The Delaware Supreme Court Monday reversed a lower court and held in a divided opinion that Chubb Ltd. units are not obligated to defend Rite Aid Corp. in opioid litigation filed by two Ohio counties.

Rite Aid units have been named in more than a thousand lawsuits by government entities, third-party payors of medical care and individuals seeking damages for costs arising out of the company’s distribution of opioids.

The focus of Monday’s ruling was so-called “Track One” lawsuits filed by government entities.

A 2015 policy issued by Chubb units states it will pay sums the insured becomes legally obligated to pay as damages because of “personal injury” or “property damage,’” according to the ruling in Ace America Insurance Co. et al. v. Rite Aid Corp. et al.

Camp Hill, Pennsylvania-based Rite Aid sought defense coverage for lawsuits filed against it by Cuyahoga and Summit counties in Ohio, the Supreme Court ruling said. The counties’ lawsuits “expressly disavow claims for personal injury and seek only their own economic damages,” the ruling said.

The Delaware Superior Court ruled in September 2020 that Chubb was obligated to defend the drug store chain “because there was arguably a causal connection between the counties’ economic damages and the injuries to their citizens from the opioid epidemic,” the Supreme Court ruling said.

A majority of the Delaware Supreme Court disagreed. “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,” the ruling said.

“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 insurance policy,” the opinion said in overturning the lower court and holding that Chubb had no duty to defend Rite Aid.

The dissenting opinion said Chubb’s duty to defend is broader than its duty to indemnify damages.

“I would find that Rite Aid’s policy provides coverage for some of the damages sought by the Counties, at least potentially,” and affirm the lower court’s ruling, it said.

Attorneys in the case did not respond to requests for comment.