Insurance coverage

Unanswered Questions After Dobbs Part VII: Insurance Coverage Issues

Unanswered Questions After Dobbs Part VII: Insurance Coverage Issues for Policyholders

In our seventh episode of “Unanswered Questions After Dobbs,” Reed Smith’s Reproductive Health Task Force discusses the potential impact of the Dobbs opinion on commercial policyholders.

Following the US Supreme Court’s opinion in the Dobbs case, more companies have stepped up to provide benefits to employees who need to seek reproductive care in other states. Questions and issues will continue to arise that could involve corporate liability insurance programs, especially as states with restrictive abortion laws threaten to impose civil and criminal penalties on companies that seek to provide benefits to their employees.

This article provides examples of insurance coverage questions and issues that commercial policyholders and employees may face as a result of the Court’s opinion.

Unanswered questions after Dobbs

• States with restrictive abortion laws could impose criminal and civil liability on employees seeking to leave the state to receive treatment that is illegal in their home state. Will any of these liabilities, including defense costs, be covered by liability insurance offered to employees?

• Some state lawmakers are threatening to impose liability on companies that provide benefits to their employees for traveling out of state for health services that are now illegal in their home state. How might business insurance policies respond to these newly created liabilities?

• To the extent that lawsuits assert claims arising from alleged harm to a fetus, or otherwise allege “bodily injury”, would such claims trigger potential coverage under liability policies covering claims for liability arising from bodily injury?

• Some state lawmakers are considering introducing legislation allowing shareholders to sue corporations for spending company funds on benefits for employees who must travel out of state for prohibited medical treatment, such as ‘abortion. How will A&D insurance respond to such claims?

• Lawmakers have also threatened to pass laws prohibiting companies from doing business in the state if the companies offer perks that facilitate out-of-state abortion services. If companies offer such benefits and then face a local ban, it could lead to litigation from shareholders and possibly others who depend on the company’s services in the relevant state. For example, if a business is prohibited from doing business in a state and that business has contractual or other obligations that it cannot perform as a result, the business may be liable for that situation. It should be assessed whether there is insurance for these liabilities.

• Lawmakers have even threatened to pass legislation prohibiting liability insurance companies from providing coverage to corporations in lawsuits related to the provision of benefits for prohibited medical procedures, such as abortion. Are these laws applicable? Will they be enforced if a cover suit is filed in the jurisdiction that licenses abortion services?

• Companies that provide additional benefits to employees for out-of-state travel may face privacy issues if employees must provide information about their need for these services to employers in order to obtain benefits, or if the state seeks to compel these companies to disclose the names. employees seeking such benefits, among other scenarios. Additionally, to the extent that there is retaliation, harassment or other negative consequences against an employee who takes advantage of these benefits or is suspected of doing so, then such conduct could give rise to employee claims that could potentially fall under an employment practices liability. Politics.

• Should companies proactively resolve these issues with their insurers/seek assurances that insurers will provide coverage for liabilities associated with companies that decide to offer additional benefits to employees wishing to travel out of state?

Stay tuned for our next episode of “Unanswered Questions After Dobbs.”