Colodny Fass Hosts Webinar on Property Insurance Coverage, Litigation and Legislation

May 15, 2020

On May 15, 2020, Colodny Fass held the third in its series of “Hurricane + Pandemic” webinars on issues relating to the COVID-19 pandemic and the upcoming hurricane season. This webinar was moderated by Katie Webb, head of Colodny Fass’ Governmental Consulting practice, and featured presentations on legislative proposals and issues that might be or have been raised during the pandemic from Florida state Senator Jeff Brandes, Florida Justice Reform Institute President William Large, and Colodny Fass shareholder Matt Scarfone

Senator Jeff Brandes, a Republican from Pinellas County, told the group that he expected “significant” impacts to the state budget for the 2020-2021 fiscal year that begins July 1. He believes Governor Ron DeSantis may veto between $500,000 and $1 billion in budget line items. Such vetoes could include funds for salary increases for state employees or funds for affordable housing trust funds. He does not believe the governor will veto funds for teacher pay raises because it was a priority issue for the governor. He believes a special session will not be required until this fall due to expected vetoes and additional funding from the federal government.

Senator Brandes believes a special session may be called in November. He expects a “massive disruption” in the Florida insurance market due to the pandemic and due to insurance litigation. He called possible liability for COVID-19 claims a “Sword of Damocles” threatening Florida businesses and insurers. To deal with the problems, Senator Brandes intends to file legislation that will give the governor power to limit tort liability during the pandemic. He said that other states already have similar laws to give their governors that authority. He will also consider legislation to create a “safe harbor” to protect businesses from liability if they follow state guidelines to protect employees and customers. He believes Florida’s current tort environment is unsustainable but believes there is opportunity for tort reform over the next two years while the Senate is led by incoming President Wilton Simpson, a Republican businessman representing Citrus, Hernando, and Pasco counties.

William Large told the group that litigation over pandemic issues has already started in Florida and in other states. He cited examples of cases by restaurant owners for business interruption, by students for a refund of fees paid for services that were not provided after online classes were started, and by workers against the owners of meat packing companies for failing to maintain safe workplaces. Large is lobbying the governor to use his emergency powers to expand the “Good Samaritan” law and expand sovereign immunity protection for medical providers working during the COVID-19 crisis. He also suggested ideas for legislation to address the crisis including:

  • Providing that there is no common law tort relating to the wrongful transmission of an airborne respiratory disease;
  • Providing that a plaintiff must prove various elements of a COVID tort claim against a business by clear and convincing evidence;
  • Providing a business is only liable if premises owner had actual knowledge of an infected employee; and
  • Immunity from certain liability except in cases of gross negligence, intent to harm, or recklessness.

Colodny Fass shareholder Matt Scarfone reviewed some issues that he expects will be raised during litigation related to the pandemic. He explained that business interruption coverage and property insurance coverage may only attach if there is physical damage to the property. To avoid those policy provisions, plaintiff lawyers have convinced some jurisdictions to include provisions declaring the virus to be physical damage in emergency order declarations. Scarfone noted that existing case law requires a court to use common definitions of policy terms with resort to dictionary definitions rather than resorting to other sources for more technical or specialized definitions. Scarfone explained that some policies contain specific exclusions for viruses. Some policies also contain limitations on liability for measures taken to protect property from further damage. He warned the group that businesses should be aware of guidance issued by the state and local authorities.

To access the recording of this webinar, click here.

The statements made in this webinar are for informational purposes only and should not be construed as legal advice. Please consult with your own attorneys regarding any legal issues addressed in this webinar.