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D.R. Horton-Texas, Ltd. v. Markel International Insurance Co., Ltd.

The duty to indemnify is not dependent on the duty to defend and an insurer may have a duty to indemnify its insured even if the duty to defend never arises. In determining coverage, a matter dependent on the facts and circumstances of the alleged injury-causing event, parties may introduce evidence during coverage litigation to establish or refute the duty to indemnify. Texas Supreme Court, No. 06-1018, 12-11-2009

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Argued September 8, 2009

JUSTICE GUZMAN did not participate in this decision.

In this dispute, a general contractor, as an additional insured on its subcontractor’s commercial general liability (CGL) insurance policy, seeks a defense and coverage from the CGL insurer for alleged construction defects. The insurer claims that it has no duty, under the eight-corners doctrine, to provide a defense because the homeowners’ petition in the underlying liability action did not implicate the insured, the subcontractor that performed the allegedly defective work. Further, because it has no duty to provide a defense, it claims it has no duty to indemnify the general contractor as well. We hold that the duty to indemnify is not dependent on the duty to defend and that an insurer may have a duty to indemnify its insured even if the duty to defend never arises. In determining coverage, a matter dependent on the facts and circumstances of the alleged injury- causing event, parties may introduce evidence during coverage litigation to establish or refute the duty to indemnify. We accordingly reverse the court of appeals’ judgment in part and affirm in part and remand to the trial court for proceedings consistent with this opinion.

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