Publications

A Florida appellate court upheld a homeowner’s post-loss assignment of policy benefits to a water removal company despite her failure to obtain insurer consent.  Bioscience W., Inc. v. Gulfstream Prop. & Cas. Ins. Co., 2016 WL 455723 (Fla. Dist. Ct. App. Feb. 5, 2016).

When a homeowner suffered water damage, she hired Bioscience to perform emergency water removal services.  She executed an “Assignment of Insurance Benefits” authorizing Bioscience to bill and to collect payment directly from Gulfstream, her property insurer.  When Gulfstream denied the homeowner’s claim, Bioscience, as assignee of the right to recover policy benefits, sued for breach of contract.  A Florida trial court granted Gulfstream’s motion for summary judgment, finding that state law and the insurance policy prohibited the assignment of benefits without insurer consent.  The appellate court reversed.

The policy provided that “[a]ssignment of this policy will not be valid unless we give our written consent.”  The appellate court ruled that this provision prohibited assignment of the entire policy but not the assignment of financial proceeds derived from a benefit of the policy.  On this basis, the court upheld the assignment because it involved an “assignment of a benefit under the policy to Bioscience, namely a right to seek payment for the mitigation services it rendered.”  In addition, the court noted that the “loss-payment” provision of the policy supported its holding because the provision recognized the potential need to pay third parties that might be “legally entitled” to payment under the policy.  Finally, the court noted that even where policies contain specific anti-assignment clauses, courts routinely allow the assignment of policy benefits after a loss has occurred.