How Subcontractors’ Carriers Can Push Back Against Excessive Builder Demands in Florida Claims

In Florida construction-defect litigation, builders frequently leverage additional-insured and indemnity claims to seek defense costs from subcontractors’ insurers—sometimes exceeding the value of the alleged defects themselves. These demands, often referred to as "AI/CI" claims, can create pressure to settle, even when the subcontractor’s exposure is minimal. Builders may delay formal breach actions and instead use the threat of future litigation to extract higher settlements, bundling defense costs with defect damages in a single demand.

Florida case law does allow builders to recover reasonable defense costs in some indemnity scenarios, but important limitations exist—especially when the builder shares fault. Unlike insurers, subcontractors are only obligated to cover defense costs directly tied to their own alleged work. Knowing these legal boundaries is crucial for carriers seeking to avoid overpaying on weak claims.

One effective defense strategy is securing a release for both the builder and subcontractor from the original plaintiff for the subcontractor’s work-related damages. This halts the accrual of both indemnity-based and additional-insured defense obligations. Carriers can further strengthen their position by issuing timely proposals for settlement (PFS) under Florida law, limiting their exposure to the builder’s legal fees.

Ultimately, navigating AI/CI claims requires a nuanced approach that separates valid exposure from inflated settlement leverage. Carriers that deploy these strategies can reduce risk and avoid capitulating to disproportionate demands from builders.