As is well known, on March 15, 2018, Miami-Dade County experienced one of the most horrific incidents in recent memory when a 175-foot-long section of the FIU-Sweetwater University pedestrian bridge collapsed onto Tamiami Trail. The collapse of the 950-ton structure resulted in six deaths, eight injuries, and more than 20 lawsuits. Unfortunately, as litigators for all sides continue to zealously advocate on behalf of their clients and time passes, the amount of insurance available to those who were affected by the horrifying incident will dwindle due to eroding insurance policies. As explained below, eroding insurance policies create a conflict between an insurance carrier and its insured as such policies tend to force an insurance company to make a decision between protecting its insured and offering the available limits as a settlement or taking the risk of defending its insured as available policy limits diminish. The decision made by the insurance carrier can result in severe consequences for all parties involved.

General liability insurance policies usually provide that the insurance carrier bear the duty to provide a defense to its policyholder against the alleged liability. In addition, general liability insurance policies impose the duty to indemnify the insured on the insurance carrier by paying for the damages that arise out of the insured’s liability. Typically, the insurance carrier’s obligation to defend terminates once the applicable limits of liability provided by the insurance policy are exhausted by satisfaction of a judgment or payment of damages. A majority of liability insurance policies treat defense expenses as separate and apart from the available policy limits. As a result, insurance carriers may be liable to continue their duty to defend and protect the insured from incurring substantial defense costs when the insured is unable to enter into reasonable settlement.