Narrow Promissory Estoppel Exception to Create Insurance Coverage

David Adelstein | Florida Construction Legal Updates

There is an affirmative claim known as promissory estoppel.  (Whereas equitable estoppel is used an affirmative defense, promissory estoppel is used as an affirmative claim.)

To prove promissory estoppel, a plaintiff must plead and prove the following three elements: “(1) a representation as to a material fact that is contrary to a later-asserted position; (2) a reasonable reliance on that representation; and (3) a change in position detrimental to the party claiming estoppel caused by the representation and reliance thereon.” Romo v. Amedex Ins. Co., 930 So.2d 643, 650 (Fla. 3d DCA 2006) (citation and quotation omitted). Stated differently: “A party will be estopped from denying liability under the principle of promissory estoppel when the party makes ‘[a] promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance…[and] injustice can be avoided only by enforcement of the promise.’” Criterion Leasing Group v. Gulf Coast Plastering & Drywall, 582 So.2d 799, 800 (Fla. 1st DCA 1991).

When it comes to insurance coverage, generally, insurance coverage is not created by an estoppel argument.  JN Auto Collection, Corp. v U.S. Security Ins. Co., 59 So.3d 256, 258 (Fla. 3d DCA 2011). However, there is a narrow promissory estoppel exception to prevent injustice or the perpetration of fraud by a misrepresentation.  Id. at 259 (quotation omitted); Kissimmee Utilities Authority v. Florida Municipal Ins. Trust, 686 So.2d766 (Fla. 5th DCA 1997) (“[T]he doctrine of promissory estoppel may be utilized to create insurance coverage when a refusal to do so would sanction fraud or injustice.”).

This promissory estoppel exception to create insurance coverage is a very limited exception. E.L.S.R. Corp. v. Geico General Ins. Co., 183 F.Supp.3d 1273, 1277 (S.D.Fla. 2016). For this reason, a plaintiff must prove this promissory estoppel exception to create insurance coverage with clear and convincing evidence. Id.

Insurance is important. An extension of this is insurance coverage.  What if you receive a denial or declination of coverage or do not have coverage you firmly believed you maintained?  Maybe, just maybe, there is a promissory estoppel argument that can be used to create coverage.  Look, I don’t want to get your hopes up that this is the fallback position anytime an insurer issues a denial or declination of coverage.  It is definitely not, which is why this is a narrow exception and limited remedy.  But this is why working with counsel that understands insurance coverage is a MUST.  If there are facts that can support a promissory estoppel argument with clear and convincing evidence to create coverage you can can prove you thought you maintained, and there was a representation that you maintained such insurance, working with insurance coverage counsel can assist in maximizing this promissory estoppel coverage argument.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

It’s Time for Property Insurance Carriers to Re-Adjust in Louisiana

Taylo Brett | Adams and Reese

After Louisiana citizens endured two consecutive prolific hurricane seasons in 2020 and 2021, state lawmakers made the adjustment of property insurance claims a top priority during this year’s Regular Legislative Session.  On August 1, 2022, two new bills concerning claims adjusters went into effect:  Senate Bill 198 and Senate Bill 214.  Both of these bills have the potential to affect how insurers handle the adjustment of property insurance claims in the state.

Senate Bill 198: Designating an adjuster as the insured’s “primary contact”

Among other things, Senate Bill 198 created a new law which imposes several requirements on insurers when assigning multiple claims adjusters to a personal residential insurance claim in the wake of a “named storm or hurricane for which a state of emergency or disaster is declared.”  These added requirements apply only when the insurer changes the adjuster who is “primarily responsible” for the claim three or more times within a six-month period.  Under those circumstances, the new law requires the insurer to provide the following to the insured:

  • A written status report that includes pertinent information about: (1) the insured’s deductible; (2) the amounts available under each coverage; (3) the amounts paid under each coverage; (4) when, where, and to whom payments were issued; and (5) items presently known to the insurer, but for which the insured must give further information to complete the adjustment process;
  • A primary contact until the insurer closes the claim or a party files suit on the claim; and
  • Two or more direct means of communication with the primary contact.

