Just as the Ohio and Delaware supreme courts gear up for oral argument – September 8th and 22nd, respectively – on whether insurers must defend opioid distributors in lawsuits related to the opioid crisis, Hunton Andrews Kurth Partner Syed Ahmad weighed in with the policyholders’ prospective for Law360. “These appeals are significant,” Ahmad explained (and insurers’ counsel agreed), “because of the potential far-reaching impact on the scope of general liability coverage.”
Both cases should address the threshold requirement of whether the claimants seek to hold the opioid distributors liable “because of” opioid-related bodily injury. This is because a policy’s insuring agreement sets out the scope of coverage: “We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’… to which this insurance applies.” This phrase is the starting point for any coverage analysis. Although insurers have been quick to raise exclusions, Ahmad clarified that those provisions are secondary to the “because of” debate.
Indeed, both decisions on appeal before the Ohio and Delaware courts focused their analysis on the “because of” inquiry, citing the Seventh Circuit’s logic in Cincinnati Ins. Co. v. H.D. Smith LLC, 829 F.3d 771 (7th Cir. 2016). In H.D. Smith, the court found that a pharmaceutical distributor’s general liability policy covered, at least in part, West Virginia’s claim for amounts it spent caring for drug-addicted citizens, since West Virginia incurred those costs “because of bodily injury” to its citizens. Id. at 777.
Insurers arguing for a contrary meaning of “because of,” Ahmad cautioned, “are trying to avoid the plain meaning and resorting to technical arguments to avoid having to provide coverage for the massive exposures involved in the opioid litigation.”