United States: The Opioid Crisis And The Products-Completed Insurance Exclusion

 President Donald Trump has declared the opioid crisis a public health emergency.1 Cities and municipalities across the country have reacted to the crisis by filing suit against pharmaceutical manufacturers, distributors and others. A judicial panel consolidated over 400 federal opioid cases into an MDL before U.S. District Judge Dan Polster of the Northern District of Ohio.

Against the mounting mass litigation, pharmaceutical companies have naturally turned to their insurance carriers. However, several courts, including the 11th U.S. Circuit Court of Appeals, have held that insurers issuing commercial general liability policies with a "products-completed exclusion" may have no duty to defend or indemnify against these claims.

Depending on the type and limits of insurance carried, and the specific allegations asserted, those in the opioid chain of manufacturing and distribution may have no insurance coverage under their CGL policies.


CGL policies are purchased by businesses to protect against liability occurring as a result of business operations at designated and insured locations. Coverage under CGL insurance policies is most often triggered by allegations of bodily injury, property damage or personal and advertising injury.

Standard CGL policies tend to exclude coverage for product liability. In fact, the "products and completed operations hazard exclusion" or "products-completed operations hazard exclusion" found in most CGL policies excludes coverage for bodily injury arising out of or resulting from the insured's products.

Products/completed operations coverage and other specialized policies are available and generally insure against losses arising from an insured's completed operations or products.

This analysis focuses specifically on whether a standard CGL insurance policy excluding products would provide coverage for those companies named in opioid claims.


The majority of opioid lawsuits allege that the pharmaceutical industry created an artificial market for their opioid products, resulting in a foreseeable over-supply of addictive pain medication. Accordingly, this over-supply led to excessive opioid abuse and a resulting economic strain on governmental services.

States and other governmental entities are alleging substantial opioid-fueled burdens on their taxpayer-funded services, including law enforcement, medical and social services, and court systems.

While it is difficult to precisely measure the overall monetary cost of this crisis, the White House estimates the number at more than $504 billion.

 States and municipalities are hoping to recover against the pharmaceutical manufacturers and distributors for these immense damages just as they did against "Big Tobacco," and as they attempted to do against gun manufacturers, for their alleged roles in creating similar public health problems.

As in the tobacco and gun lawsuits, the courts will be asked to determine whether insurers are ultimately responsible for these costs. Recent case law indicates that CGL policies that exclude products are generally not required to respond to opioid claims.

The first line of defense of a CGL insurer would be that there is no bodily injury claims in the opioid suits.

For example, in its successful motion for summary judgment in Travelers Property Casualty Co. v. Anda Inc., Federal Insurance Co. argued that the economic damages West Virginia claimed against wholesale pharmaceutical distributor Anda Inc. did not constitute damage "for" or "because of" bodily injury as required under the applicable CGL policy.2

Other federal courts had already considered this issue and held that there was no duty to defend where the state sought only economic damages but did not allege "bodily injury," as such injury is required to trigger coverage under CGL policies.3

The court in Anda agreed that the damages alleged by West Virginia in the underlying action were for economic harm, not bodily injury.4

As its second proposition, Federal argued that even if the court found that the damages were triggered because of bodily injury, and therefore covered, coverage would still be excluded under the products-completed exclusion under the Florida Supreme Court's decision in Taurus Holdings Inc. v. U.S. Fidelity & Guaranty Co.5 The District Court did not reach the second question.

On appeal, however, the 11th Circuit addressed the products exclusion issue without considering the bodily injury issue.

It held that the products-completed operations exclusion precluded coverage based on its earlier coverage decision in Taurus, which was based on an appeal from a dismissal of a lawsuit against gun manufacturers. The suit claimed that the manner in which gun manufacturers made, distributed and marketed firearms contributed to the gun violence epidemic.6

The 11th Circuit acknowledged, as Federal had argued below, that the analysis in Anda paralleled that of Taurus, as the legal questions and factual circumstances revolving around opioid and gun manufacturers and the use and misuse of their products were strikingly similar.

