The answer, at least in Florida, seems to be “no.” As a general rule an adjuster is deemed to be an agent for the carrier and thus, the adjuster’s conduct is imputed to the insurer, which is then potentially subject to liability for the adjuster’s mishandling of claims in actions alleging negligence or bad faith. The individual adjuster herself, who is not in direct privity with the insured, is not so liable.
This, however, remains a somewhat debated and unsettled area of the law nationally and, unlike Florida, there are states that have permitted negligence/tort actions brought directly against an individual adjuster to proceed.
For example, in 2014 a California court permitted a homeowner to sue an insurance adjuster on an individual basis for an alleged negligent misrepresentation. As explained above, while employees of insurance companies are not parties to the insurance contract with the insured and thus usually cannot be personally sued for their adjustment of claims performed as an employee, in Bock v. Hansen, 225 Cal. App. 4th 215 (2014) a California court held that insurance adjusters may be held personally liable for independent torts committed in the course of handling claims. And the Texas Supreme Court and the Fifth Circuit have likewise held that an insurance adjuster may be held individually liable for violating provisions of the relevant insurance code. See Liberty Mutual Ins. Co., v. Garrison Contractors, Inc., 966 S.W.2d 482, 486 (Tex. 1998) (concluding based on chapter 541’s definition of a “person” that an individual employee of an insurance company may be held liable for violations of the chapter, so long as the employee is “engage[d] in the business of insurance”).
More recently, in a case decided under Washington law last month, a Washington appellate court held that “an individual insurance adjuster may be liable for bad faith and CPA [Consumer Protection Act] violations” See Keodalah v. Allstate Ins. Co., 413 P.3d 1059, 1060 (Wash. Ct. App. 2018). The Keodalah court, taking a broad reading of Washington state bad faith laws observed that they impose a duty upon “all persons” involved in insurance and because a “person” is defined as an individual or a company, the court found that the adjuster at issue was “in the business of insurance and was acting as an Allstate representative [and] under the plain language of the statute, she had the duty to act in good faith . . . [a]nd she can be sued for breaching this duty.” Id. at 1061. Moreover, the court also concluded that a claim for violation of the Consumer Protection Act does not require the existence of a direct contractual relationship between the insured and the adjuster and thus that “individual insurance adjusters can be liable for a violation of the CPA.” Id. at 1065. A link to the Keodalah opinion is here: www.courts.wa.gov/opinions/pdf/757318.pdf
In Florida, however, Florida courts have rejected the notion that an insurance adjuster may be sued individually for negligence or bad faith.
Three relevant decisions so holding are below:
Defendants argue that Defendant Manley should be dismissed as Plaintiffs have failed to state a basis of individual liability for him. Under Florida law, “a person making or purporting to make a contract with another as agent for a disclosed principal does not become a party to the contract.” Philip Schwartz, Inc. v. Gold Coast Graphics, Inc., 623 So.2d 819, 820 (Fla. 4th DCA 1993) (quoting Restatement (Second) of Agency § 320 (1958)). Other states applying this principle to the insurance context have held that insurance adjusters are not individually liable to the insured for breach of contract or for breach of the implied covenant of good faith and fair dealing because adjusters are not parties to the contract. See Tipton v. Nationwide Mut. Fire Ins. Co., 381 F.Supp.2d 567, 571 (S.D.Miss.2003) (An individual “may not be held directly liable under an insurance contract if that person was not a party to the insurance contract itself, because that person has no duty arising from the policy to provide coverage.”); Natividad v. Alexsis, Inc., 875 S.W.2d 695, 698 (Tex.1994) (holding insurance adjuster owed the insured no duty of good faith and fair dealing because he was not party to a contract with the insured); Hudock v.. Donegal Mut. Ins. Co., 264 A.2d 668, 672 (Pa.1970) (holding acts of insurance adjusters in failing to negotiate in good faith did not make them individually liable for breach of contract because no contractual relationship existed between adjusters and the insured); see also King v. Nat'l Sec. Fire & Cas. Co., 656 So.2d 1338, 1339 (Fla. 4th DCA 1995) (independent adjusters owe no duty to the insured unless the insured is suing for an intentional tort such as fraud).
In the instant case, Defendants correctly assert that Defendant Manley is not individually liable under either a breach of contract claim or a claim for breach of the implied covenant of good faith and fair dealing because he was not a party to the insurance contract. In their response to Defendants' motion, Plaintiffs argue that Defendant Manley should be personally liable because he has acted outside the scope of his duties as an employee, citing Defendant Manley's “verbal aggression” (Doc. 17 at 5). Defendant Manley's actions, even if egregious, do not make him a party to the contract, however. Therefore Plaintiffs' claims against Defendant Manley for breach of contract and for breach of the implied covenant of good faith and fair dealing should be dismissed.
