On July 19, 2016, the United States Court of Appeals for the Seventh Circuit held in Cincinnati Ins. Co. v. H.D. Smith, LLC, No. 15-2825 that a general liability insurer’s duty to defend suits seeking damages “because of bodily injury” was triggered when the state of West Virginia sued a pharmaceutical distributor, alleging it had contributed to an epidemic of prescription drug abuse, causing the state to spend money to care for addicted citizens.

Simply because a lawsuit seeks damages not directly related to the injury sustained, it should not stand as an impediment to coverage. The decision is also a reminder that subtle variations in policy language can mean the difference between a defense for an entire lawsuit and no defense at all. Retailers and policyholders should carefully review policy language, even in provisions that appear formulaic, and not accept insurers’ interpretations at face value.

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