Florida Supreme Court Holds Pre-Suit Construction Defect Notice Can Qualify As A 'Suit' Under CGL Policy

The Florida Supreme Court recently held that the pre-suit process for construction defect claims under Florida Statutes Chapter 558 constitutes a "suit" under the standard ISO CGL definition as an "alternative dispute resolution proceeding" that may trigger the duty to defend. Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., 2017 WL 6379535 (Fla. Dec. 14, 2017).

The insured general contractor was served with statutorily required Chapter 558 pre-suit notices, claiming construction defects in a high-rise residential condominium project. The insured notified its insurer and demanded defense and indemnity. The insurer refused to defend on the ground that the notices did not constitute a "suit." The insured settled the claims without the insurer's involvement and sought a declaration that the insurer owed a duty to defend and indemnify it. The insured and the insurer cross-moved for summary judgment on whether the insurer's duty to defend was triggered by the Chapter 558 notices of claim. Under the policy, the term "suit" was defined as "a civil proceeding in which damages because of 'bodily injury,' 'property damage' or 'personal and advertising injury' to which this insurance applies are alleged." The definition included "an arbitration proceeding" or "any other alternative dispute...