6.3 Florida General Liability Insurance

General Liability and Professional Liability in Florida

A Commercial General Liability (CGL) policy protects a business against third-party claims for bodily injury, property damage, and personal and advertising injury (libel, slander, false arrest, advertising offenses). The standard CGL provides three coverages: Coverage A (BI and PD), Coverage B (personal and advertising injury), and Coverage C (medical payments). It is typically written on an occurrence basis — covering injuries that occur during the policy period no matter when the claim is reported — though claims-made forms with retroactive dates exist for higher-hazard exposures.

Professional liability (also called errors and omissions, or E&O, and medical malpractice for physicians) is a separate line because the CGL excludes liability arising out of rendering or failing to render professional services. A general liability policy covers a slip-and-fall in an architect's lobby; only a professional liability policy covers the architect's negligent design.

Florida producers must also understand that liquor-liability, pollution, and employment-practices exposures are usually carved out of the CGL and covered by separate forms or endorsements.

The 2023 Tort Reform: Statute of Limitations and Comparative Negligence

Florida's liability landscape changed sharply with House Bill 837, signed into law and effective March 24, 2023. Two changes are heavily tested.

Statute of limitations. For general negligence causes of action accruing on or after March 24, 2023, the limitations period was cut from four years to two years. A plaintiff who once had four years to file an ordinary negligence suit now has only two. Claims that accrued before that date keep the old four-year window. This shorter clock pressures claimants to act fast and changes how insurers reserve and investigate.

Comparative negligence. Florida abandoned its long-standing pure comparative negligence rule and adopted modified comparative negligence under s. 768.81. Under the prior pure system, a plaintiff 99% at fault could still recover 1% of damages. Under the new modified (51%) rule, a plaintiff found more than 50% at fault recovers nothing; at 50% or less, recovery is reduced by the plaintiff's own percentage of fault. Medical-malpractice claims are a notable exception still governed by the prior framework.

• Pre-3/24/2023 negligence: 4-year filing window, pure comparative fault.
• On/after 3/24/2023 negligence: 2-year filing window, modified (51%-bar) comparative fault.

Bad Faith and the End of Joint-and-Several Liability

Bad-faith law governs an insurer's duty to handle and settle claims in good faith — historically exposing carriers to damages above the policy limits when they unreasonably refused a reasonable settlement and a verdict exceeded the limit. HB 837 reformed this area. Mere negligence is no longer enough to establish bad faith; the claimant must show the insurer breached its good-faith duty.

Critically, an insurer that tenders the policy limits (or the demand amount) within 90 days of receiving actual notice of a claim with sufficient evidence can avoid common-law and statutory bad-faith liability for that claim. The reform also allows a comparative-fault reduction of bad-faith damages where the insured or claimant's own conduct contributed to the excess judgment.

Many candidates still expect Florida to apportion damages jointly, but Florida abolished joint-and-several liability for negligence years ago (the 2006 reforms). Today, under s. 768.81, the court enters judgment against each defendant only for that defendant's own percentage of fault — a defendant 20% responsible pays 20% of the damages, not the entire award because a co-defendant is insolvent.

The combined effect of these reforms — shorter limitations, a 51% fault bar, tougher bad-faith standards, and several-only liability — has materially reduced Florida's litigation exposure and is reflected in liability underwriting and pricing.

Damages, Punitive Limits, and Limits-of-Liability Structure

Liability claims resolve into two damage buckets. Compensatory damages make the claimant whole and split into economic (medical bills, lost wages, repair costs) and non-economic (pain, suffering, mental anguish). Punitive damages punish especially egregious conduct; in Florida they generally require clear and convincing evidence of intentional misconduct or gross negligence and are statutorily capped — typically the greater of three times compensatory damages or $500,000, with higher caps for financial-motive conduct.

HB 837 also tightened the evidence used to prove medical damages, limiting recovery toward amounts actually paid rather than inflated "sticker" charges.

The limit structure of a liability policy is critical for the exam:

A single combined-limit liability policy contrasts with split limits seen on auto. Defense costs in a CGL are usually paid in addition to the limits (outside the limits), unlike many professional-liability forms where defense erodes the limit. Because Florida's reforms reduced runaway verdicts, businesses still need adequate per-occurrence and aggregate limits plus an umbrella to cover catastrophic claims that exhaust the underlying CGL — the producer's job is to match those limits to the client's true exposure rather than buying the statutory or contractual minimum.