INSURANCE-RELATED COURT CASES
Digested from case reports published online
Bad day for Rite Aid
The question before the appellate court was whether policies that cover lawsuits “for” or “because of” personal injury require insurers to defend their insureds when the plaintiffs in the underlying suits expressly disavow claims for personal injury and seek only their own economic damages.
The superior court decided that Rite Aid’s insurance carriers were required to defend it against lawsuits filed by two Ohio counties to recover opioid epidemic-related economic damages. As the court held, the lawsuits sought damages “for” or “because of” personal injury because there was arguably a causal connection between the counties’ economic damages and the injuries to their citizens from the opioid epidemic.
The court stated that three classes of plaintiffs are within the scope of the insured’s personal injury coverage—the person injured, those recovering on behalf of the person injured, and people or organizations that directly cared for or treated the person injured. To recover under the insured’s policy as a person or organization that directly cared for or treated the injured person, the plaintiff must prove the costs of caring for the individual’s personal injury. Here the plaintiffs, governmental entities, sought to recover only their own economic damages, specifically disclaiming recovery for personal injury or any specific treatment damages. Thus the carriers did not have a duty to defend Rite Aid under the governing policy.
The appellate court reversed the superior court’s decision.
ACE American Insurance Company, Illinois Union Insurance Company, ACE Property & Casualty Company, and Federal Insurance Company v. Rite Aid Corporation and Rite Aid of Maryland, Inc.—Superior Court of the State of Delaware—January 10, 2022—No. N19C-04-150.