Analysis brought to you by FC&S Expert Coverage Interpretation, the recognized authority on insurance coverage interpretation and analysis for the P&C industry. ind out more — or to learn how to find answers to YOUR coverage questions — nuco.com. Question: We are filing with multiple states an excess liability exclusion that contains a controlled substance exclusion. The exclusion is identical to ISO's controlled substances exclusion in multiple forms that excludes controlled substances including but not limited to narcotics, marijuana, etc. unless prescribed by a licensed health professional. One state particularly has objected to this language (even though it has approved this language in ISO filings) citing new concerns about the opioid epidemic, and that catch-all exclusions such as this could potentially exclude any claim that can be tied back to opioids, rendering an insured without coverage for a loss that would have otherwise been covered but for the tie to opioids. It is our opinion that the intent of this exclusion is not to exclude a covered loss solely because it can be traced back to the use of opioids, but rather to exclude losses that arise directly out of illegal drug use, such as an overdose or the selling or manufacturing of drugs. Our question is, is there potential that an insurer could exclude a loss solely because of illegal opioid use? For example, an employee on non-prescription opioids drives a forklift into a propane tank and causes third-party property damage or bodily injury. Could this exclusion apply due to the "use" of a controlled substance?

— Massachusetts Subscriber

Answer: Yes, it would. The exclusion is specific in that drugs that fall into a certain category according to the Federal Food and Drug law are excluded unless the person is using them under the guidance of a medical professional. Opioids are not available over the counter; therefore, any non-prescription opioid is illegal. If an employee is using opioids at work that he obtained from a relative, friend, or bought off the street, and using the drug causes injury or damage, then that loss will be excluded. If the employee has a prescription from a health professional, then there will be no problem, the language is clear that when the drug is used under the guidance of a health professional the exclusion does not apply. Any other use of the drug however, will be excluded. |

Drug use and intentional acts

Question: Under the standard ISO homeowners' policy (HO 3), we have a 17-year-old insured who caused damage to the neighbor's property by throwing rocks at the home. The 17-year-old was under the influence of drugs and was hallucinating. Would the intentional acts exclusion apply?

— Wisconsin Subscriber

Answer: The policy excludes bodily injury or physical damage arising out of the use, sale, manufacture, delivery, etc. of controlled substances as defined by the Federal Food and Drug Law. Controlled substances include but aren't limited to LSD, cocaine, marijuana, and all narcotics. The only exception is medications being used at the direction of a licensed physician, and the person must be following the orders of said physician. It doesn't sound like the 17 year old was following his physician's orders. Therefore, the damage caused by his throwing rocks, whether or not intentional, is excluded because he was under the influence of drugs. See also: |

• Top 10 causes of death: Opioids now kill more people than cars do
• Marijuana and insurance policy disputes