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 Tennessee, the eight-corners rule is utilized to ascertain whether an insurance company has an obligation to defend its policyholder in a lawsuit. This rule involves a comparison of the lawsuit's allegations (the 'four corners' of the plaintiff's pleading) with the terms of the insurance policy (the 'four corners' of the policy). Tennessee courts typically do not consider facts outside of these documents when applying the eight-corners rule and assume the plaintiff’s allegations to be true for the purpose of determining the insurer's duty to defend. However, if there is evidence of collusion or fraud between the plaintiff and the insured that could affect the insurer's duty to defend, courts may consider such extrinsic evidence. The rule is generally applied in a manner that favors the insured, meaning that any ambiguity or doubt is usually resolved by finding that the insurer has a duty to defend the insured against the claims.