Insurance protecting commercial insureds from most liability exposures other than automobile and professional liability. See also Casualty insurance; Commercial general liability insurance; Contractual liability insurance.

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The Insurer’s Duty to Defend: A Quick Analysis

Thomas H. Veitch

Langley & Banack, Inc. San Antonio, Texas
(210) 253-7186


The application of the “duty to defend” in liability policies has been a cause of controversy for many, many years. Consequently, there is now an abundance of case law dealing with a variety of issues involving the duty to defend. The case law provides some general guidelines for dealing with these issues. While the precise rules of law may vary from jurisdiction to jurisdiction, the guidelines are much the same. The following are some general rules applied by Texas courts and other jurisdictions following the “Eight Corners Analysis” regarding a duty to defend.

  • The insurer’s duty to defend is a contractual duty determined by the provisions of the insurance policy.
  • The eight-corners rule emanates from the fact that only two documents are considered relevant to the determination of the duty to defend, i.e., the policy and the pleadings.
  • Jurisdictions utilizing the eight-corners rule generally apply a liberal interpretation to the allegations in the petition and resolve any doubt as to the duty to defend in favor of the insured (but will not read facts into the pleadings).
  • The issue whether a duty to defend exists is a question of law.
  • The insured has the initial burden to establish that its claim falls within the scope of coverage provided by the insurance policy.
  • Thereafter, the burden shifts to the insurer to prove that the claim falls within a policy exclusion or a limitation of coverage.
  • If the insurer is successful in proving the applicability of an exclusion, the burden then shifts back to the insured to prove that an exception to the exclusion causes the claim to fall within coverage.
  • The duty to defend is distinct from and broader than the duty to indemnify.
  • Even though a duty to defend exists, there may be no duty to indemnify. 
  • On the other hand, if there is no duty to defend, there will generally be no duty to indemnify.
  • An insurer’s duty to defend is triggered if the factual allegations and the pleadings potentially support a covered claim.
  • When the pleading does not state facts sufficient to clearly bring the case within or without coverage, a determination must be made as to whether or not the complaint is potentially within the coverage of the policy.
  • A duty to indemnify is based on whether the alleged facts are actually established; for example, a ruling of the court or the findings of the jury.
  • If an insurer owes a duty to defend any portion of the suit, the insurer is obligated to defend the entire suit.
  • Generally, facts outside of the pleadings (extrinsic evidence) are not deemed material to the court’s determination. This is the case even if such facts can be easily ascertained.
  • In making the determination of a duty to defend, the truth or falsity of the allegations in the pleadings are not a factor.
  • Likewise, what the parties know or believe to be the true facts is not a factor to be considered.
  • The duty to defend analysis focuses on the factual allegations in the pleadings rather than on the legal theories alleged in the pleadings. For example, a mere recitation that the insured was negligent is not determinative of negligence. The focus must be on facts supporting such a contention.

Summary

The foregoing are factors commonly relied upon and applied by the courts in a duty to defend analysis. Accordingly, consultants or claims people will want to consider these factors when determination of a duty to defend is at issue.

Thomas H. Veitch is a partner with the law firm of Langley & Banack, Inc. in San Antonio. He has been associated with the industry business for over 40 years, serving in claims adjusting, underwriting, sales agent, and branch manager positions prior to commencing the practice of law in 1973.

Mr. Veitch has earned professional insurance designations of CPCU, CIC and CLU. His practice encompasses experience in claims adjusting, underwriting, sales and field management positions, insurance defense work, agency consultation in mergers, acquisitions and valuations, mediation, expert witness/consulting, and similar insurance law matters.

Thomas H. Veitch at Langley & Banack

Neither this article on this web site nor transmissions between you and Insurance Expert Network, LLC through this web site are intended to provide legal or other advice. Applicable laws concerning this vary by jurisdiction.

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