On August 15, we wrote a blog post (which can be accessed here) on how the eleventh circuit certified to the Supreme Court in Florida the issue of whether Florida's pre-suit process of entrepreneurship, cf. 558 in Florida statutes, constitutes a "suit" according to CGL's political language, which would trigger the insurer's duty of defense. On October 25, various construction industry organizations and a nonprofit group of policyholders, United Policyholders, urged the Florida Supreme Court to decide on Altman Contractor Inc.'s ("Altman") interpretation that a building violation notice issued under Chapter 558 constitutes a "suit" according to CGL's policy, since such reading would promote policyholders and insurers to settle disputes with the underlying plaintiff and that CGL's policies should be widely interpreted to provide coverage for the administrative procedure.
First, the construction industry associations argued that a judgment contrary to Altman would prevent policyholders and their insurers from settling disputes out of court because no side would have a desire to cooperate: the policyholder would dispute or not respond to chapter 558 messages to trigger the obligation to defend, which would force the underlying plaintiff to bring the action and the insurer would not be involved in the Chapter 558 process between the policyholder and the underlying plaintiffs, since they would have no contractual obligation entitling them to defend the claims of the claims.
In addition, trade associations noted an amendment from 2015 to Chapter 558 which they claim shows that the Charter was intended to allow a policyholder and their insurers to resolve conflicts of construction conflict through confidential conciliation negotiations. The organizations argued that ruling Chapter 558 is not a suit that would not be an obligation to defend is against the intention of Florida Legislature to make both the insurer and the insurer meaningful to participate in the administrative process to resolve the conflict between the underlying plaintiff and the policyholder.
Second, the United States asserted that the Florida Supreme Court would rule Altman for today's CGL policy to provide broad coverage for administrative procedures, such as a Chapter 558 procedure. United policyholders argued that CGL in the dispute ambiguously defined a "civil procedure" that should not be read to cover only arbitration or an alternative dispute settlement procedure in which the insurer agrees. The group claimed that insurers would not be able to limit the scope of a "suit" in the insurance terms simply by abiding by the consent of the policyholder's settlement under ch. 558.
If the Florida Supreme Court finds that a Chapter 558 process is a "Suit", this will greatly affect the coverage available to Florida's engineering technology. We will continue to monitor this matter until the Florida Supreme Court retrieves its verdict.