In Opioid Master Disbursement Trust II, a/k/a Opioid MDT II v. Ace American Insurance, et al., No. ED113635 (Mo. App. E.D. July 21, 2026), the Missouri Court of Appeals held that a “products-completed operations hazard” exclusion in several insurers’ policies was not ambiguous, holding that the liability policies did not provide coverage for opioid-related bodily injury claims arising from an alleged deceptive marketing campaign promoting the use of opioid products.
The case arose after Mallinckrodt and its affiliated companies, manufacturers of opioids, filed for bankruptcy amid thousands of lawsuits alleging that their opioid marketing practices contributed to the nationwide opioid crisis. As part of the bankruptcy proceedings, the Opioid Master Disbursement Trust II was created to administer settlements and, on behalf of the debtors’ insurance rights, sought coverage under numerous primary, umbrella, and excess liability policies. The Trust argued that the underlying claims centered on misleading “unbranded” marketing campaigns promoting opioids generally, not the debtors’ specific products, and therefore fell outside the policies’ “products-completed operations hazard” exclusions.
Specifically, the exclusion barred coverage for bodily injury included in the “products-completed operations hazard,” a term which, in pertinent part, was defined to mean injury “occurring away from premises you own or rent and arising out of ‘your product.’” The term “your product” was defined in the policies to mean “any goods or products … manufactured, sold, handled, distributed or disposed of by you … and warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of ‘your product’; and the providing of or failure to provide warnings or instructions.”
The Court rejected the Trust’s argument and emphasized that the definition of “your product” expressly included warranties, representations, and failures to provide warnings regarding the insured’s products. Because the underlying lawsuits alleged that the manufacturers falsely promoted opioids as safe and non-addictive increasing overall opioid sales, the resulting bodily injuries “arose out of” the insureds’ products, even with respect to injuries sustained by plaintiffs who never came into contact with products manufactured by the insured, and thereby the claims were excluded from coverage.
The court went on to reaffirm Missouri’s broad interpretation of the phrase “arising out of,” explaining that it requires only a causal connection, not direct or proximate causation. The Court concluded that the alleged marketing campaign and the resulting injuries were sufficiently connected to trigger the policies’ Products-Completed Operations Hazard exclusion.
Then the Court found that the umbrella and excess policies – which afforded coverage for “products-completed operations hazards” risks but only on a claims-made-and-reported basis – did not afford coverage for the lawsuits. The underlying opioid claims were filed years after the relevant policy periods expired, and no claims had been reported during those policy periods, preventing coverage under those policies.
This decision reinforces several important principles of Missouri insurance law. First, court upheld the “arising out of” language and broadly applied the language and held that it is clear and unambiguous. It further concluded that the injuries arose out of “your product” even though much of the basis for the claims hinged upon the marketing and advertising by the drug industry as the cause of the subsequent addictions and misuse of the product. The representations made in broad marketing campaigns may still be treated as representations concerning an insured’s products when those statements are intended to drive product sales, and injuries arising out of that marketing, even injuries caused by the use of opioid products that were not manufactured by the insured, implicate the exclusion. Finally, the court reinforced Missouri law as it relates to claims made and reported policies holding that these provisions remain strict prerequisites to coverage and will be enforced according to their terms under Missouri law.
This opinion provides important guidance and precedence as it relates to the insurance concept of “arising out of”, the “products-completed operations hazard” exclusion, and the strict interpretation of the reporting requirements of claims made policies.
Written by: Russell Watters and Joseph Krispin