Can Your Government Suffer a “Bodily Injury”? Maybe.

Earlier this week, the Ohio Supreme Court agreed to review an appeal to resolve the question of whether governmental costs incurred responding to the opioid epidemic constitute “damages because of bodily injury” under a commercial general liability policy issued to an opioid wholesaler. In the underlying litigation, the First District Court of Appeals reversed the trial court decision and held the governmental entities’ allegations that they incurred medical expenses to treat injuries which related to addiction triggered by the insurer’s duty to defend. According to the insurer, Supreme Court review is necessary to address the meaning and scope of “damages because of bodily injury,” an issue of first impression in Ohio. The insurer claims the First District misinterpreted the provision, which was added to the standard CGL form to clarify that derivative claims for a death resulting from a bodily injury during the policy period are covered. In addition, according to the insurer, there is a strong public interest in clarifying the coverage issue, especially in light of increasing “novel suits by governmental entities seeking to recoup expenditures for public services under public nuisance theories[.]” The insurer argues that any rule which requires a defense of claims for the cost of government services to abate a public health threat will result in widespread confusion in future cases and will ultimately allow damages for purely economic losses. The case also involves an interpretation of the “loss in progress” provision and the impact of the wholesaler’s prior knowledge of opiate addition on that condition precedent to coverage.