ABORTION AND CIVIL LIABILITY

Will insurers be caught in the middle?

 Regarding abortion, some states have enacted laws

allowing individuals to sue people who have

had a role in aiding, abetting, or providing an abortion.

By Joseph S. Harrington, CPCU

It’s easy to see why health and medical liability insurers are affected by the U.S. Supreme Court’s decision to overturn the ruling in Roe v. Wade. But why would homeowners and general liability insurers be impacted?

The potential for abortion to impact personal and general liability coverage lies in the growing use of civil justice—“private rights of action”—to promote public policy and the prospect of new types of bodily injury claims arising from abortion disputes.

For decades, civil suits have played a central role in enforcing laws banning unfair discrimination on the basis of race, religion, or other factors. The power to sue for damages allows people harmed by unlawful discrimination to seek redress without having to rely on government enforcement.

Discrimination claims remained outside the purview of general liability coverage, however, as they did not allege bodily injury or property damage. Such claims have, however, spawned the development of employment practices liability insurance as a separate line of coverage.

Regarding property damage, liability insurers have incorporated language into pollution exclusions denying coverage for any “claim or suit by or on behalf of a governmental authority,” thus seeking to protect the insurer against private claims authorized by environmental laws (not always successfully).

Empowering individuals

More recently, some states have authorized individuals to sue school districts over policies regarding transgender students or curricula they deem unduly critical of the United States or any of its citizens.

Although such laws are a departure, they adhere to a premise of common law in that plaintiffs have to establish that they have suffered some direct harm themselves, perhaps by being forced to share a bathroom with someone of a different sex, being denied a spot on a girls’ sports team in place of a transgendered male, or being subjected to harassment or humiliation during a lesson.

That’s not the case regarding a 2022 law in California that allows private individuals to sue anyone who manufactures, imports, or distributes illegal firearms in the state. Under that law, whose constitutionality is disputed, plaintiffs do not need to establish that they suffered harm, only that a violation occurred.

Regarding abortion, some states have enacted laws allowing individuals to sue people who have had a role in aiding, abetting, or providing an abortion. Anyone advising a woman or providing assistance related to the termination of a pregnancy could theoretically be targeted for legal action.

A leading example of such an initiative is a Texas law known as SB8, passed in 2021, which was allowed to remain in effect by the U.S. Supreme Court and subsequently upheld by the Texas Supreme Court. Idaho and Oklahoma passed similar measures in 2022.

Under SB8, any person can sue another person who had a role in helping a woman get an abortion. This feature, condemned as “vigilante justice” by pro-choice advocates, allows a person to sue for damages even if he or she has not suffered direct harm or loss as commonly understood. (The California gun law of 2022 was expressly modeled on Texas SB 8.)

SB8 plaintiffs can win damages of $10,000 if they are successful but are at no risk of having to pay a successful defendant’s cost. (An abortion could be ruled defensible if determined to have been necessary to save the life of the mother.)

SB8 was enacted before Roe v. Wade was overturned, in part to avoid having state-enforced restrictions on abortion overturned while Roe was still in force. The overturning of Roe removes that necessity, but the SB8 approach is still attractive to anti-abortion legislators because it creates incentives to mobilize citizens against abortion while relieving public officials of the task of investigating and prosecuting terminated pregnancies.

Issues to address

The civil justice approach to restricting abortion raises issues homeowners and general liability insurers will have to address.

First, is such a claim a covered occurrence? That question hasn’t come up with private actions to enforce discrimination claims, as those claims for the most part did not involve bodily injury or property damage.

Is abortion an example of bodily injury?  It would certainly seem to be so, but state laws authorizing civil actions against abortion do not explicitly characterize it as such. If abortion is an example of bodily injury, then bodily injury to whom? The fetus, the woman carrying it, or both?

And bodily injury by whom? States seeking to prohibit abortion sometimes recognize the “personhood” of the fetus while forswearing any desire to punish women who authorize the abortion of their fetuses.

If a fetus is a person with its own rights, it would seem to follow that liability coverage for a pregnant woman authorizing an abortion would be excluded as an intentional injury.

But what would happen if a pregnant woman authorized an abortion to protect her own health? If that defense was challenged in a civil suit, would a homeowners policy provide defense coverage on the basis that the abortion constituted “use of reasonable force to protect people and property?”

How is it not …?

At this point, risk professionals may be wondering how policy provisions drafted for third-party bodily injury could ever lead to exposure to claims from a self-directed act like abortion. So, is all this extravagant speculation?

Well, ask yourself this: How would a claim against an insured over an abortion not be regarded as a bodily injury claim? An insured who receives a notice of action will certainly think it is.

States that permit abortion may insist that insurers defend their constituents against abortion actions from jurisdictions where abortion is banned. Even states that authorize private actions against abortion may insist that homeowners insurers and general liability insurers cover certain defendants. By doing so, anti-abortion states can help protect ordinary citizens while focusing enforcement action on abortion providers.

There is another reason why today’s abortion controversy may force some fundamental rethinking of the application of liability insurance: Abortion is common, a lot more common than many people realize. It’s estimated that up to a quarter of American women may have an abortion at some time in their life, and the networks of people involved in helping them do so is even greater.

Even if restrictions on abortion reduce the incidence of it, there will still be tens of thousands of individuals a year potentially subject to abortion claims.

The intended effect of Texas SB8 and similar measures is to make everyone hesitate before taking action that might contribute to an abortion. The result could be a very wide net that snares liability insurers.

The author

Joseph S. Harrington, CPCU, is an independent business writer specializing in property and casualty insurance coverages and operations. For 21 years, Joe was the communications director for the American Association of Insurance Services (AAIS), a P-C advisory organization. Prior to that, Joe worked in journalism and as a reporter and editor in financial services.