The Complaint is clear that it brings a negligent misrepresentation claim against Reynolds. See, e.g., Compl. ¶¶ 27, 28, 31, 35. “Florida law does not recognize a cause of action by an insured against an independent insurance adjuster in simple negligence.” King v. Nat'l Sec. Fire & Cas. Co., 656 So.2d 1338, 1339 (Fla.Dist.Ct.App.1995). As explained by the Fourth District Court of Appeal, an insurance adjuster “does not owe a duty to the insured unless the insured is suing for an intentional tort.” Id. Applying King, this Court has previously found that an insured cannot state a valid claim for negligence against insurance adjusters assigned to its claim. Fontainebleau Gardens Condo. Ass'n, Inc. v. Pac. Ins. Co., Ltd., 768 F.Supp.2d 1271, 1275 (S.D.Fla.2011); see also Kuhlman v. Crawford & Co., No. 01–6036–CIV, 2002 WL 34368089, at *3 (S.D.Fla. Jan.23, 2002) (“[T]his Court concludes that none of these common law torts based upon a breach of duty are available in Florida against an insurance adjustor.”).
A company employee adjuster acts on behalf of the insurer and does not owe a duty in an individual capacity to an insured that is separate from the duty owed to the insured by the insurer, provided that the conduct at issue is within the scope of the adjuster's employment or agency. See Old Republic Ins. Co. v. Von Onweller Const. Co., 239 So.2d 503 (Fla. Dist. Ct. App. 1970) (an insurance company is bound by the acts of an agent performed within the scope of his or her actual or apparent authority); King v. Nat'l Sec. Fire & Cas. Co., 656 So.2d 1338, 1339 (Fla. Dist. Ct. App. 1995) (“[a]n insurance adjuster acts on behalf of the insurer”); GAB Bus. Servs., Inc. v. Syndicate 627, 809 F.2d 755, 759 (11th Cir. 1987) (“When a[n] agent acts negligently so as to cause its principal to become liable to a third person, the principal may bring an action against the agent either in tort or for breach of contract”); Stallworth v. Hartford Ins. Co., No. 3:06cv89, 2006 WL 2711597 at *7 (N.D. Fla. Sept. 19, 2006) (adjuster not “individually liable under either a breach of contract claim or a claim for breach of the implied covenant of good faith and fair dealing because he was not a party to the insurance contract”); Kuhlman v. Crawford & Co., No. 01-6036, 2002 WL 34368089 (S.D. Fla. Jan. 23, 2002) (the common law torts of breach of duty to deal fairly, breach of fiduciary duty, and breach of implied obligation of good faith are not available in Florida against an insurance adjustor). “An insurance adjuster is a special agent for the company and his powers and authority are prima facie coextensive with the business intrusted to his care, which is ascertaining and determining the amount of any claim, loss or damage payable under an insurance contract, and/or effecting settlement of such claim, loss or damage.” Von Onweller, 239 So.2d at 504.
As an agent for Geico, Jones owed Geico a duty to act with care, diligence and skill.3 GAB Bus. Servs., Inc. v. Syndicate 627, 809 F.2d 755, 759 (11th Cir. 1987). Jones' duty runs to Geico, and it is Geico that owes duties to the insured. Based on the allegation that Jones acted at all times within his capacity as a Geico employee adjuster, Plaintiff has not set forth a claim of claim that Jones owed a duty in his individual capacity to her. In the absence of a contractual relationship or allegations which establish that Jones' owed some independent duty to Plaintiff, Florida law precludes negligence claims by insureds against company employee adjustors individually. Kuhlman, 2002 WL 34368089 at *3; King, 656 So.2d at 1339. Because Florida law does not recognize a cause of action against an insurance adjuster for negligence, Plaintiff cannot sustain her claim against Jones and Jones must be dismissed as a party defendant to the present lawsuit. Any claim for negligence must be directed to Jones' principal or employer Geico.
Thus, at least in Florida, where there are allegations made against an insurance adjuster for negligence or bad faith, and that adjuster was operating in the course and scope of her employment with a carrier in the adjustment of the claim, it is the carrier who will be subject to liability and an action against the adjuster in her individual capacity will not be permitted. As observed, this is not necessarily the case in other states.
MSC attorneys are ready to assist any company and its adjusters faced with these issues, whether in civil or regulatory actions.