It is impossible to discuss trends and developments in Florida insurance litigation without discussing the substantial legislative tort reforms that took place in 2023. For much of the past last two decades, Florida’s insurance market was constrained by perhaps the most aggressive insurance litigation environment in the United States. In 2023, after numerous failed prior attempts, the Florida Legislature passed substantial reforms aimed at freeing Florida’s insurance market, including significant reforms to insurance bad faith claims.

The reforms are still working their way through the courts, and there are still limited fulsome interpretations of many of the key provisions. However, decisions and results are steadily appearing, and it is clear that the reforms are impacting cases and the manner in which liability and insurance bad faith cases are litigated in Florida.

Some of the key reforms from 2023, enacted via HB 837, include:

• a new bad faith standard codified in Section 624.155(5)(a) that “negligence alone is insufficient to constitute bad faith”;
• a new 90-day safe harbour period for insurers to investigate liability claims;
• a provision dictating that claimants, insureds and their lawyers now owe reciprocal good-faith duties to insurers pursuant to Section 624.155(5)(b);
• new options under the newly created Section 624.155(6) for insurers to deal with instances where “two or more third-party claimants have competing claims arising out of a single occurrence, which in total may exceed the available policy limits of one or more of the insured parties who may be liable to the third-party claimants”; and
• a move to a modified comparative fault system for liability claims.

The Reforms Are Working

It is clear that the 2023 reforms are effective when lawyers and litigants go to extreme lengths to avoid those reforms. The recent decision in Abdullah Baker v A-ONE Commercial Insurance Risk Retention Group, Inc. (M.D. Fla. Aug. 3, 2026) makes this abundantly clear. The Abdullah Baker decision is less notable for its treatment of specific insurance bad faith reforms than for its unusually blunt criticism of plaintiff’s counsel and their purposeful efforts to avoid the effects of Florida’s 2023 tort reforms.

In Abdullah Baker, the federal court concluded that plaintiff Abdullah Baker’s (“Baker”) attorneys deliberately filed what they knew was an unripe bad faith action just days before the tort reforms became effective. Plaintiff then manipulated procedural rules to preserve that pre-reform filing date, while simultaneously withholding service for more than two years. Needless to say, the court was not pleased with the plaintiff and his attorneys’ attempts to avoid the impact of the 2023 reforms.

Ultimately, the court denied remand to state court, dismissed the action and found that plaintiff had acted in bad faith in his litigation behaviours. The court further referred plaintiff’s counsel to the Florida Bar for an investigation concerning their litigation tactics.

The underlying litigation

Baker was injured in a 2020 automobile accident and ultimately obtained a USD3.6 million jury verdict against A-One Commercial Insurance Risk Retention Group’s (“A-One”) insureds in March 2023. A-One had declined opportunities to settle within policy limits.

Three days before Governor Ron DeSantis signed the 2023 reforms into law, Baker filed a separate bad faith lawsuit against A-One on 21 March 2023. However, at that time, no final judgment had been entered in the underlying tort case, and an appeal had not yet begun, much less been concluded.

Accordingly, under long established Florida law, the bad faith claim was not ripe. Specifically, a bad faith claim is not ripe until a final judgment is entered and all appeals have been concluded. Indeed, Baker later conceded that a bad faith claim remains unripe while the underlying judgment is on appeal.

The court identified HB 837, and its resulting tort reforms, as the driving force behind the timing of the lawsuit. According to the Court, HB 837 significantly altered Florida bad faith law under Section 624.155. The court found that Baker’s lawyers believed the changes could negatively affect her recovery and therefore sought to lock in application of the pre-HB 837 law by filing before the legislation became effective. The most damaging evidence cited by the court was counsel’s own statement to the state court that dismissal of the prematurely filed action could be harmful because the tort reforms “may negatively impact” Baker’s rights. The federal judge treated that statement as direct evidence of counsel’s objective.

Ultimately, the thrust of the opinion is the court’s conclusion that plaintiff’s counsel engaged in a calculated strategy to preserve a pre-HB 837 filing date for the bad faith claim, while preventing the insurer from meaningfully responding. The court repeatedly emphasised that Baker’s attorneys knew the bad faith claim was unripe when they filed it. The judge characterised the filing as a “race to the courthouse” motivated by a desire to avoid HB 837 reforms.

Perhaps the most extraordinary feature of the opinion is that the court referred Baker’s attorneys to the Florida Bar. The court specifically requested investigation into potential violations involving candour, truthfulness, meritorious claims, fairness to opposing counsel, competence, diligence and related ethical duties.

