An insurer does not have to defend or indemnify a refrigeration sales and services company in automobile negligence litigation because of a policy exclusion, a federal appeals court said Thursday in affirming a lower court ruling.

Seffner, Florida-based Tasman Services LLC purchased a commercial general liability policy from Lansing, Michigan-based Southern-Owners Insurance Co. that provided coverage, including for bodily injury and property damage, arising out of use of an automobile not owned by the company but used in its business.

But the coverage did not apply if there were other insurance that provided similar coverage, according to the ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in Southern-Owners Insurance Co. v. Tasman Services LLC.

In August 2016, an employee driving a U-Haul truck leased to Tasman collided head-on with another vehicle, causing severe and permanent injuries to the woman driving it.

At the time of the accident, the employee was insured under a GEICO policy that provided coverage for bodily injury and property damage arising out of her use of an automobile, and there was a U-Haul lease agreement that afforded coverage to Tasman and any authorized driver.

The injured driver sued the Tasman employee and Tasman in state court, alleging the company was vicariously liable for its employee’s negligence.

Southern-Owners agreed to defend the company subject to a reservation of rights but filed a complaint in U.S. District Court in Tampa, Florida, seeking a declaratory judgment that it did not owe a duty to defend or indemnify in the case.

The district court ruled in the insurer’s favor and was affirmed by a three-judge appeals court panel. 

The panel said it disagreed with Tasman and the injured driver that an 11th Circuit ruling in a comparable case involving the issue of other, similar coverage was ambiguous. 

Attorneys in the case did not respond to requests for comment.

In January, the 11th Circuit affirmed a $1.1 million bad faith jury verdict against Southern-Owners over its handling of a construction accident in which a worker lost his ability to walk.