Extrinsic Evidence, Or Eight Corners? Texas Court Sheds Light On Determining the Duty to Defend

Last year, the Texas Supreme Court adopted a narrow exception to the state’s eight-corners rule, and allowed the consideration of extrinsic evidence to determine the duty to defend. The exception arguably raised more questions than it resolved.

Last month, a Texas federal court answered some of these questions by rejecting an insurer’s attempt to introduce extrinsic evidence under the newly minted exception.

Texas permits few, if any, deviations from its eight-corners rule, which determines an insurer’s duty to defend by only considering the operative pleading and the terms of the policy, without any regard to extrinsic evidence or facts.

This protects policyholders by erring on the side of defending claims, even if coverage is questionable.