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News Room

Client Update – Assignments of Insurance Benefits and “AOB” Vendors

By Tiffany A. Bustamante and John P. Robins

We hope this Client Update finds you in good health and positive spirits. Below are a few recent decisions regarding assignment of benefits, or “AOB” vendors, we felt may be of interest.  As always, we will continue to keep you appraised of any new issues emerging in the insurance industry.


QBE Specialty Insurance Company v. United Reconstruction Group, Inc., Case No. COCE16-015010 (Fla. 4TH DCA July 21, 2021).

Florida Appellate Court Issues Opinion on Validity of Assignment of Benefits in Property Insurance Claim. The 4th DCA held that the mere fact a vendor performed the work on the home did not give rise to an equitable assignment, absent any evidence that the insured intended to assign his rights under the policy to the vendor.

Brown v. Omega Insurance Company, 2021 Fla. App. LEXIS 7550 (Fla. 4th DCA, May 26, 2021)

Florida Appellate Court finds that an assignment of benefits to a vendor does not automatically preclude the insureds from filing suit in their own name for the claim.

Webb Roofing v. FedNat Insurance Company, 320 So. 3d 803 (Fla. 2nd DCA 2021)

Florida Appellate Court addressed whether a third party vendor, as assignee, could avoid the contractual appraisal provision in the policy. The 2nd DCA held since appraisal is not a required duty of the insureds under the policy’s “Duties After Loss” provision, it is able to be assigned to a vendor and is “a contract condition that is not eliminated by post-loss assignment of the contract.”


QBE Specialty Insurance Company v. United Reconstruction Group, Inc., Case No. COCE16-015010 (Fla. 4TH DCA July 21, 2021).

In QBE, the Appellant water mitigation company had a contract with the named insured who had a policy of insurance with QBE. The named insured, Fallon Jallali, allegedly sustained a water loss to the home insured by QBE.  Jallali hired a water mitigation company, United Reconstruction Group, Inc. (“United”), to perform water mitigation and minor repairs.

United claimed that the insured signed an assignment of benefits/direct payment authorization contract and, therefore, was the sole legal payee for the water mitigation invoice under QBE’s loss payment provision in the contract, which requires that QBE pays the insured “unless some other person is named in the policy or is legally entitled to receive payment.”  Specifically, United’s contract held the following assignment:

I hereby assign all rights and benefits in relation to such Services to [United] completely and without reservation. I authorize and instruct all insurance company(ies) that may be contractually obligated to provide benefits and/or payments to me for such Services to pay [United] directly as sole payee. I authorize and instruct any payments issued by the insurance company for the Services to be sent to [United] directly. In the event [United] does not receive payment in full for its Services, I hereby assign any and all causes of action, including compromising, litigating, settling or otherwise resolve said claim exclusively as [United] sees fit in its sole discretion. I understand, agree, and waive any right or claim of interest that I may possess to interfere with [United’s] exclusive discretion in this regard. I understand that whatever amount [United] is unable to collect from the insurance is ultimately my responsibility.

QBE eventually negotiated United’s bill, lowering the mitigation invoice from over $10,000.00 to around $8,000.00.  However, despite being provided with the direct pay authorization/assignment of benefits, QBE issued the check to the insured, Fallon Jallali, in his name.  United followed up by filing suit, claiming a breach of the loss payment provision.

In support of a summary judgment motion in the trial court, United presented the contract, which was signed, but not completely filled out.  The contract itself was signed, but the “printed name” line was not filled out.  Additionally, United filed an affidavit of one of its owners, which indicated that the insured executed, “or caused to be executed” the assignment, making United the legal payee for any checks for water mitigation coverage.  United’s argument aimed to create an equitable assignment between the insured and United, despite the missing signature of the insured.

QBE mirrored its affirmative defenses by arguing that the contract was not signed by the insured, but instead was signed by the named insured’s father.  In response to the motion for summary judgment, QBE hired a handwriting expert to prove their contention that the insured did not in fact sign the document.  While the trial court determined there was an issue of fact regarding the signature, the trial court still granted summary judgment, concluding that a valid assignment between the insured and United existed. 

The Fourth DCA reversed the summary judgment order and solidified the Florida Court’s rule regarding equitable assignments from AOB vendors:

Without resolving the underlying factual issue of who executed, or caused to be executed, the written AOB agreement, it cannot conclusively be said that the insured intended to assign her right to payment under the policy to United. The mere fact that United performed work on the home does not give rise to an equitable assignment absent evidence the insured intended to assign her rights.

Importantly, this decision appears aimed to protect insurers from AOB vendors that attempt to shirk the responsibilities placed on them by the new AOB statute, requiring signatures of all insureds in order to be valid.  By closing a potential back door in the form of “equitable” assignments of benefits, the Fourth DCA effectively maintains an insurer’s ability to challenge deficient assignments, in turn dealing directly with insureds over vendors that have driven the cost of mitigation up drastically over the past decade.

Brown v. Omega Insurance Company, 2021 Fla. App. LEXIS 7550 (Fla. 4th DCA, May 26, 2021)

In Brown, Omega Insurance Company sought to prevent an insured from filing suit in a case where benefits have been assigned.  The insureds, John and Georgene Brown, assigned their insurance benefits to ERG Contracting, under a standard direct pay/assignment contract.  However, prior to completing any work, the Browns filed suit against Omega for breach of contract.

At the trial court level, Omega succeeded in convincing the court that through the assignment of benefits, the insureds had divested all of their legal standing for the claim to ERG, and therefore could not bring a lawsuit.  However, the Fourth reversed the decision. 

Judge Warner turned to the contract itself in opining on the issue, which specifically granted ERG the rights and interests of the policy “for the work performed or to be performed by Contractor.”  However, the contract also only obligated ERG to perform the work that was approved by the insurance carrier.  Omega had already denied any approval for work to be performed. Hence, ERG was no longer obligated to perform any work under the policy.  Since no work was performed by ERG, it follows that their exclusive right to the benefits of the policy was extinguished, allowing the insureds to pursue their lawsuit unhindered.

In short, assignment of benefits to a third party does not automatically preclude the insureds from filing suit in their own name for the claim.  In cases where no work was performed, or cases where the AOB vendor has relinquished their assignment, the insureds can continue to pursue breach of contract lawsuits against insurers.

Webb Roofing v. FedNat Insurance Company, 320 So. 3d 803 (Fla. 2nd DCA 2021)

As a final, brief note, several recent cases, like Webb Roofing, have bolstered case law regarding the AOB vendors’ duty to comply with the policy once an insured’s benefits have been assigned.

Webb Roofing received an assignment that entitled it to receipt of payment from the insurance carrier, and concomitant with that right was its duty to comply with the conditions of the contract that afforded it payment. Therefore, we conclude that the assignment in this case did not eliminate the duty of compliance with the conditions imposed by the insurance contract…

Webb protects insurers against Public Adjusters who refuse to participate in the claims process, including appearing for examinations, pre-suit discovery, and appraisal.  As you know from our previous update, the new AOB statute, Fla. Stat. §627.7152 requires assignees of insurance benefits require participation in alternative dispute resolution if required by the policy on all agreements executed after July 1, 2019. However, cases like Webb prevents disputes over post-loss obligation compliance in claims with older assignment agreements, or any assignments that fall outside of the statute.

Atkinson, P.A. remains committed to providing you with sound guidance, representation, and defense in response to these complex legal issues and we will continue to monitor noteworthy cases. Should you have an questions with respect to this update, please feel free to contact our partners directly.

Very truly yours,


John P. Robins