January 31, 2018 Practice Points

Florida Supreme Court: Florida Statute § 558.004 Process May Trigger a Duty to Defend

Carriers and policyholders alike will need to carefully consider the scope and application of the defense language of liability insurance policies in the 558 context

by Nancy G. Cook and Steven J. Rapp

The Florida Supreme Court recently issued a decision with potentially wide-ranging effect on the duty to defend construction defect claims in the state of Florida, depending upon the terms of the policy at issue. See Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Company, 2017 WL 6379535 (Fla. Dec. 14, 2017). Under Florida law, before a claimant can litigate a claimed construction defect, the claimant must “serve written notice of claim on the contractor, subcontractor, supplier, or design professional, as applicable” and afford them an opportunity to investigate and repair any alleged damage. Fla. Stat. § 558.004. In Altman, the general contractor for a condominium project was insured by Crum & Forster under a general liability policy that defined “suit” as “a civil proceeding,” including “any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent.” The property owner served the general contractor with more than 800 notices of various construction defects under Section 558.004. The contractor submitted the notices to Crum & Forster and requested a defense.  Crum & Forster denied coverage, contending that the 558 notices did not constitute a “suit” as defined in the policy.  

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