Fla. insurance defense lawyers scramble amid coverage crisis, tort reform
The volume of insurance-carrier lawsuits is down in the Sunshine State.
Florida’s ongoing insurance crisis is causing insurers to rely less on outside counsel, as their peers go insolvent and insurance rates explode across the state.
As underwriting losses have been piling up in the billions in Florida, thanks to hurricanes and flooding, the state has seen nearly a dozen insurers depart over the last two years, and other others have been liquidated. In addition, Gov. Ron DeSantis signed a bill in 2023 that limits the ability to sue insurers over unpaid claims. The mix has led to less insurance defense work for some law firms, according to those competing in the space.
“We anticipate a downturn in the number of first-party property lawsuits to be filed,” says Aram Megerian, head of Cole, Scott & Kissane’s first-party trial and coverage division. “We’ve already seen, as reported by the Department of Financial Services, an over 25% reduction across the board, and [fewer] lawsuits being filed against the top 25 insurers in the state of Florida for homeowners’ claims.”
That decrease is already being felt by Megerian’s firm with regard to 2022 Hurricane Ian-related filings.
“Twelve to 18 months out from Hurricane Ian, we would have normally seen a much larger volume of cases in this time frame, and it’s just not there,” Megerian said. “There are still losses. … But it’s not the same as after Hurricane Irma in 2017.”
For that reason, his firm, which has historically been known for its significant presence within Florida’s insurance defense market, is training some lawyers on how to work within other practices. The firm has been ahead of the lag in litigation, as Megerian himself worked to lobby for the tort reform measures.
As it shifts away from insurance litigation, Cole Scott has been looking to shift toward construction law. But the firm is still landing insurance defense work cases, albeit at a slower rate.
Beyond a decrease in lawsuits, insurers have also been going more in-house with their attorney needs, according to Megerian and other lawyers within the sector. That’s forced firms to reorient themselves internally. “I do sense that there’s other defense firms who may have had to change their practices a little or a lot, depending on how big they were in the dawn of this,” Megerian says.
However, his firm is still being asked to assist with smaller matters, even if they’re not what he referred to as the “complicated cast-iron cases or trial cases.”
On the flip side, he’s also seen some insurers shrink their in-house capabilities because of how hard it is for them to hire salaried attorneys they can feel comfortable with.
Firms are still hiring
Insurers carriers that do still need outside counsel for are being more selective about which law firms they work with, according to Bressler, Amery & Ross executive committee member Hope Zelinger.
Zelinger’s firm just increased its presence in the state as it continues getting work from certain insurers that are narrowing their list of preferred firms. In response, it’s looking to continue hiring Florida lawyers with insurance defense expertise and other complementary skills that insurers need.
If anything, Bressler Amery is seeing an uptick in insurance defense work because the firm is selected on a more exclusive basis, according to Zelinger.
Weiss Serota Helfman Cole & Bierman is another local firm that’s adding talent in the space. Just this week, it announced the addition of partner Diana Weller and two counsels that all work on insurer-side defense.
But for Weiss Serota managing director Mitch Burnstein, those hires did not hinge on the insurance industry generating more work.
“Obviously, we’re very closely monitoring last year’s tort reform legislation, but we never modeled out what that was going to do to the industry. We just knew that this industry has been around for a long time, and it’s going to continue to be around for a long time,” Burnstein said. “If we could identify a star doing that kind of work, we want to bring her over.”
Particularly because Weiss Serota’s insurance practice is so broad, it isn’t disproportionately affected by industry trends, according to Burnstein.
Weller’s hiring follows the firm’s July 2023 hiring of Jonathan Brown, who also works within insurance defense. Brown’s practice did so well that Burnstein said it was partly the reason he brought on Weller and her team this year.
“Jonathan hit the ground running and he’s been a fabulous addition. As Jonathan has proven himself here, that made Diana even more attractive to us,” he said. ”Their practice areas mesh perfectly.”
Similarly, Hinshaw & Culbertson has already added a handful of associates and two partners with some form of experience in insurance litigation this year alone in South Florida and Tampa. That number is a ramp-up compared with its addition of four total insurance litigation attorneys last year throughout the state, according to a firm spokesperson.
The firm is continuing to look for opportunities to add more talent in the future, according to the firm’s Miami-based insurance practice co-chair Pedro Hernandez.
The firm did not comment on whether those new hires will focus on Florida-based clients or national ones or whether those hires came as a response to changes in litigation volume, citing confidentiality concerns. But the hiring is indicative of the firm’s appetite to keep the practice strong within Florida.
A number of other insurance defense firms refused to comment on how the insurance crisis and tort reform have affected their insurance defense practices in Florida.
However, the Florida Office of Insurance Regulation announced just this month that it approved the addition of eight new property and casualty insurers that can now practice within the state, a sign that the market may continue demanding plenty of insurance-related legal work after all.
“Florida’s insurance market continues to strengthen, showing signs recent legislation is having positive impacts to the property insurance market,” Insurance Commissioner Michael Yaworsky said in a statement.
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