The applicants sought declarations concerning insurers’ duty to defend multiple opioid class actions, the insureds’ right to select a single defending policy, allocation of defence costs, exhaustion of SIRs and deductibles, and the terms on which insurers could receive defence-side reporting.
The court held that, subject to exhaustion of the relevant SIRs or deductibles, each applicant could select any single policy under which there was a duty to defend, and the selected insurer was required to pay all reasonable defence costs associated with covered claims even if those costs also furthered uncovered claims.
Time-on-risk allocation was accepted only as an equitable mechanism among insurers with concurrent obligations, not as a basis to reduce contractual defence obligations owed to the insureds.
The court further held that pre-tender defence costs could attract relief from forfeiture, that disputed SIR exhaustion issues required a trial, and that insurers seeking privileged defence-side reporting had to maintain robust ethical screens through a defence reporting agreement because both party-based and coverage-based conflicts were present.
