During this Survey period, the Texas Supreme Court clarified that the “fully adversarial trial” requirement established in State Farm Fire & Casualty Co. v. Gandy requires that the insured bear an actual risk of liability for the damages awarded against it or agreed upon to be binding upon its insurer. The supreme Court also evaluated whether an insured can recover policy benefits as “damages” for an insurer’s violation of the Texas Insurance Code, absent evidence that the insured had a contractual right to benefits under the policy. In seeking to “clarify” precedent, the supreme court established “five rules addressing the relationship between contract claims under an insurance policy and tort claims under the Insurance Code.” The Texas legislature also made significant legislative changes to the Texas Insurance Code with the passage of House Bill 1774 and promulgation of Chapter 542A of the Texas Insurance Code. The new statutes modify an insurer’s liability for certain first-party weather-related loses under the Insurance Code. In addition to addressing extracontractual claims, Texas state and federal courts also evaluated various contractual issues, including the extent of an insurer’s subrogation rights, scope of “personal and advertising injury” under a commercial general liability policy, and coverage for additional insureds.
J. Price Collins, et al., Insurance Law, 4 SMU Ann. Tex. Surv. 217 (2018)