Navigating Florida Bad-Faith Law: Insurers Seek Clarity on Tender Clock

The complexity surrounding Florida bad-faith law has propelled National Fire & Marine Insurance Company into federal court, seeking a definitive ruling on a pivotal statutory interpretation. A recent tragic incident underscores the critical importance of clarity within the state’s tort reform, particularly concerning the commencement of the crucial 90-day “safe harbor” clock.

The Core Dispute and Its Origins

A somber event from April 22, 2025, initiated the legal challenge now unfolding in Miami federal court. On that date, a 5-year-old child, identified as M.A.B. in court filings, tragically drowned in the swimming pool at the Tradewinds Apartment Hotel in Miami Beach. This incident subsequently triggered a liability claim against South Beach Group Hotels, the property’s insurer.

National Fire & Marine Insurance Company had issued a commercial general liability policy to South Beach Group Hotels, providing coverage of $2,000,000 are managed by Berkshire Hathaway Specialty Insurance Company on National Fire’s behalf. The insurer’s subsequent actions, specifically its tender of the $2 million policy limits on October 15, 2025, with confirmation five days later, form the crux of the current legal battle. Why did National Fire believe this tender was “well within the 90-day safe harbor window”?

The estate of M.A.B. challenged this timing on November 4, 2025, asserting that the clock began in April 2025 with the drowning incident itself. South Beach Group Hotels introduced a third potential start date: May 9, 2025, the day a joint inspection of the property occurred. This divergence in interpreting the critical 90-day window highlights a significant ambiguity within Florida’s relatively new bad-faith statutes, one that could have far-reaching implications for all insurers operating in the state.

Decoding Florida’s Tort Reform

Florida’s 2023 tort reform was enacted, in part, to offer insurers a protective mechanism – a “shield” against bad-faith claims if they acted promptly. The specific provision at the heart of this dispute is Fla. Stat. § 624.155(4)(a), which states that a bad-faith action is barred 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.” This language, intended to provide clarity, has paradoxically introduced significant uncertainty.

The central question revolves around the phrase “actual notice of a claim which is accompanied by sufficient evidence to support the amount of the claim.” Does “amount of the claim” necessitate a specific dollar demand from the claimant to trigger the 90-day period, or can mere notification of a loss, even without a quantified demand, start the clock? National Fire argues that a specific dollar demand is essential, noting that no such demand arrived until May 13, 2026. Without a concrete figure, how could an insurer possibly tender “the lesser of the policy limits or the amount demanded”?

The intent behind the tort reform was to encourage swift resolution and penalize deliberate delays, not to ensnare insurers in a Catch-22. However, if the 90-day period can commence before a claimant articulates a monetary value, insurers could face bad-faith exposure for a tender that, by definition, requires a specific demand that hasn’t yet been made. This statutory wording has left a critical gap in interpretation, prompting National Fire to seek judicial guidance.

Industry Implications and Ambiguity

The ramifications of this legal challenge extend far beyond National Fire’s specific case. For claims teams across Florida, the timing question is paramount. If the 90-day clock can begin ticking before a claimant names a specific figure, insurers face an impossible dilemma. How can they comply with a “safe harbor” provision that requires tendering “the lesser of the policy limits or the amount demanded” when no amount has been demanded? This effectively creates a scenario where an insurer could be exposed to liability beyond policy limits for an alleged bad-faith act that, by statutory definition, cannot yet be performed.

This ambiguity directly undermines the protective intent of the 2023 tort reform, which sought to establish clearer boundaries for bad-faith litigation. Instead, it introduces a dangerous grey area, making accurate risk assessment and timely claims handling exceedingly difficult. Insurers must constantly evaluate their exposure, yet this statutory vagueness leaves a critical variable open to retroactive interpretation.

The core issue here is not merely a procedural technicality, but a fundamental question of fairness and legal predictability in the insurance sector. Clarity is not just a preference; it is a necessity for a functioning claims environment.

The lack of a specific dollar demand, or at least a clear framework for what constitutes “sufficient evidence to support the amount of the claim” in the absence of a demand, creates a precarious environment. Insurers are left to guess when their 90-day window begins, potentially exposing them to significant financial penalties. This situation demands a definitive judicial or legislative resolution to ensure the integrity of the Florida bad-faith law.

Florida Bad-Faith Law: What Happens Next?

As of now, the allegations in National Fire’s complaint have not been tested, and no court has issued a definitive ruling on the correct interpretation of Fla. Stat. § 624.155(4)(a). This means the insurance industry in Florida currently operates under a significant cloud of uncertainty regarding a critical aspect of claims handling. The outcome of National Fire’s declaratory judgment action will be closely watched, as it has the potential to set a crucial precedent for all future bad-faith claims in the state.

Should the court side with National Fire’s interpretation, affirming that the 90-day clock only starts upon receipt of a specific monetary demand, it would provide much-needed clarity for insurers. Conversely, a ruling favoring an earlier trigger—such as the incident date or initial notice of loss—would necessitate a complete re-evaluation of claims handling protocols across the industry. Insurers would then need to explore proactive measures to solicit specific demands earlier in the claims process or risk premature bad-faith exposure. What does this mean for your claims team?

For insurers, the concrete takeaway is clear: Stay abreast of this litigation and any subsequent judicial pronouncements or legislative adjustments. In the interim, maintaining meticulous documentation of all communications, especially those related to notice of claim and any attempts to solicit a quantified demand, is more critical than ever. This ongoing legal battle over the Florida bad-faith law underscores the dynamic nature of insurance regulation and the constant need for vigilance and adaptability within the sector.

Insurance Bad-Faith Litigation – Disclaimer

This article provides general insights into a specific legal dispute regarding Florida’s bad-faith law and its interpretation. It is not intended as, and should not be relied upon for, legal or financial advice. Readers facing similar circumstances, particularly concerning insurance claims or litigation, should consult a qualified legal professional for advice tailored to their specific situation, as outcomes can vary significantly based on individual facts and judicial rulings.