The U.S. Eleventh Circuit Court of Appeals, applying Florida law, recently held that allegations in a complaint that only hypothetically support a negligence claim against an insured, but which did not actually plead negligence against the insured, did not give rise to a duty to defend. Selective Ins. Co. of the Southeast v. William P. White Racing Stables, Inc., 2017 WL 6368843 (11th Cir. Dec. 13, 2017).

A professional jockey sued his employer, the insured, after the jockey was injured in an accident when the horse he was riding collapsed. The jockey asserted claims against the insured under the Florida Workers’ Compensation Statute for failure to cooperate in investigating and prosecuting the jockey’s claims against a third-party tortfeasor and for spoliation of evidence. The jockey alleged negligence against other defendants but did not assert a negligence claim against the insured. The insured sought coverage under its liability policy. The insurer sought a declaration that it owed no duty to defend because the jockey’s claim against the insured did not fall within coverage for damages arising from bodily injury caused by an accident. The court entered a partial declaratory judgment against the insurer, holding that the insurer had a duty to defend because the complaint allegations could support a negligence claim against the insured. The insurer appealed.

The Eleventh Circuit reversed, holding that while the complaint allegations could arguably support a negligence claim, it would not conclude that the insurer was required to defend based on that hypothetical possibility. The Eleventh Circuit also noted that damages sought for breach of duties to preserve evidence are not covered by liability policies that apply to bodily injury caused by an accident. The Eleventh Circuit found that while other allegations in the complaint could potentially support a claim for negligence, the complaint did not seek recovery against the insured for negligence and held that extraneous allegations that could potentially give rise to a later claim for negligence are insufficient to bring the claim within the scope of coverage.