The municipalities that brought suit against gun manufacturer Taurus alleged that the excessive and unsafe manner in which they manufactured and marketed guns contributed to a culture of gun violence, which took a toll on state resources.

Similarly, in Anda, the state of West Virginia sued Anda for knowingly or negligently flooding the West Virginia market with opioids. The state sought compensation for the economic costs incurred due to the opioid crisis, including increasing expenses and resources dedicated to law enforcement and police operations, hospitals and first responders, and jails and prisons, among others.

In both Anda and Taurus, the insureds sought coverage under their policies from various insurers, which in turn pursued declaratory actions alleging that they had no duty to defend as no coverage existed under the CGL policies.

The crux of both the products-completed operations exclusion in Anda and Taurus CGL policies is the "arising under" language. In Taurus, the 11th Circuit certified to the Florida Supreme Court the question of whether the economic burden on the municipality for services rendered in response to gun violence "arose out of" the use of guns.

The state high court found that the phrase "arising out of" was unambiguous and subject to broad interpretation, and concluded the damages claimed "originated from" or "had a connection to" Taurus gun products. Thus, it was affirmed that the products-completed exclusion of the CGL policies barred coverage because the damages claimed arose from the product.

Furthermore in Anda, the breadth of the "arising under" language appeared to encompass the need to establish bodily injury. The Anda court likewise applied this logic to opioids and found that the causal connection with alleged injuries, bodily or otherwise, was sufficient to meet the "arising out of" threshold.

Accordingly, the 11th Circuit concluded that "all the underlying claims, if covered at all, are embraced within the [products/ completed operations exclusions], which render any coverage inapplicable."7 As such, there was no duty to defend under the CGL policy.


The Anda decision will be influential in the wave of lawsuits by states, municipalities, counties and cities against large drug manufacturers and distributors. There are hundreds of pending lawsuits asserting liability against prescription drug makers for their alleged role in the opioid epidemic, with new cases filed almost every week.

As states seek legal recourse against the pharmaceutical companies, these companies will likely continue to test legal arguments to invoke coverage. However, if the insured's CGL policy contains a products-completed exclusion, the courts will be influenced by and likely adopt the reasoning in Anda and its progeny to exclude coverage for harm arising from the companies' products.


1 The Centers for Disease Control and Prevention estimates that of the 63,000 deaths due to drug overdose in the United States in 2016, a record 42,249 were related to opioids. Official numbers for 2017 are not yet available. U.S. Ctrs. for Disease Control and Prevention, Drug Overdose Deaths in the United States, 2017 NCHS Data Brief No. 294, http://bit. ly/2IGMLjb.

2 Federal Insurance Co. and Great Northern Insurance Co.'s Motion for Final Summary Judgment, Travelers Prop. Cas. Co. of Am. v. Anda Inc., No. 12-cv-62392 (S.D. Fla. Oct. 20, 2014), 2014 WL 11307563.

3 Cincinnati Ins. Co. v. Richie Enters. LLC, No. 12-cv-186, 2014 WL 3513211 (W.D. Ky. July 16, 2014).

4 Travelers Prop. Cas. Co. of Am. v. Anda Inc., 90 F. Supp. 3d 1308 (S.D. Fla. 2015).

5 Taurus Holdings Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528 (Fla. 2005).

6 Likewise, the issue of bodily injury was rendered moot by a California appeals court in comparison to the dispositive products/completed operations exclusion in a decision that subsequently fell in line with the 11th Circuit's judgment. See Travelers Prop. Cas. Co. of Am. v. Actavis Inc., 16 Cal. App. 5th (Cal. Ct. App., 4th Dist. 2017).

7 Travelers Prop. Cas. Co. of Am. v. Anda Inc., 658 Fed. Appx. 955, 956 (11th Cir. 2005).

Originally published in Westlaw Journal Insurance Coverage

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions