Omnibus Insureds & Their Entitlement to Attorney’s Fees Under Florida’s Insurance Code
By Kluger Kaplan August 3, 2016
By Christina M. Himmel
Let’s face it: pursuing a lawsuit will require both time and money. To that end, one of the primary concerns before pursuing litigation is whether attorney’s fees are recoverable from the opposing party. A party can only recover attorney’s fees if authorized by contract or statute. Florida’s Insurance Code provides a right to attorney’s fees for certain classes of people, including named insureds and named beneficiaries. The subject of this blog focuses on the provision in Florida’s Insurance Code that allows an “omnibus insured” to recover attorney’s fees. Through this provision, a beneficiary that is not explicitly named in an insurance policy but is nonetheless expressly covered by a provision in that policy may be able to recover attorney’s fees from the insurer.
More specifically, pursuant to Fla. Stat. § 627.428(1), a third-party that qualifies as an “omnibus insured” is entitled to recover attorney’s fees from the insurer if it prevails in an action against the insurer. Section 627.428(1) states as follows:
- Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.
Thus, according to the plain language of the statute, “named insureds,” “omnibus insureds,” and “named beneficiaries” are entitled to the benefits of § 627.428. Prior to 1982, Fla. Stat. § 627.428 only entitled “an insured or named beneficiary” to recover attorney’s fees; however, the Florida Legislature added the phrase “omnibus insured” to the statute in 1982 to clarify and adopt a more expansive interpretation of “insured” that had developed in the lower courts. However, the Florida Legislature did not define the phrase “omnibus insured.” Case law has stated that it is a phrase that is “frequently used to refer to an individual insured under an omnibus clause of an insurance policy.” State Farm Fire & Cas. Co. v. Kambara, 667 So. 2d 831, 833 (Fla. 4th DCA 1996). The Florida Supreme Court has explained the definitions as follows:
- A “named insured” is one who is “designated as an insured” under the liability policy. Romero v. Progressive Southeastern Ins. Co., 629 So.2d 286, 288 (Fla. 3d DCA 1993). An “omnibus insured” is one who is covered by a provision in the policy but not specifically named or designated.
Cont’l Cas. Co. v. Ryan Inc. E., 974 So. 2d 368, 374 (Fla. 2008).
For example, in Kambara, a tenant suffered injuries in his apartment complex, which was insured by a premises liability policy issued by State Farm. After State Farm denied the tenant’s claim, the tenant sued State Farm for reimbursement of his medical expenses under a provision in the premises liability policy that read:
- We will pay medical expenses for bodily injury caused by an accident on your premises you own or rent, on ways next to the premises you own or rent, or because of your operations. The accident must take place in the coverage territory during the policy period.
The Fourth District Court of Appeal held that the tenant was entitled to attorney’s fees under Fla. Stat. § 627.428 because he qualified as an omnibus insured. The court explained the distinction between a third party beneficiary and an omnibus insured as follows:
- An individual can be both an omnibus insured seeking first-party benefits under an insurance contract and also be a third-party beneficiary under the liability provisions of the coverage when suing the tortfeasor. In the case of the omnibus insured, the individual’s rights are derived directly from his or her status under a clause of the insurance policy without regard to the issue of liability; if the individual fits within the class he or she is entitled to first-party benefits.
In short, a third party’s qualification as an omnibus insured under Fla. Stat. § 627.428 depends on whether the third party derives his rights directly under a specific clause in the insurance policy. If so, the third party may be considered an omnibus insured and fall within the class of persons entitled to recover fees.