The opinion can fairly be read as a forceful judicial rebuke of what the court viewed as an attempt to do an end run around the new tort reform framework. In short, the court treated the case as an example of purposeful procedural manoeuvring designed to avoid the new legislation and responded with dismissal, a finding of bad faith and a Bar referral. In other words, the reforms are here to stay, and courts will not tolerate attempts to avoid them.

The Tran Verdict: The First Comparative Bad Faith Finding

As the Abdullah court noted, claimants, insureds and their lawyers now owe reciprocal good-faith duties to insurers pursuant to Section 624.155(5)(b), Florida Statutes. The new good faith standard for claimants in Section 624.155(5)(b) provides in pertinent part:

“In any action for bad faith against an insurer, the trier of fact may consider whether the insured, claimant, or representative of the insured or claimant did not act in good faith pursuant to this paragraph, in which case the trier of fact may reasonably reduce the amount of damages awarded against the insurer”.

Accordingly, the statute provides a defence to insurers who are facing bad faith claims. On 24 April 2026, this defence was tested in a case styled Julie Tran v Progressive Select Insurance Company, Case No 2021-CA-004508, pending in the United States District Court (USDC) for the Middle District of Florida. It is the authors’ understanding that this is the first verdict in Florida to consider the good faith duties defence in 624.155(5)(b).

In Tran, the insurer alleged as an affirmative defence that the plaintiff or her representatives failed to act in good faith in their dealings with the defendant insurer. Because of this alleged defence, the jury, in considering the claim against the insurer, was also required to consider the bad faith actions of “the insured, claimant, or representative of the insured or claimant”. Pursuant to the new subsection, if the jury finds bad faith on the part of the insured or its representatives, the jury may reduce the amount of damages awarded against the insurer.

That is exactly what happened in Tran. Although the jury found against the insurer, the jury also substantially reduced the award to the insured as a result of a 40% finding of bad faith against the plaintiff and her representatives. It is the authors’ understanding that, at the time this article is being written, the court in Tran has denied Tran’s attempts to set aside the comparative bad faith finding against her and her representatives.

The Baker and Tran cases demonstrate that the reforms are having a real impact on the manner in which insurance litigation is conducted in Florida.        

Safe Harbour Statutes

Florida’s HB 837 amended Florida’s bad faith statute, Fla. Stat. 624.155, by creating a 90-day safe harbour for insurers to investigate liability bad faith claims under 624.155(4) and establishing options for insurers to resolve competing third-party claims arising from a single occurrence that may exceed available policy limits under 624.155(6). Although both provisions afford insurers 90 days to act, insurers must be mindful of the different triggering events and evidentiary standards applicable to each statute.

Relevance of the 90-day safe harbour to investigate liability claims

Another significant reform was the amendment to Fla. Stat. 624.155 to include, for the first time, a safe harbour to protect insurers from a finding of bad faith liability. Specifically, Fla. Stat. 624.155(4), provides that “[a]n 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 which is accompanied by sufficient evidence to support the amount of the claim” (624.155(4)(a), Fla. Stat. (2023)).

A consequential feature of this statute is its express reach over statutory and common law bad faith claims. This is significant because, before HB 837, the Florida Supreme Court had held in Macola v Gov’t Emps. Ins. Co., 953 So. 2d 451 (Fla. 2006), that an insurer’s tender of policy limits after a Civil Remedy Notice (CRN) was filed did not eliminate the underlying common law cause of action for bad faith failure to settle within policy limits. However, 624.155(4)(a) codified a bright line rule that bars statutory and common law bad faith claims 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.

The safe harbour is triggered by the insurer’s receipt of actual notice of a claim, accompanied by sufficient evidence to support the amount of the claim. This language introduces a factual inquiry into what constitutes sufficient evidence. The statute does not define the term, and there are no decisions on what constitutes “sufficient evidence”. This creates a potential area for future litigation.

Finally, in Priola v Progressive Select Insurance Company, 2026 WL 628286 (M.D. Fla. Mar. 6, 2026), the court held that 624.155(4)(a) applies to bad faith suits that accrue after HB 837’s effective date, even if the accident occurred and the policy was issued before the effective date.

When does an insurer receive notice of competing claims?

Florida’s tort reform also added a 90-day safe harbour for carriers in claims involving multiple third party claimants. Section 624.155(6), provides, in pertinent part:

“[I]f two or more third-party claimants have competing claims arising out of a single occurrence… an insurer is not liable beyond the available policy limits… if, within 90 days after receiving notice of the competing claims in excess of the available policy limits… (a) the insurer files an interpleader action under the Florida Rules of Civil Procedure. If the claims of the competing third-party claimants are found to be in excess of the policy limits, the third-party claimants are entitled to a prorated share of the policy limits as determined by the trier of fact”.

