Ohio Supreme Court accepts review of duty to defend in opioid litigation.

The Ohio Supreme Court has accepted a discretionary appeal from the decision of the First District Court of Appeals, finding that an insurer is obligated to defend a pharmaceutical distributor in lawsuits brought by various states and governmental agencies for costs incurred in the opioid epidemic. The Court of Appeals held that the damages sought in the underlying cases included damages “because of bodily injury,” even though the plaintiffs were all government agencies, not individually injured persons. The decision also addressed the “loss-in-progress” provision and fortuity as a prerequisite to coverage under an occurrence policy. The Court of Appeals held that the insured had the burden of proving that the loss-in-progress provision did not apply, but nonetheless, there was an issue of fact as to whether the insured’s general knowledge of the opioid crisis at the time of policy inception barred coverage. The Ohio Supreme court has accepted review on two issues:

Commercial general liability policies cover an insured’s liability for an “occurrence” causing “bodily injury” to specific persons. They do not cover an insured’s liability for corporate practices that allegedly cause governmental entities to sustain economic losses for increased governmental services.

The “loss-in-progress” provision is a general condition precedent clarifying that coverages do not apply to “bodily injury” that the insured knows has occurred, in whole or in part, before the policy period. Knowledge of the nature and scope of any damages resulting from the “bodily injury” is unnecessary.

This case is of interest because what constitutes an occurrence under a CGL policy is often litigated but not well developed under Ohio law, and the “loss-in-progress” and fortuity requirement for insurance has never been well developed under Ohio law. These two issues are likely to have broad application to other coverage cases. The case is in the middle of briefing in the Supreme Court and should be argued later this year.

^{Case Law Alerts, 2nd Quarter, April 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2021 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.}