Opioids litigation, with over 2,000 cases brought by state and local governments against dozens of defendants including opioids manufacturers, retailers and distributors, is being closely watched by insurers. Is it the “next asbestos,” which resulted in a $100 billion loss for insurers? Or is it the “next tobacco,” which, despite resulting in a $246 billion loss for tobacco manufacturers, was not a significant insurance event?

On the surface, opioids litigation looks like tobacco for two reasons: in both, the plaintiffs are governments seeking reimbursement for government expenses from a commercially driven public health crisis, and the manufacturers are mostly not covered by insurance. But a deeper look at opioids litigation suggests that it is something new. It is a broader attempt to address a public health crisis, with a broader range of defendants from the full stream of commerce, and with multiple levels of government seeking reimbursement, including municipalities, counties and tribal nations.

As the tobacco litigation model is broadened, the risk of insurance losses is growing. In opioids, if the distributors and retailers are found liable, there will likely be insurance losses. More generally, if this type of litigation is pursued against other public health issues, the insurance exposure could be much larger. Insurers, looking to manage their risk accumulations in casualty, should ask themselves, “What might be the next opioids, and am I likely to be insuring it?”