A Miami judge’s certification of a lawsuit against Florida’s largest utility company as a $10 billion class action, with damage claims from more than 4 million people who lost power in Hurricane Irma, could have significant repercussions for self-insurers and insurance companies in the years ahead.

Miami-Dade Circuit Judge David Miller issued the order last month, noting that the plaintiffs had shown that the case meets all requirements for a class action. The plaintiffs allege that Florida Power & Light was negligent and breached its contract with customers by failing to fully prepare for the storm or to “harden the system,” despite collecting a surcharge for that purpose.

“Plaintiffs are not claiming that FPL is an insurer against hurricanes, nor will class status produce that result,” the judge wrote. “Instead, plaintiffs seek class-wide management over a basic contractual issue”—whether the utility failed to honor its promise to use reasonable diligence at all times.

Judges and legal scholars have said that, with climate change and the consensus that storms are gaining in frequency and intensity, fewer businesses and utilities will now be able to claim damage was simply an “act of God” that they could not have anticipated. For some parts of the state, 2017’s Irma had weakened to a minor tropical storm, yet thousands of customers still lost power, the plaintiffs in the FPL suit allege.

Plaintiffs, like those in the FPL class, may succeed by showing the utility engaged in gross negligence and reckless disregard for warning signs, as opposed to “ordinary negligence” that can be chalked up partly to the will of Mother Nature, said professor Joel Eisen of the University of Richmond School of Law.

“I think there will be more claims of this sort and many will succeed,” said Eisen, who has studied energy law and policy.

The case, Heydi Velez et al vs. Florida Power & Light, was the second in December in which a court in Florida allowed thousands of claims over the lack of storm preparedness to proceed. In the U.S. District for the Northern District of Florida, a judge found that maritime law did not shield a bridge construction firm, Skanska USA, from property damage claims and business interruption claims. Skanska officials should have known of an impending hurricane in 2020 and should have taken steps to better secure construction barges before they broke loose and knocked out part of the Pensacola Bay bridge and smashed waterfront properties, the judge said.

And while the multinational Skanska and Florida Power & Light are largely self-insured, many smaller construction firms and utilities purchase their coverage. They could face similar legal claims if hurricanes continue to pound the Sunshine State and other coastal areas.

“I imagine that every utility is watching the FPL case closely,” said Robert Jarvis, a professor at Nova Southeastern University School of Law, in Fort Lauderdale.

The class action against FPL also means that insurance subrogation claims will now become part of the class. That could potentially save insurers the cost of having to pursue hundreds of individual claims to recoup what they’ve paid in business-interruption claims that resulted from the 2017 hurricane, which left some Floridians without power for days.

Similar actions against utilities may be on the rise. In Texas, 131 insurance carriers earlier this month filed suit against power companies and the Texas power grid operator over widespread losses from a 2021 winter storm. More than 4.5 million people lost power during the freezing weather, causing pipes to burst in many buildings and damaging property. Some 240 people died, and insurers have seen more than 500,000 claims filed for $10 million in losses.

Like the FPL and Skanska suits, the suit against Electric Reliability Council of Texas (ERCOT) and the Texas power generators argues gross negligence—that the utilities had knowledge of the storm’s potential but failed to prepare for it.

While many Florida property insurance policies exclude losses caused by power outages, some cover losses of refrigerated, perishable items, said John Ruiz, the lead attorney in the class action against FPL.

Ruiz’ name will ring a bell for many insurance companies. His Miami-based firm, MSP Recovery, has filed other class-action suits against more than 300 auto insurers around the country, charging that they have failed to correctly report primary payer status in no-fault auto accidents. The omissions have stuck Medicare and Medicare Advantage plans with billions of dollars in illegal costs, according to at least one of the MSP lawsuits.

The tort actions allege that 90 percent of no-fault auto insurers utilize the same software, produced by the Insurance Services Office, part of Verisk Analytics. It systematically and erroneously reports that Medicare should be the primary payer in many accidents, contrary to federal law, Ruiz said.

“If they are aware of the flaws in the software and they’ve done nothing to fix it, it becomes intentional,” Ruiz said last month.

Verisk declined to comment on its software or the litigation.

Ruiz’ Florida Power & Light class action puts him on the same side as some of the insurers he’s now battling in the auto-insurers suits. The FPL action could end up recouping some funds for carriers but could also potentially mean higher electric bills for Florida residents.

“If FPL loses, they’ll probably have to raise rates or cut back on promises to customers,” said Jarvis, the Florida law professor.

Florida Power & Light, which serves more than 11 million residents in Florida, is a subsidiary of NextEra Energy. FPL notes in its December 2020 annual report that, “due to the high cost and limited coverage available from third-party insurers,” NextEra does not have property insurance coverage for “a substantial portion” of its transmission and distribution property.

If storm restoration costs exceed storm reserves already set aside, FPL may recover costs through a surcharge on customers, as approved by Florida regulators, the annual report explains. NextEra, which maintains a captive insurance company, Palms Insurance, does have coverage on its directors and officers.

The class certification is the latest in a four-year legal battle over the Hurricane Irma outages. FPL initially asked a trial court to dismiss the case, then asked an appeals court to force the dispute to be heard by the Florida Public Service Commission. FPL lost at both attempts.

In Miami-Dade Circuit Court, the utility’s attorneys argued that the company had no way to be sure that all of the outages for the proposed class had come as a result of the hurricane. But the plaintiffs pointed out that almost 90 percent of FPL customers who saw outages during the 2017 storm reported a “cause code” as Hurricane Irma.

The judge, David Miller, said the utility has engaged in some obfuscation on the cause of the power outages, which did not help its cause.

“It stands to reason that FPL has identified the cause of an outage where it has been able to turn the power back on,” Miller wrote in the opinion. “FPL, though, has now dedicated the bulk of its presentation to undermining the accuracy of its own records.”

Company officials did not return requests for comment about the lawsuit.