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Florida appeals court limits FIGA exposure to settlement lawyer fees
The Fourth District Court of Appeal reversed a Broward County order that required FIGA to pay the full settlement amount, including a portion earmarked for attorneys' fees.
Florida's Fourth District Court of Appeal narrowed what the Florida Insurance Guaranty Association, FIGA, must pay under a settlement, finding that a payment labeled "inclusive of attorneys' fees" did not automatically put those fees into FIGA's obligation. The ruling arose from a dispute over a settlement between FIGA and policyholders who sought attorneys' fees in their complaint, with the settlement agreement later splitting the money into two portions, one for the policyholders and another for their counsel.
According to Insurance Business, the trial court in Broward County sided with the policyholders by denying FIGA's motion to enforce the settlement as FIGA argued, while granting the insureds' motion and ordering FIGA to pay the entire settlement, including the fees portion. FIGA appealed, arguing that attorneys' fees are not part of the covered claims it is responsible to fund.
The appeals court reversed, citing its own prior rulings from June and July 2026 and aligning with a broader line of guaranty-association decisions. It remanded with instructions to vacate the order forcing FIGA to pay the whole amount and to grant FIGA's motion to enforce the settlement instead, while noting the decision was not final until any timely motion for rehearing is ruled on.
Insurance Business also highlighted a drafting takeaway for claims and legal teams: simply labeling a payment as "inclusive of attorneys' fees" is not enough to ensure those fees fall within a guaranty association's covered-claim responsibility, because the court treated the fees as separate from the covered claim even though the overall settlement payment was one total.