The insurer’s designation of one adjuster as the “primary contact” on the claim does not preclude other claims personnel from working on portions of the insured’s claim.  Nonetheless, it was clear that the Legislature’s intention behind Senate Bill 198 was to assure that policyholders have a consistent point of contact throughout the life of the claim. 

Although the new statute does not have a penalty provision, an insured may argue that violation of the statute gives rise to a claim for bad faith practices in handling and adjusting the claim.  In such cases, it is certainly foreseeable that the plaintiff (the insured) will issue discovery to the defendant (the insurer) requesting the identities of all adjusters who were involved on the claim.  Thus, the best practice for insurers in the aftermath of a named storm may be to have the initial adjuster serve as the “primary contact” for a claim. The primary contact can pass on details in the file from other vendors or adjusters as well as provide contact information for other adjusters. 

Senate Bill 214: All adjusters must appear and testify in Louisiana in lawsuits arising from insurance claims they adjusted in this state

Senate Bill 214 amended the process for obtaining testimony from non-resident witnesses, by creating an exception for non-resident claims adjusters who adjust an insurance claim in Louisiana in two inter-related ways: 

  • The new law requires non-resident claims adjusters to be available for deposition via telephone or video teleconference in suits arising out of the claim they adjusted in Louisiana, but limits the admissibility of the adjuster’s deposition testimony at trial.
  • Relatedly, the new law requires non-resident claims adjusters to appear and testify at trial in the suit.

Senate Bill 214 essentially places the onus upon insurers to make their assigned claims adjusters available to testify at trial in Louisiana regardless of their state of residence.  As a result, insurers should carefully evaluate their processes for assigning adjusters to claims made in Louisiana, and consider the costs associated with selecting non-resident adjusters to handle those claims.             

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

9 Basic Strategies for Pursuing Coverage for Construction Accident Claims

William S. Bennett | Saxe Doernberger & Vita

Construction accidents happen all the time. Accidents involving worker injuries or damage to property can shut down a job site and cause significant losses. Contractors should be diligent and aggressive in examining all of the available options for recovery under their different insurance policies and bonds. This article will provide a refresher on some basic tips to help policyholders improve claims practices with respect to construction accidents.

1. Identify relevant insurance policies:
Identifying what policies exist that might cover the loss can sometimes be easier said than done. Construction accidents come in many different forms and can involve many different parties who suffer various types of losses. The general contractor, owner, subcontractors, and vendors could all be involved or affected in some way. Each of these parties has its own insurance coverage and will have promised each other various forms of risk transfer through those policies and through their contracts.

Depending upon the facts surrounding the accident, there may be other parties who the general contractor assumed the responsibility of securing additional insured coverage for. At the outset of a claim, the general contractor should be evaluating its own policies for coverage, but it should also be reviewing the additional insured coverage available from its subcontractors for itself and other interested parties.

While general liability policies will likely be the main target, the general contractor needs to investigate every insurance policy that could potentially be involved and make sure the proper claims are made. This may include professional coverages, auto coverages, and even first-party coverages in certain instances.

2. Give notice early and often:
Each claim under each policy will likely be subject to different notice and reporting requirements, which should be examined and followed as soon as possible. At this point, a contractor should not spend time trying to determine whether each claim is going to ultimately be successful. Because there could be a timing issue with the notice requirements, notice should be quickly provided to all policies identified as potentially implicated. The timing of the claim submission can be crucial, especially in certain jurisdictions, and it can be highly detrimental to wait to give notice because the contractor is still investigating or evaluating the potential claim.

3. Have the right team in place:
Depending upon the type of accident and the extent of the damages, doing everything correctly may require more than just an in-house risk manager. These matters can become extensive and complex. Contractors should consider involving additional people in their claim response team, including brokers, adjusters, coverage lawyers, and industry experts.

Having the right insurance recovery team in place will ensure that every opportunity for recovery is pursued correctly and fully. The extra expense in utilizing a comprehensive team will ensure that the insurers get a carefully orchestrated presentation of the claim and a consistent message across all points of contact. It will also help to ensure that the contractor’s position is consistent from the outset of the claim, in case the claim ultimately becomes disputed and/or litigated in the future.

4. Evaluate available coverage:
Once the insurer has been notified, you can expect that it will start evaluating the available facts and putting together a coverage position. You should do the same. A common mistake we see contractors make is to submit the claim and then sit and wait until the insurer sends a coverage position. This is wasted time.

