its insurer always recovers fees is describing a repealed statute.

Two policy conditions belong in the same mental folder. The Legal Action Against Us condition bars anyone from joining the insurer in a damages suit against an insured but expressly allows a person to sue the insurer to recover on an agreed settlement or on a final judgment against an insured, with the insurer never liable for amounts in excess of the applicable limit. And the Duties condition at paragraph 2.d says no insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation or incur any expense other than first aid without the insurer's consent, which is the provision that defeats an insured who settles quietly and then asks to be reimbursed.