Pennsylvania's "four corners" rule "does not permit an insurer to make its coverage decision with blinders on, disclaiming any knowledge of coverage-triggering facts. Quite the opposite, knowledge that an injured employee has a claim under the Workers' Compensation Act must be factored into a determination of whether his allegations in an underlying tort complaint potentially trigger an obligation on an insurer to provide coverage for a defendant in the underlying case. (Credit: iStock)
For many years, Pennsylvania has been known as a strict "four corners" rule jurisdiction when it comes to determining an insurer's duty to defend. Under that rule, an insurer must compare the allegations in the underlying complaint with the language in the insurance policy without considering any extrinsic evidence to determine if it has a duty to defend. However, courts in Pennsylvania have held that insurers may need to take a deeper look when determining whether they have a duty to defend an additional insured in a lawsuit brought by an employee of the named insured.
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