A football field has only four corners. But, what if you compare two different fields? Now, you have eight corners. In this short example, a Virginia federal court compared only two documents, each with four corners, to decide an insurer had no duty to defend its insured.
A supplier/insured provided a chiller unit to a prime contractor. When the unit didn’t perform as expected, the prime sued the supplier/insured who then, in turn, sought defense and indemnity from the insurer. The court needed only two documents to support its conclusion:
(1) the complaint by prime against supplier/insured and
(2) the insurance policy between insurer and supplier/insured.
(Together, the four corners of each document totaled eight corners.)
To decide if an insurer has a duty to defend, a Virginia State or Federal Court may only look at the allegations in the complaint and the insurance policy to determine if a judgment against the insured will be covered by the policy. If there is a possibility of coverage, then the insurer must defend the insured.