The Eleventh Circuit rules that an insurance company may consider extrinsic evidence to determine its duty to defend.

In Composite Structures, Inc. v. Continental Insurance Company, 2014 U.S. App. LEXIS 5258, two seamen brought suit against Composite, who was insured by Continental, alleging injuries from exposure to carbon monoxide while aboard a boat sold, designed, and manufactured by Composite. The suit was filed almost three years after the two seamen were exposed to the carbon monoxide. Composite’s commercial general liability policy with Continental contained a pollution buy-back provision requiring conditions to be met for a pollution claim to be covered by the policy. The conditions included that the pollution events be identified as commencing at a specific time, the event be discovered within seventy-two hours of its commencement, and the event be reported to Continental within thirty days after the insured became aware of the incident. Continental denied coverage to Composite Structures on the basis that Composite Structures did not learn of the incident within seventy-two hours of its commencement and notice of the incident was not given to Continental within the thirty days after becoming known to Composite Structures. Composite Structures argued that Continental improperly looked beyond the allegations of the underlying complaint in order to determine these conditions were not satisfied. On March 20, 2014, the United States Court of Appeals for the Eleventh Circuit noted that under Florida law an insurer’s duty to defend is generally determined solely by the four corners of the complaint and that extrinsic evidence is not to be considered. However, the court noted that the Florida Supreme Court has recognized certain exceptions to this rule, including that insurers may look to extrinsic facts outside of the underlying complaint when the basis for denying coverage involves facts that would not normally be alleged in the complaint. Such an exception existed with respect to the pollution buy-back provision in this case because the underlying complaint was silent as to the dates upon which Composite Structures became aware of the incident and reported it to Continental.