Trisura Specialty Insurance Co. moved Monday to dismiss a lawsuit brought by Trulieve Inc. (CSE: TRUL) (OTCQX: TCNNF), arguing that multiple policy exclusions clearly preclude coverage in a wrongful death case involving a Massachusetts facility worker.

The motion, filed in Florida federal court and first reported by Law360, outlines four separate provisions in Trulieve’s commercial general liability policy that Trisura says individually justify denying both defense and indemnity coverage in the case of Lorna McMurrey, who died in January 2022.

“Unlike worker’s compensation insurance or employer’s liability insurance, which exist to provide employers with coverage for injuries that occur to employees during the scope of employment, the sole purpose of commercial general liability insurance is to provide coverage for injuries that occur to the public-at-large,” Trisura’s attorneys noted, citing precedent from the Eleventh Circuit Court of Appeals.

The dispute stems from McMurrey’s death after being exposed to “hazardous airborne ground cannabis dust and/or mold” while working at a Trulieve facility in Holyoke, Massachusetts. The incident gained broader attention after federal health officials identified it as the first documented case of a U.S. cannabis industry worker dying from asthma due to ground cannabis dust exposure.

Among the exclusions cited, Trisura points to policy provisions regarding employer liability, pollution, pesticides and fungal disease, and occupational disease. The insurer argues that because McMurrey was employed by Life Essence Inc., a Trulieve subsidiary also named as an insured party under the policy, her workplace injury claims fall squarely within these exclusions.

“The logic in the exclusion from coverage is simple and compelling: the only coverage intended, and for which the premium has been paid, is the liability of the insured to the public, as distinguished from liability to the insured’s employees,” Trisura’s attorneys wrote, quoting Florida case law.

The case has grown increasingly complex. While the insurance dispute proceeds in Florida federal court, the underlying wrongful death lawsuit continues in Massachusetts state court, where McMurrey’s family filed their initial complaint in November 2023.

In a parallel motion filed last month, Berkshire Hathaway Homestate Insurance Co. is also seeking dismissal and wants the insurance case moved to Massachusetts federal court. The Berkshire unit argues that since McMurrey was employed by Life Essence, coverage under the workers’ compensation and employers liability policy only extends to Trulieve Inc. itself – not to related companies Trulieve Cannabis Corp. or Trulieve Holyoke Holdings LLC. Berkshire had also requested McMurrey’s estate be added as an essential party to the dispute, arguing any ruling on employment status could affect the estate’s interests.

Trulieve, which has previously reached settlements totaling $365,000 with state and federal workplace safety regulators over the incident, sued both insurers in October, after they declined to defend against the family’s lawsuit, Law360 reported at the time. The company argues its $3.1 million policy should cover the claims.

The motion comes just weeks after Massachusetts and federal regulators classified ground cannabis dust as a “hazardous chemical” in direct response to McMurrey’s death.

According to court documents, coverage determination falls under Florida’s “eight corners rule,” which examines only the insurance policy itself and the underlying complaint. The policy covered November 2021 to November 2022, with all three Trulieve entities and Life Essence named as insured.

If Trisura prevails in its motion to dismiss, it could leave Trulieve facing significant legal exposure in the wrongful death case without insurance coverage. The court has not yet scheduled a hearing on the motion.

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The Daily Hit is a recap of the top financial news stories for Wednesday, December 11, 2024.

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