Ohio court weighs drug distributor’s insurance coverage fight

By Andrew Welsh-Huggins - Associated Press

COLUMBUS, Ohio (AP) — The Ohio Supreme Court is deciding whether the insurance company for a drug distributor should be forced to provide a legal defense in the company’s fight against government lawsuits related to the opioid epidemic.

The Wednesday court hearing will be focused on a dispute between Hamilton County-based Masters Pharmaceutical and its insurer for eight years from 2010 to 2018, Wisconsin-based Acuity Insurance.

Beginning in 2012, West Virginia and local governments in Michigan and Nevada sued Masters and other opioid distributors, seeking compensation for the cost of increased public services incurred during communities’ battle against the painkiller epidemic. Those included necessary increases in policing, court cases, substance abuse treatment, emergency responses and medical services.

For its part, Masters argues that previous court rulings have upheld the notion that insurance companies must provide a defense for businesses for plausible claims of alleged damages.

Acuity’s policy with Masters requires it to defend lawsuits alleging “damages because of bodily injury,” lawyers for the drug company argued in a court filing earlier this year.

Because governments are suing Masters for the cost of medical care and treatment for citizens allegedly harmed by the company’s distribution of opioids, Acuity must defend Masters against those lawsuits, the lawyers said.

Acuity counters that it’s only liable for coverage of injuries incurred by specific people, not the overall costs of the opioid epidemic to governments.

Government lawsuits are seeking compensation for costs “associated with increased public services, not bodily injury experienced by any one person or persons,” and therefore don’t require Acuity to mount a defense, the company’s attorneys said in a court filing.

Insurance companies are urging the court to side with Acuity in the closely watched case.

“Insurers have no obligations to defend suits seeking massive and unfettered government expenditures for public services,” a group of insurance company associations argued in a February friend of the court brief siding with Acuity.

“To obligate them to do so would drastically deviate from the applicable law, insurance policy terms, and public policy,” the companies said.

A decision in the case isn’t expected for months.

By Andrew Welsh-Huggins

Associated Press