Where notice was given promptly, the contractor is likely still going to be learning about the claim at this stage. It should also be evaluating the available policies to start identifying possible coverage issues where the insurers may contest coverage. These early stages of the claim are the perfect opportunity to issue spot the available coverages and get prepared in case the insurer’s response is not as favorable as it should be.

Coverage counsel can begin putting together a strategic plan that synthesizes all of the dynamic aspects of the situation. This might include considerations such as (1) whether there are any issues in a policy’s triggering language, (2) what is the priority of coverage among the different potentially applicable policies, (3) whether contracts exist to sufficiently trigger blanket additional insured forms, or (4) whether there are going to be losses beyond basic bodily injury or property damage and how those might be covered. Answering questions like these can help the contractor identify which policies are the best ones to target and in what order of priority.

5. Be aggressive on setting a drop dead date for resolution of all claims:
If left to their own devices, these types of claims can take on a life of their own and consume an inordinate amount of time, energy, and expense. Setting an aggressive time table to have the various claims resolved can be productive.

Explaining to assigned adjusters why a specific resolution date is necessary will help your cause. Make sure they understand that it’s not just an arbitrary date, but there are valid reasons to have the claims resolved by a drop dead date. It is ok to be assertive as long as everyone is polite and professional.

Coverage counsel and your brokers are great resources at this stage. If the insurer is represented but the claim has not progressed to litigation, counsel to counsel calls can be effective to push the claim along. If unrepresented, counsel can press the assigned adjuster to move the claim along. At the same time, the contractor’s broker can leverage its underwriting contacts and use its book of business with the insurer as a tool to leverage movement on the claim.

6. Document everything:
One of the greatest fears of an adjuster is to be at the center of a well-documented bad faith claim. Everything that happens and everything that is said and promised during the life of the claim should be documented. Keeping an exhaustive, detailed record of what is going on (or not going on) can motivate an adjuster to move faster, especially if they know a record is being created for use in a potential bad faith claim. If the claim ultimately leads to litigation, being able to sync the contractor’s records of how the claim was handled with the claims handler’s own notes in the claims file can be a very compelling way to create leverage in the case. Where conversations happen over the phone, take notes of the call and, ideally, send follow up confirmation emails of what transpired on the call.

Insurers move at their own pace, so it is the contractor’s job to provide them with the incentive to treat the claim as a priority. You should strive to make it as easy as possible for them, all the while making sure they know that you are creating a comprehensive record of what occurs. If a bad faith claim is necessary, they know that you will be bringing a clear record with you.

7. Don’t forget to ask for partial payments:
If there is a situation where all parties agree there is coverage for at least a part of the claim value, many insurance companies will attempt to hold onto that amount until the entire claim is resolved. This allows the carrier to hold onto their money and earn from it as long as possible.

If everyone agrees the contractor is entitled to coverage for a certain portion of a claim, it should demand a partial payment at that point. This can put much needed liquidity into accounts and help the project to move forward.

There can also be a strategic element to utilizing partial payment demands. At a time when other aspects of the claim are being disputed, an unpaid partial payment of an undisputed amount of the claim can be a strong leverage point to help coax movement on the disputed component. Depending on the jurisdiction, insurers can be subject to strict payment timelines where amounts are undisputed. If the insurer is pushing those timelines, you may be able to utilize that as leverage.

8. Don’t forget about statutes of limitations and contractual limitations periods:
Sometimes contractors get so far into the weeds arguing their various claims that they lose sight of the time limitations set forth in the insurance policies as to when lawsuits have to be filed. Contractual time limits for filing suit can be different from your state’s statute of limitations for a particular type of claim.

Never rely on the fact that you are currently negotiating your claim seemingly in good faith with the insurance company. Time and again insureds have lost out on coverage they were entitled to because they were negotiating their claims with their insurers when the contractual limitations period passed. Judges have generally not been receptive to the “but we were negotiating in good faith” defense and will likely not accept that as an excuse for missing the applicable limitations deadline. At the outset, have your claims coverage counsel review all of the various contractual time frames and statutes of limitations and determine how they work together, in light of applicable jurisdictional case law. Make sure to input them into a calendaring system so they will not be missed. If the insurer is really negotiating in good faith, it should be open to a tolling agreement to postpone the limitations period while negotiations continue.

