Article ID: 17e2db1a29bea2077927c0f7564b975edb496091468b90db8648c713f7cb81c3
Source ID: secondary:businessinsurance.com
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URL: https://www.businessinsurance.com/court-revives-restaurants-bad-faith-suit-against-insurer/
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Court revives restaurant’s bad faith suit against insurer - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Court revives restaurant’s bad faith suit against insurer by Gavin Souter Coverage Disputes , P/C Insurers Jun 11, 2026 An insurer that pays a breach of contract judgment can still face a bad faith lawsuit over its handling of the claim, a Florida appeals court ruled Wednesday. In Healthy Food Experts LLC v. AmGUARD Insurance Co. , the Florida Fourth District Court of Appeal reversed a lower court’s dismissal of the restaurant’s bad faith action, holding that a policyholder may pursue extra-contractual damages allegedly caused by an insurer’s bad faith, even though contractual damages were fixed in the underlying coverage case. The dispute arose from the 2017 collapse of the dining room ceiling at a restaurant insured by AmGUARD. After investigating the loss, the insurer denied coverage for business personal property and business income claims, agreeing to pay only for food spoilage losses. According to the opinion, AmGUARD did not disclose reports from its engineer and field adjuster indicating that the collapse was sudden and accidental, and that it was potentially covered under the policy. In 2018, the restaurant sued for breach of contract. A jury found that defective construction and hidden decay caused the collapse and awarded the policyholder $31,330 in damages. After AmGUARD’s unsuccessful appeal, it paid the judgment with interest. The restaurant then filed a first-party bad faith suit, alleging the insurer wrongfully denied the claim, concealed information supporting coverage and failed to resolve the dispute after receiving a statutory notice that gave it 60 days to correct its handling of the claim. The trial court dismissed the case, finding that under Fridman v. Safeco Insurance Co. of Illinois , the jury verdict barred any further recovery. The appeals court disagreed, holding that while contractual damages cannot be relitigated, Fridman does not preclude claims for consequential damages stemming from an insurer’s alleged bad faith. It also rejected AmGUARD’s argument that a first-party bad faith claim requires an excess judgment exceeding policy limits and said an insurer cannot avoid potential bad faith liability by paying a claim only after an unsuccessful appeal. The court reversed the dismissal and remanded the case for further proceedings. Related News Truck maker wins partial appeal in D&O coverage dispute June 11, 2026 Paw and order June 11, 2026 Insurer must defend COVID-19 tuition refund suits: Appeals court June 11, 2026 Willis Re hires former Guy Carpenter Bermuda chief June 11, 2026 California cumulative trauma comp claims rise sharply June 11, 2026 Amwins, Dragoneer make bid $5.4B for Steadfast June 11, 2026 Mexico doubles parametric cat cover June 11, 2026 Gallagher takes majority stake in Saudi broker June 11, 2026 Quake to result in limited insured losses: A.M. 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