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Insurance Agent Negligence: Florida Court of Appeals Reverses Lower Court Dismissal


Recently, the Third District Court of Appeal for the state of Florida issued an instructive decision in the case of Kendall South Medical Center v. Consolidated Insurance Nation. This case involved an insurance agent negligence claim. At Geyer Fuxa Tyler, our Broward County property insurance attorneys have extensive experience handling these types of claims. Here, we discuss some of the most important facts of this case. 

Case Analysis: Kendall South Medical Center v. Consolidated Insurance Nation

The Property Damage 

Kendall South operates a medical facility in Miami-Dade County. The facility is leased from another property owner. In January of 2013, while renovation work was being performed on the sprinkler system of the property, a major leak sprouted. As a result, the building suffered approximately $260,000 in water damage.

The Property Insurance Policy 

Kendall South had a policy that provided coverage for up to $100,000 in the circumstances in this case. Or at least, that is what the company claims that it believed. In court documents, Kendall South stated that it expected to receive compensation for the full policy limit, as their damages well exceeded $100,000. However, due to a coinsurance clause in the contract, only $16,562.67 was paid out by their insurance company.

The Conflict Over the Policy 

Kendall South filed a claim against its insurance company on the grounds that it was materially misinformed about the terms of its property insurance coverage policy. Specifically, Kendall South pointed to a statement that was allegedly made by one of the company’s insurance agents that led management to believe that they had actually acquired $100,000 in insurance coverage. Kendall South argued that the insurance company’s representative had a legal duty to clearly explain the terms of the policy. The insurance company, Consolidated Insurance Nation, countered that the coinsurance clause was clearly explained within the contract.

The Court Decision 

The lower court in this case originally dismissed Kendall South’s argument on the grounds that it failed to state a valid cause of action for which legal relief could be granted. Upon review, the Third District Court of Appeal reversed that decision. The appeals court did this because it determined that the company had sufficiently stated a cause of action for an insurance agent negligence claim.

Under Florida law, insurance company representatives have a legal duty properly explain the coverage that is being offered and to ensure that the coverage that is actually provided meets that policyholders reasonable expectations. As such, the appeals court reversed the dismissal and remanded the case for additional proceedings.

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