Insurer Can Rely on Fact Outside Complaint to Disclaim Coverage

Composite Structures, Inc. v. The Continental Insurance Company (11th Cir.; March 20, 2014)

On appeal from the Middle District of Florida, the Eleventh Circuit was asked to decide on a matter in which a policyholder sought coverage under various marine and boat dealer policies. The claims for which it was seeking coverage concerned allegations that claimants were exposed to excessive amounts of carbon monoxide. The insurer disclaimed under the pollution exclusion. The exclusion, however, contained anexception that would apply if five conditions were met. Generally speaking, the court noted that Florida’s duty to defend rule was open to “natural exceptions” such that “factual issues that would not normally be alleged in the complaint” could be considered. In this case, the Eleventh Circuit said it was proper for the insurer to look at certain facts to disclaim coverage.