In Louisiana, an insurer’s duty to defend it’s insured typically depends on the “four corners rule,” in which the court examines the allegations contained in the plaintiff’s petition and the terms of the insurance policy. If there is the possibility of coverage, the insurer’s duty to defend is triggered. However, in Sibley v. Deer Valley Home Builders, Inc., 32 So. 3d 1034 (La. App. 2nd Cir. 2010), the court applied the four corners rule by examining not only the plaintiff’s petition, but also the insured’s third party demand against the insurer to determine if coverage might apply for the claims alleged against the insured. No duty to defend was found because the third party demand “did not expand upon the fact that allegations of the plaintiff’s petition so as to show that those claims raised allegations of liability falling under the coverage of the CGL policy.” Accordingly, the decision indicates that this appellate court would consider the insured’s allegations against its insurer, and not only the plaintiff’s allegations, to determine the duty to defend.
