to defend when the insurer has actual
knowledge of facts establishing such a
reasonable possibility of coverage.
E Another example is Nebraska, which
requires an insurer to defend if a reasonable investigation of the actual facts
by the insurer would or does disclose
facts that would obligate the insurer to
E Maryland also allows an insured to
establish the potential of coverage under
an insurance policy through the use of
E Arizona, Arkansas, California, Iowa,
Michigan, and Minnesota have adopted
the majority approach of allowing extrinsic evidence, outside of the four corners
of the complaint, to be used in determining if there is a duty to defend.
The majority viewpoint is rooted in a
pro-insured principle that an insurance
contract is a contract of adhesion, and
the only way for the insured to get the
benefit of its bargain is to have the insurer
examine all known facts to determine if
the duty to defend has been triggered.
To allow the insured to be at the whim
of a third party’s pleading to determine
whether the insured should get what it
bargained for—a defense—does not give
the insured the benefit of that bargain.
should carefully examine the allegations
of a complaint to ensure that the plain-
tiffs are not, through artful pleading,
bootstrapping themselves to obtain in-
surance coverage by asserting claims of
negligence based on facts that reflect in-
tentional rather than negligent conduct.
E Arkansas and Rhode Island also do
not allow for the consideration of extrin-
sic evidence in making a determination
of whether the insurer’s duty to defend
and indemnify has been triggered.
The Minority Rule
In a minority of states, the four corner
rule is strictly enforced; even if the insurer has extrinsic evidence that would
E A Wisconsin court rejected a request
from the plaintiff to consider extrinsic
evidence when determining whether the
duty to defend had been triggered by the
E The duty to defend in Texas is not affected by facts learned pre-suit.
E Under Louisiana’s “Eight Corners Rule,”
the court must assess whether there is a
duty to defend by applying the allegations
of the complaint to the underlying policy
without resorting to extrinsic evidence.
E Hawaii adheres to the complaint allegation rule; the duty to defend is limited
to situations where the underlying pleadings have alleged a claim for relief, which
falls within the terms for coverage of the
insurance contract. However, the Hawaii
Supreme Court has cautioned that courts
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