The eight-corners rule is a rule applied by courts to determine whether an insurance company (insurer) has a duty to defend a claim made against its insured policyholder (insured). The eight-corners rule provides that the duty to defend is determined by comparing the “four corners” of the plaintiff’s pleading (lawsuit) with the “four corners” of the liability insurance policy.

In applying the eight-corners rule, courts generally do not consider facts or evidence from outside the four corners of each of these documents and take the plaintiff’s factual allegations in the pleading as true for purposes of determining whether the insurer has a duty to defend.

But some courts have held that outside or extrinsic evidence may be considered if it demonstrates collusion or fraud between the plaintiff and the insured for the purpose of invoking an insurer’s duty to defend.

Courts generally apply the eight-corners rule liberally and resolve any doubts in favor of the insured by finding the insurer has a duty to defend the insured against the claim(s).

In New York, the eight-corners rule is not strictly applied as it is in some other jurisdictions. Instead, New York courts may consider extrinsic evidence outside the 'four corners' of the complaint and the insurance policy when determining an insurer's duty to defend. This means that if there is evidence that could affect the insurer's duty to defend, such as facts indicating fraud or collusion, New York courts are willing to look beyond the complaint and the policy language. However, the courts still generally construe ambiguities in the insurance policy in favor of the insured and tend to resolve doubts about the duty to defend by requiring the insurer to provide a defense. This approach aligns with the principle of providing the insured with the broad protection they are entitled to under their insurance policy.