Three hard hats, one orange, one white, and one blue, sit side-by-side at a construction site. The new law took a series of steps to try to address those issues, but the constitutional challenge focuses on part of the measure that deals with what is known as “assignment of benefits.” (Credit: maienter9/Adobe Stock)

The Restoration Association of Florida and Air Quality Assessors, LLC, an Orlando firm that does work like mold testing and leak detection, filed a lawsuit in Leon County circuit court less than a week after Florida lawmakers made property-casualty insurance changes. The contractors group filed the constitutional challenge to fight a new restriction on attorney fees in lawsuits against insurance companies.

It came after lawmakers last week passed a measure (SB 2-D) to try to bolster a troubled property-insurance market that has led to homeowners losing coverage and seeing spiraling premiums. Lawmakers gave final approval to the bill on Wednesday, and Gov. Ron DeSantis signed it on Thursday.

Insurers have long blamed litigation and attorney fees for driving up costs. The new law took a series of steps to try to address those issues, but the constitutional challenge focuses on part of the measure that deals with what is known as “assignment of benefits.”

In assignment of benefits, homeowners sign over their insurance claims to contractors, who then seek payment from insurance companies — often spurring lawsuits about claims and payments.

Contractors in the past have been able to recover their attorney fees from insurers if they are successful in the lawsuits, a concept known as “prevailing party fees.” But the new law stripped contractors of being able to recover prevailing-party fees when they are assigned benefits.

Homeowners can still recover prevailing-party fees if they file lawsuits directly against insurers, but the contractors cannot. The lawsuit alleges that the change violates equal-protection and due-process rights and denies contractors access to courts.

“Claims submitted to insurers for work performed by contractors under an AOB (assignment of benefit) are generally not large in monetary amount,” the lawsuit said. “When the insurer delays, underpays or does not pay a claim at all, contractors are forced to commence an action against the insurer to recover the full amount due for the work performed. Without the corresponding right to recover prevailing party fees, SB 2-D makes it economically unfeasible for the contractor to pursue its lawful rights and remedies in court. Invoices for work performed by contractors under AOBs are generally not significant enough for a lawyer to agree to represent the contractor on a contingency fee basis and it is not economically reasonable for the contractor to … pay a lawyer on an hourly basis to recover the amount(s) owed.”

The lawsuit said invoices for work done by Air Quality Assessors and many other members of the association often total $2,500 to $3,000.

“The inability to recover prevailing party attorneys’ fees will effectively shut the courthouse door to plaintiffs because it will be cost-prohibitive to pay an attorney for these types of small claims,” the lawsuit said.

But William Large, president of the Florida Justice Reform Institute, a business-backed group that lobbies to reduce litigation, said in a statement after the law passed that “property insurance lawsuits have exploded over the last several years, overwhelming Florida’s insurance market.”

“Senate Bill 2-D contains significant litigation reforms and gets to the heart of escalating rates and limited coverage — lawsuit abuse,” Large said.

Assignment of benefits has long been a contentious issue in the insurance industry. The Legislature in 2019 put additional restrictions on assignment of benefits, at least in part because of an increase in residential water-damage claims.

But contractors contend that assignment of benefits helps homeowners who are unfamiliar with making sure insurance claims are handled properly.

“AOBs are not new and have been used for a long time, especially during emergency weather situations,” the lawsuit said. “In Florida, AOBs are prevalent in the residential property context when homeowners suffer damage to their home and need to hire contractors to repair the issues.”

The lawsuit, which includes seeking a preliminary injunction against the law, names as defendants Melanie Griffin, secretary of the state Department of Business and Professional Regulation, and Donald Shaw, executive director of the Construction Industry Licensing Board. The case has been assigned to Leon County Circuit Judge Layne Smith, according to an online docket.


Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.


  • All news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including and

Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.



Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join now!

  • Unlimited access to - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including, and
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2023 ALM Global, LLC. All Rights Reserved.