The only case interpreting this provision is Great West Cas. Co. v Meralla, No 25-cv-20642, 2026 WL 322702 (S.D. Fla. Feb. 6, 2026), where a court considered what constitutes “notice of competing claims in excess of the policy limits”. In Meralla, Great West issued a commercial lines policy and an excess policy to Mamo Transportation, which together provided limits of USD2 million.

On 24 April 2024, a motor vehicle accident occurred involving Sharon Ferguson and Mamo Transportation’s driver. Ms Ferguson and her minor son, T.F., died on the scene. The three backseat passengers, Lawrencia Ferguson and her two children, suffered serious injuries. The estate of Sharon Ferguson and T.F. filed lawsuits in June 2024. On 5 September 2024, Great West sent a letter to its insureds warning of the possibility of excess exposure. On January 2025, Lawrencia Ferguson, individually and on behalf of her children, filed their lawsuits. Great West’s September 2024 letter provided, in relevant part:

“Mamo Transportation Inc. was involved in an accident on April 24, 2024... The accident caused the deaths of two individuals… three other occupants of the claimant vehicle were also injured. The purpose of this letter is to advise you that based on our investigation to date, it has become evident that the potential for an excess exposure does exist in this matter and the coverage provided by Great West… may be insufficient for the claims that are being pursued in this matter. The damages resulting from this loss may have a value in excess of the policy limits of insurance... Based upon the potential damages and exposure presented by this loss, this shall serve as notice to you of an excess exposure”.

On 12 February 2025, Great West filed its complaint for interpleader pursuant to Section 624.155(6). The estate of Sharon Ferguson argued the interpleader was time barred because Great West communicated its own acknowledgment of excess exposure on 5 September 2024 and filed the interpleader action 160 days later. Great West argued that the September 2024 letter could not trigger the 90-day deadline because it merely warns of potential excess exposure. Rather, Great West argued the 90-day deadline began to run on 14 November 2024, when it received a specific written demand from one of the claimants.

The court rejected Great West’s argument because that would mean that the 90-day deadline is only triggered when the insurer receives notice of competing claims that clearly or likely are in excess of the available policy limits. Citing the statute’s language, the court emphasised that the relevant issue is whether the carrier had notice of competing claims that in total may be in excess of the available policy limits.

While Great West appealed the Meralla decision, the opinion is important for several reasons. First, it illustrates that a carrier’s correspondence and claim investigation can trigger the 90-day deadline to file the interpleader action if the carrier had notice of competing claims that may exceed the policy limits. Second, the evidentiary standard in 624.155(6) is lower than 624.155(4)(a), because the 90-day timeline to file the interpleader action does not require sufficient evidence demonstrating the competing claims may exceed policy limits. Lastly, on the issue of who is a competing claimant, Meralla concluded that it is irrelevant whether one or any of the competing claimants ultimately succeeds in their suit.

Beyond Bad Faith: Three Additional Developments To Watch

Beyond the bad-faith reforms, three areas have generated notable appellate activity in 2026:

• the sequencing of insurance appraisal;
• the shift to modified comparative fault; and
• the changing standards governing punitive-damages claims.

Although the governing rules are becoming clearer, important questions remain.

Appraisal: A Settled Sequencing Rule and Its 2026 Aftermath

The Florida Supreme Court laid the foundation in American Coastal Insurance Company v San Marco Villas Condominium Association, 379 So. 3d 1099 (Fla. 2024), resolving a conflict that had divided Florida’s District Courts of Appeal for more than a decade. The issue was whether a court must resolve an insurer’s coverage defences before compelling appraisal of the amount of loss.

The Court held that a trial court has discretion to compel appraisal before ruling on a pending coverage defence, even where the insurer alleges fraud or a material misrepresentation that could void the policy. In approving this “dual-track” approach, the Court rejected the stricter coverage-first rule. Appraisal remains appropriate only where there is a genuine dispute over the amount of loss, while questions of coverage remain for the court or jury. An appraisal panel cannot determine whether a policy should be voided.

With that sequencing rule established, the 2026 decisions have begun to define its practical operation, showing that courts will strictly enforce the applicable policy language and statutory framework.

In Citizens Property Insurance Corporation v Diaz, 435 So. 3d 1193 (Fla. 3d DCA 2026), the Third District held that an insurer’s own appraisal demand did not trigger the appraisal process because it failed to comply with the policy, which required an estimate of the disputed amount and an itemised description of the damage. In a related development, Hien Tang v Citizens Property Insurance Corporation, 432 So. 3d 674 (Fla. 3d DCA 2026) confirmed that Citizens may require disputes concerning coverage, scope and value to be resolved before the Division of Administrative Hearings. An outright denial of the claim did not waive that right.

