%20(1).png)
Can insurers be held liable for the societal costs of the opioid epidemic? The Delaware Supreme Court just said “no”.
The Delaware Supreme Court recently sided with insurers in the opioid coverage dispute, a decision that will likely have significant implications for similar suits. On August 18, 2025, the court held that CVS cannot access its general liability policies issued by AIG, Chubb, and other insurers to cover thousands of lawsuits associated with the opioid crisis.
The court’s reasoning was straightforward, these cases don’t allege “bodily injury” or “property damage” as outlined in these standard liability policies. Instead, the underlying claims focus on economic and public harms, such as costs to governments and communities, rather than individual injuries. The court determined that CVS’s $5 billion settlement addresses the strain the opioid epidemic placed on communities, causing it to fall outside the scope of general liability coverage.
For carriers, this decision is significant. It reinforces that public nuisance suits regarding opioids were never intended to be covered by policies issued for personal injury or property damage. The ruling against CVS is the latest in a series of decisions that have taken a similar stance. On January 10th, 2022, the Delaware Supreme Court again made a similar ruling, this time against Rite Aid, holding that lawsuits brought by Ohio counties seeking economic damages did not trigger coverage under general liability policies because they expressly disclaimed bodily injury claims. Just two years later, on July 30, 2024, the California case of AIU Insurance Co. v. McKesson Corp. concluded with the Ninth Circuit affirming that McKesson’s insurers had no duty to defend. Because McKesson’s alleged conduct was not accidental, the court found it did not qualify as a covered occurrence. A few months after the California ruling, on October 29, 2024, Florida Federal court rejected Publix’s attempt to secure coverage for opioid-related suits, finding that the alleged harms, municipal costs, and community impacts were too diminished to qualify as damages “because of bodily injury” under the applicable policies.
Taken together, these decisions reflect a consistent approach by courts in interpreting general liability policies as not extending to the types of economic and societal harms alleged in opioid-related public nuisance claims.
With this latest Delaware Supreme Court decision, insurers now have another strong ruling to lean on. This provides insurers with further clarity and confidence that courts will continue to enforce the boundaries of general liability coverage. Courts are continuing to place the burden on distributors rather than insurers. This is good news for insurers who can continue to issue policies with the confidence that courts will enforce the distinction between covered losses and broad societal harms.
At Alan Gray, we’re helping clients navigate this evolving landscape where the definition of “covered loss” is being redefined in real time.
What does this mean for the future of insurance and corporate liability? Let's talk.
