When a commercial property loss turns out not to be covered, the policyholder’s options may not end with the insurer. The 5th District Court of Appeal’s recent decision in Brown & Brown of Florida, Inc. v. Houligan’s Pub & Club, Inc., 427 So. 3d 153 (Fla. 5th DCA Jan. 2, 2026), addresses the elements an insured must prove to recover from the broker that placed its coverage, and where the damages stop. The court identified the case as one of first impression.
Background
Houligan’s Pub & Club, Inc. and Ormond Wine Company, LLC, two Ormond Beach restaurants, relied on Brown & Brown, an insurance agent and broker, to procure commercial property insurance. Brown & Brown assigned an agent who specialized in commercial property coverage. He met with the restaurants’ president and CEO and made representations about the coverages he could procure. The only insurance he obtained was through policies underwritten by Lloyd’s of London.
In October 2016, Hurricane Matthew struck Ormond Beach, and sewage entered the restaurants through floor drains, causing substantial damage. The insureds submitted claims to Lloyd’s, which sought a declaratory judgment that its policy did not cover that type of loss. Three years later, a detailed final summary judgment found no coverage, and the 5th DCA affirmed in 2021.
In December 2021, the restaurants sued Brown & Brown for negligent failure to procure insurance, breach of fiduciary duty, and negligent misrepresentation. After a five-day trial, the jury found for the broker on the failure-to-procure claim but for the insureds on the other two claims. It allocated fault at 60% on the broker and 40% on each insured. The verdicts were more than $1.07 million for Houligan’s and $524,186 for Ormond Wine. After the fault allocation, the judgments were $647,400 and $314,511.60, each bearing interest at 9.34% a year, with prejudgment interest later added.
The Court’s Analysis
On appeal, Brown & Brown did not contest that it owed and breached a fiduciary duty or that it made negligent misrepresentations. It challenged only the damages. It argued that the 1st District’s decision in Capell v. Gamble, 733 So. 2d 534 (Fla. 1st DCA 1998), controlled causation and damages on all three claims, which required proof that the coverage was available in the marketplace.
The 5th DCA disagreed. Capell addressed only the measure of damages for negligent failure to procure insurance, and it rested on the premise that a broker cannot be liable for failing to procure a policy that did not exist. Breach of fiduciary duty and negligent misrepresentation are separate causes of action. They are “potentially broader claims that are not necessarily yoked to the existence of a specific insurance policy.” Relying on its own decision in E&R Environmental Services, LLC v. Sihle Financial Services, Inc., 396 So. 3d 624 (Fla. 5th DCA 2024), the court reiterated that even if requested coverage was unavailable in the marketplace, a broker may still be liable if it fails to tell its principal that the coverage was not procured, so the insured can consider alternatives. The court saw no reason not to apply that reasoning to negligent misrepresentation. The trial court therefore did not err in refusing to instruct the jury that proof of available insurance was required.
The court also noted that the broker was properly allowed to argue, as a defense to all three claims, that it had procured the coverage the insureds specifically requested. The jury appears to have credited that defense on the failure-to-procure claim.
The insureds did not walk away with the verdict intact, however. The court explained that the usual measure of damages is the loss the insured would have recovered had the coverage been in place, but that measure is “not exclusive.” Consequential damages, such as lost profits, may also be recoverable if sufficiently proved. Here, though, the jury’s award was largely based on the Lloyd’s policy, which had already been held not to cover the loss. Calculating damages from a policy that the court had said did not provide coverage was error, and not a harmless one. The court reversed and remanded for a new trial on damages only, without reliance on the Lloyd’s policy, and directed that prejudgment interest be recomputed. It affirmed on all other issues.
Why It Matters
For commercial policyholders, the decision cuts both ways. On liability, it confirms that a broker’s exposure for breach of fiduciary duty or negligent misrepresentation does not depend on proving that better coverage was available in the market, and that a broker who knows coverage was not obtained may be obligated to say so. On damages, it makes clear that a policy already held not to respond to the loss cannot serve as the yardstick. Policyholders and coverage counsel should consider the following:
- Evaluate every available theory. Negligent procurement, breach of fiduciary duty, and negligent misrepresentation are distinct claims with different elements and damages. The broker here defeated the procurement claim and still faced liability on the other two.
- Document requests and representations. The broker’s statements about the coverages it would be able to procure were central. Keep written records of what you asked for and what you were told, and confirm in writing what was and was not placed.
- Plan the damages case early. Identify the loss that proper coverage would have paid and any consequential losses that can be proved with evidence, rather than relying on a policy that a court has found does not apply.
- Coordinate the coverage and broker claims. Here, the declaratory judgment in favor of the insurer came first and then limited the damages theory against the broker. Consider how the order and outcome of each proceeding will affect the other, and consult counsel promptly about the deadlines that apply to each.
- Remember your own conduct may matter. The jury assigned 40% of the fault to each insured, which reduced each recovery accordingly.
Key Takeaway
Brown & Brown is a reminder that the broker’s role does not end when the policy is bound, and that a gap in coverage can lead to a claim against the broker as well as the insurer. Insureds that can show what they were told and what they were not told preserve claims that do not depend on proving what insurance was available. They still should be prepared to prove damages with something other than a policy that did not cover the loss in the first place.