3 Significant Ohio Insurance Updates From 2023

As published in an article featured in Law360’s Expert Analysis section.

2023 was a busy year for both sides of the Ohio insurance industry. In this article, Jenna Pletcher and William Peseski delve into three important developments from the previous year to watch moving forward.

The first issue they addressed was the decision of the Ohio Supreme Court to compel the insurer to produce items in discovery related to claims-handling procedure and communications regarding the policyholder's bad faith claim. The Court held that bad faith claims arise from tort and the law of the state with the most significant relationship to the alleged bad faith controls. While the insurer argued the information was protected by attorney client privilege, Jenna and Will point out that in Ohio, attorney-client privilege does not shield from discovery documents that reveal a defendant’s bad faith.

The second issue highlights the ongoing marijuana legalizations throughout Ohio and the rest of the country. In an incident where a driver injured multiple people under the influence of marijuana, the driver’s insurance denied coverage citing an exclusion for criminal conduct and use of a controlled substance.

An Ohio Court of Appeals sided with the insurer, noting that although alcohol-related exclusions are not enforced because they are against public policy, marijuana use nonetheless could fall within an enforceable exclusion because marijuana was federally illegal and only legal for medical use in Ohio.

Jenna and Will state that in light of Ohio’s recent legalization of recreational marijuana, this will be an important area to watch, saying “Ohio courts normally do not allow insurance carriers to avoid coverage for alcohol-related OVI injuries, as doing so would be against public policy and would harm victims who are not negligent or otherwise at fault.” Adding, “it is likely that this issue will continue to appear before the courts, and marijuana may soon be treated similarly to alcohol for insurance coverage purposes due to the changes in state law.”

The third matter they examined dealt with another criminal conduct situation where an adult nursing facility resident attacked another resident. The Ohio Supreme Court held that the care facility’s CGL insurance policy had an assault-or-battery exclusion that applied, even though the attacker was found not guilty of felonious assault. The policy, however, did not define “assault” or “battery.” Due to the exclusion being in a civil policy, the Court applied the civil law definitions, which do not require criminal intent for the exclusions to apply.

Jenna and Will emphasize the importance of cautiousness when dealing with undefined terms, even if they are commonly used and understood terms in criminal law. In the article, they explain that “what this means for policyholders is that policy exclusions for acts such as assault or battery may be broader than they seem at first glance and that more conduct may be excluded under the policy than expected.”

The full article can be found by clicking this link.