9. Litigation:
When all else fails, sometimes claims just have to be put into litigation to get the result you want. However, not all litigation is created equal. Sometimes, the nature of the parties’ positions will force the claim down a long and heavily contested road before any progress is made. Other times, a little bit of discovery can help to clarify the situation for the parties and feed a productive early mediation that resolves the dispute entirely. In some instances, we have even seen the filing of the complaint cause the claim to be elevated to the right person’s attention such that the claim was just paid outright, after that person reviewed the issues holding up payment and realized the adjuster had taken an incorrect position. Counsel should be advising on realistic odds of success for the issues involved, which will allow you to make an informed and cost-conscious decision about whether litigation makes sense.

Claims are an inevitability in the construction industry. Contractors should not allow themselves to be surprised by them. The right team should already be in place when the claim comes in and there should be a plan of attack already established to make sure that all of the steps above are done in a timely, efficient, and effective manner.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

Wildfire Insurance Coverage Series, Part 4: Coverage for Supply Chain Related Losses

Scott P. DeVries and Yosef Itkin | Hunton Insurance Recovery Blog

Business loss is not limited to fire or smoke damage to its own property – it often arises from damage to the supply chain. In this post in the Blog’s Wildfire Insurance Coverage Series, we look at what coverage may exist when wildfire damages an entity’s supply chain.

In many instances, while the insured property does not sustain fire or smoke damage, wildfires can wreak havoc on the business supply chain. For some, contingent business interruption coverage may be a solution. Contingent business interruption insurance extends coverage for the loss of prospective earnings because of an interruption in the insured’s supply chain that is caused by damage to property that the insured neither owns nor operates.[1] Typically, the property covered is of a supplier or customer. For example, in 2000, Ericsson Telecom A.B., a mobile phone manufacturer, presented a substantial contingent business interruption claim based on a fire that damaged a Royal Philips Electronics semiconductor plant. Royal Philips supplied critical components for Ericsson’s mobile phones. The fire caused Royal Philips to close its plant, halting Ericsson’s phone production for six weeks, resulting in substantial losses.

Issues may arise concerning who qualifies as a supplier under the terms of the policy. Archer-Daniels-Midland Co. v. Phoenix Assur. Co. of New York addressed this issue, taking a broader approach and interpreting “any supplier of goods or services” to mean an “unrestricted group of those who furnish what is needed or desired.”[2] As time has passed, insurers have limited “suppliers” to those with a direct relationship and some courts have so construed the provision. For example, in Pentair, Inc. v. American Guarantee and Liability Ins. Co., a power substation that provided power to two factories that in turn provided product to two Pentair subsidiaries sustained physical damage following an earthquake.[3] Damage to the power substation was insufficient to invoke contingent business interruption coverage because the power station was a supplier of the factories, not a supplier directly or indirectly of the insured.[4]

*                      *                      *

This is the fourth post in the Blog’s Wildfire Insurance Coverage Series.

*This post is an excerpt from an article written by Scott DeVries and Yosef Itkin that originally appeared in the Journal on Emerging Issues in Litigation published by Fastcase Full Court Press, Volume 2, Number 3 (Summer 2022), pp. 213-222 (a comprehensive list of all references is provided in the published journal version).

[1] CII Carbon, L.L.C. v. Nat’l Union Fire Ins. Co. of Louisiana, 918 So.2d 1060, 1061, n. 1 (La. Ct. App. 2005).

[2] 936 F.Supp. 534, 541 (S.D. Ill. 1996).

[3] 400 F.3d 613 (8th Cir. 2005).

[4] See also Millennium Inorganic Chemicals Ltd. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 744 F.3d 279, 286 (4th Cir. 2014) (holding that a natural gas production facility was not a “direct contributing property” to qualify under contingent business interruption coverage).

