Can FIGA Refuse to Defend the Insured ?
In Florida Insurance Guaranty Ass'n v. Jones, 847 So. 2d 1020 (Fla. 1st DCA 2003), the Florida Insurance Guaranty Association (FIGA) concluded that the claims against its insured were not covered by the FIGA Act. FIGA therefore refused to defend them. 847 So. 2d at 1021.
After a default judgment was entered against the insured, the insured's assignee brought suit against FIGA for failing to defend the claims. Id.
The district court disallowed recovery after concluding that the assignee's claims were "not covered obligations under the FIGA Act and were barred by FIGA's immunity protection." Id. at 1022 (citing Fernandez v. Florida Insurance Guaranty Ass'n, 383 So. 2d 974 (Fla. 3d DCA 1980)).
Florida Insurance Guaranty Ass'n v. Giordano, 485 So. 2d 453 (Fla. 3d DCA 1986), the allegedly conflicting case, involved a different issue.
In that case, FIGA did not dispute that the claim was covered. 485 So. 2d at 456.
Rather, it refused to defend the claim because its insured was incorporated in Illinois.
FIGA argued that "it was an 'excess' carrier over the Illinois Guaranty Fund's limits and that it would decide what to do once IGF paid its statutory limits." Id. at 455 n.1.
The fact that FIGA conceded coverage was critical to the district court's conclusion that FIGA could be sued for refusing to defend its insured: "Since FIGA did not dispute that the wrongful death action was a 'covered claim,' then under the statute, FIGA had no discretion as to whether it would defend the insured. . . . FIGA was under a statutorily imposed duty to continue the defense of the insured." Id. at 456.