Some, but not all, contractors in Florida have been abusing a critical type of insurance protection called Assignment of Benefits (AOB). AOB allows an insured to "assign" their benefits from an insurance policy to a contractor or lawyer, who then handles the claim. In my line of work, beverage distribution, AOB is critical to ensuring we are protected from lawsuits should the worst happen, and a product transfer ends up in a spill.
The problem is that some of the contractors with an AOB often inflate their bills, file frivolous lawsuits, or engage in other abusive tactics. As a result, insurance premiums go up, forcing insurers to pass on the higher costs to customers. This is especially harmful to small businesses like beverage distributors, who are already operating on thin margins.
In addition, the AOB system creates a perverse incentive for contractors to encourage property owners to file claims, even when there is no damage.
AOB has a critical role to play in liability protection that benefits everyone. But the abuse is getting worse, and the spiral effect of inaction will cause financial burdens that Floridians can't afford to pay. By reforming the AOB system, Florida can protect consumers and businesses from the harmful practices that ruin AOB for everyone.
4340 Galt City Road
Milton, FL 32583