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HNRK Coverage Corner

Facts Outside the Complaint Establish Insurer’s Duty to Defend Personal Injury Action

On November 24, 2020, the First Department issued a decision in Wesco Ins. Co. v. Hellas Glass Works Corp., 2020 NY Slip Op 06975, holding that consideration of facts outside the complaint established an insurer’s duty to defend a personal injury action.

Affirming the motion court’s decision, which was previously discussed on this blog, the First Department explained:

Although the duty to defend is primarily determined by the complaint, wooden application of the “four corners of the complaint” rule would render the duty to defend narrower than the duty to indemnify.  Based on the pleadings in the underlying personal injury action and third-party action, as well as documents and testimony, and the fact that discovery and depositions in the underlying action are still ongoing, it cannot be said that there is no possible factual or legal basis on which either Wesco's automobile policy or MBIC's general liability policy might eventually be held to afford indemnity coverage.

Although under New York law an insurer, with very limited exceptions, cannot rely on facts outside the complaint to avoid its duty to defend, such external facts can trigger a duty to defend, even if, as was the case here with respect to the Wesco policy, the allegations in the complaint, standing alone, would not.

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