Walmart Beats AIG in Opioid Epidemic Legal Defense Insurance Row

American Insurance Group Inc. units must pay for Walmart Inc.’s legal defense costs in opioid lawsuits brought by government entities, an Arkansas state court said.

“AIG owes Walmart a defense obligation” under commercial general liability policies for lawsuits alleging the retail and pharmacy chain negligently oversold opioid painkillers, Arkansas Circuit Judge John R. Scott said in a Dec. 29 decision. The judge rejected AIG’s argument that the underlying lawsuits didn’t allege damages stemming from a physical injury—a precondition for coverage.

Walmart has been sued by government entities seeking to recover billions of dollars in financial losses responding to ...