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

Wildfire Insurance Coverage Series, Part 5: Valuation of Loss, Sublimits, and Amount of Potential Recovery

Scott P. DeVries and Yosef Itkin | Hunton Insurance Recovery Blog

Insurance policies provide different levels of insurance coverage and even if the amount purchased was adequate at one time, developments over time (e.g., inflation, upgrades, regulatory changes and surge pricing) may leave the policyholder underinsured. In this post in the Blog’s Wildfire Insurance Coverage Series, we emphasize the need for policyholders to take a close look at the policy’s terms to select the right type and amount of coverage for a potential loss.

Various types of coverage are available and there has been extensive litigation concerning the amount of coverage provided by one policy form or another. For example, the policyholder may have purchased market value coverage (the value of the house at the time of the wildfire), replacement coverage subject to a policy limits cap, guaranteed replacement cost coverage, or some variation on the theme. While the property may be properly valued when the insurance is purchased, it may become undervalued at the time of loss due to factors like inflation or home improvements that were not disclosed to the insurer. And, however generous the limits may be when the policy is procured, as one court discussed, it may be insufficient when “surge pricing” occurs after a wildfire.[1]

These concepts were discussed in considerable detail in Vulk v. State Farm General Ins. Co. (Boles Wildfire) where the policyholder purchased a policy providing replacement coverage subject to a policy limit that supposedly reflected the estimated cost to rebuild the home.[2] After the wildfire destroyed the home, it was rebuilt at a materially greater cost. In rejecting the policyholder’s argument for complete reimbursement, the court held that it was the policyholder’s obligation to select the coverage it wanted (in this case, guaranteed replacement value), that under the circumstances presented, the agent had no special obligation to recommend alternatives, and that recognized exceptions to this rule were not present.

In another case, the policyholder purchased replacement cost coverage (value of lost or damaged building) as well as extended replacement cost coverage (cost to repair or replace) for their home.[3] After the home was destroyed by a Northern California wildfire, the policyholder undertook plans to rebuild but because of obstacles in the rebuilding process such as the overwhelming demand for architects, contractors and others that bogged down the permitting process, the demand surge that dramatically increased pricing (factors which the insured characterized as “factually and legally impractical and/or impossible” to overcome), and questions concerning whether the insurer would pay the extended replacement cost, the policyholder sold the property at a loss. The insurer agreed to pay the value of the damaged building but declined to pay for the cost of replacement because the policyholder did not satisfy the condition precedent—replacement of the property. The court accepted the insurer’s position, reasoning that the policy language controlled and that there was no evidence of anticipatory breach.

Policies also may contain sublimits that can affect the scope of recovery. For example, SECURA Ins. v. Lyme St. Croix Forest Co. addressed whether a wildfire (the Germann Road Fire) that expanded and refueled over the course of several days and 7,442 acres constituted a single uninterrupted cause of all damages, and thus one occurrence subject to the policy’s per occurrence limit of $500,000, or multiple occurrences each time the fire spread to new property permitting collection of sublimits for each occurrence up to the policy aggregate of $2 million.[4] The Court of Appeal held that each of the events that occurred over the course of several days and over an extended geographic area could constitute a break in causation under the “cause” theory adopted by Wisconsin courts and provide for multiple occurrences. However, on appeal to the Wisconsin Supreme Court, the Court ultimately held that the fire constituted a single event and thus, the $500,000 per occurrence limit was applicable.[5]

*                      *                      *

This is the fifth post in the Blog’s Wildfire Insurance Coverage Series.

*This post is an excerpt from an article written by Scott DeVries and Yosef Itkin that originally appeared in the Journal on Emerging Issues in Litigation published by Fastcase Full Court Press, Volume 2, Number 3 (Summer 2022), pp. 213-222 (a comprehensive list of all references is provided in the published journal version). 

[1] The contract terms will govern so long as the coverage terms meet or exceed those specified by statute.  See e.g., St. Cyr v. California FAIR Plan, 223 Cal.App.4th 786 (2014) and California FAIR Plan v. Games, 11 Cal.App.5th 1276, 1295 (2017). 

[2] 69 Cal.App.5th 243 (2021).

[3] Tarakanov v. Lexington Ins. Co., 441 F.Supp.3d 887 (N.D. Cal. 2020).

[4] 378 Wis. 2d 740, rev’d and remanded, 384 Wis.2d 282  (2018).

[5] SECURA Ins. v. Lyme St. Croix Forest Co., LLC, 384 Wis.2d 282, 299.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email