The U.S. Eleventh Circuit Court of Appeals held that an insurer was entitled to consider the date a claim was tendered to it in declining to defend based on a buy-back provision in an exclusion that was limited, in part, to claims reported to the insurer within 30 days after becoming known to the insured. Composite Structures, Inc. dba Marlow Marine Sales v. The Continental Insurance Company, No. 12-15866 (11th Cir. Mar. 20, 2014). 

Seamen alleged injury from exposure to excessive amounts of carbon monoxide while working aboard a vessel that a shipyard built. Suit was filed almost three years after their time on the vessel. The shipyard’s broker gave notice to the shipyard’s insurer, which denied coverage under CGL policies based on the insured’s failure to meet a condition in a buy-back clause for a pollution exclusion requiring an “occurrence” to be known to the insured within 72 hours of its commencement. The insured settled with the seamen and sued the insurer. Cross-motions for summary judgment were filed, and the district court granted the insurer’s motion. The insured appealed. 

The Eleventh Circuit affirmed, concluding that the circumstances fell within exceptions to the “four corners” rule recognized by the Florida Supreme Court and that the insurer was permitted to consider the uncontroverted date of notice as it would not be a fact normally included in a complaint and that when so considering that date and other conditions to the buy-back, it was not possible for the claim to fall within coverage.