Whether an insurer has waived appraisal remains highly dependent on the facts. In People’s Trust Insurance Company v Fernandez, No 5D2025-3174, 2026 WL 2274107 (Fla. 5th DCA 2026), the Fifth District reversed a finding of waiver, holding that an insurer did not act inconsistently with its appraisal right where it pleaded appraisal as an affirmative defence and promptly moved to compel it.

The forward-looking question returns to San Marco. The court relied in part on the absence of policy language governing the timing of appraisal. That reasoning may encourage insurers to adopt express sequencing provisions. It also leaves unresolved whether compelling a full appraisal is appropriate after an insurer has denied a claim entirely on coverage grounds.

Modified Comparative Fault: A Hard Cut-Off for Claimants More Than 50% at Fault

Florida’s shift from pure to modified comparative fault is the tort-reform change with the broadest application to liability claims. Under Section 768.81 of the Florida Statutes, a claimant found more than 50% at fault for his or her own harm may not recover damages. The change applies to causes of action filed on or after 24 March 2023, while cases filed earlier remain subject to Florida’s former pure-comparative-fault regime. See Gonzalez v Seabest, Inc., No 22-cv-62403-ALTMAN/Strauss, 2024 U.S. Dist. LEXIS 141014 (S.D. Fla. Aug. 7, 2024).

The apportionment framework underlying the new bar remains largely unchanged. The factfinder allocates fault among those who contributed to the harm, including qualifying non-party “Fabre” tortfeasors, with the percentages totalling 100%. Each liable party generally pays only its allocated share because Florida has abolished joint and several liability. See Millette v Tarnove, 435 F. App’x 848 (11th Cir. 2011). The statute contains one express exception: the bar does not apply to medical-negligence actions governed by Chapter 766 of the Florida Statutes.

A developing issue lies at the intersection of fault allocation and vicarious liability. Where an employer’s liability is based on a theory such as negligent hiring, Florida authority has generally treated that exposure as derivative of the employee’s conduct rather than as a separate share of independently allocable fault. See Grobman v Posey, 863 So. 2d 1230 (Fla. 4th DCA 2003).

In Jackson v Shipes, No 4:25cv225-RH-MAF, 2026 LX 164128 (N.D. Fla. Feb. 27, 2026), a federal court applying Florida law predicted that an additional share of fault could not be assigned to the employer on top of the employee’s share, while acknowledging that the Florida Supreme Court has not squarely resolved the issue. The question bears watching because its resolution will affect whether, and to what extent, fault and resulting exposure may be allocated among defendants in multiparty liability cases.

Punitive Damages: A Clarified Pleading Threshold and a New Appellate Route

Punitive damages have become one of the most active areas of Florida civil practice. A 2022 amendment to Florida’s appellate rules permits an immediate appeal from an order granting or denying leave to assert a claim for punitive damages. Those orders are reviewed afresh on appeal, and the new appellate route has produced a significant body of decisions.

The principal development in 2026 came when the Florida Supreme Court resolved a conflict among the District Courts of Appeal concerning the evidentiary showing required to plead punitive damages. In Perlmutter v Federal Insurance Company, 434 So. 3d 681 (Fla. 2026), the Court held that the “clear and convincing evidence” standard, which a claimant must ultimately satisfy at trial, does not apply when the trial court decides whether to permit a punitive-damages claim.

At the pleading stage, the claimant need only make a reasonable evidentiary showing from which a reasonable person could conclude that the defendant engaged in intentional misconduct or gross negligence. The Court therefore rejected the more demanding preliminary showing adopted by one District Court of Appeal and established a lower, more claimant-friendly threshold for seeking punitive damages.

Perlmutter also has particular significance for insurers defending claims against employers. To plead punitive damages against an employer based on vicarious liability, a claimant must make a reasonable showing as to the separate statutory requirements in Section 768.72(3) of the Florida Statutes, which concern the employer’s own participation in, condonation of or ratification of the underlying conduct.

This creates an important distinction between ordinary fault and punitive exposure. As decisions such as Jackson illustrate, an employer may not receive a separate allocation of ordinary fault in addition to the employee’s share. Nevertheless, the employer may still face punitive exposure based on its own statutorily specified conduct. For insurers evaluating potential exposure, the combination of a more accessible pleading threshold and a separate route to punitive liability against an employer warrants close attention.