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Insurers don’t have to defend, indemnify opioid distributor


A federal appeals court on Friday affirmed a lower court ruling and held two insurers do not have to defend or indemnify an opioid distributor.

Murray, Kentucky-based Quest Pharmaceuticals Inc., a pharmaceutical wholesale distributor, is being sued in about 75 lawsuits for its allegedly wrongful conduct in promoting and distributing prescription opioids, according to the ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati in Westfield National Insurance Co.; Motorists Mutual Insurance Co. v. Quest Pharmaceuticals Inc.

Quest reported the lawsuits to Westfield Center, Ohio-based Westfield National Insurance Co., an Ohio Farmers Insurance Group unit that had insured Quest from 2015 to 2017, and Columbus, Ohio-based Motorists Mutual Insurance Co., which had insured it from 2004 to 2015.

Westfield and Motorists each filed suit in U.S. District Court in Paducah, Kentucky, seeking declaratory judgments they had no duty to defend or indemnify Quest in the underlying litigation. The district court ruled in the insurers’ favor in almost identical decisions. 

The cases were consolidated, and the 6th Circuit affirmed the lower court’s rulings on appeal. 

Both insurers’ policies provided coverage for damages “because of bodily injury,” according to the three-judge appeals court panel’s ruling.

“Based on the plain language of the policies and their overall context and purpose, we believe that the Kentucky Supreme Court would conclude that the insurers have no duty to defend Quest in the underlying lawsuits because they do not seek damages ‘because of bodily injury,’” the ruling said.

“The claims, all of which are for economic damages, are simply beyond the policies’ scope.  Because we conclude that there is no duty to defend, there is also no duty to indemnify,” it said.

An insurer attorney had no comment, while Quest’s attorney did not respond to a request for comment.