Gun companies, like any insured business, looked to their insurers to pay for their defense and contribute to any necessary legal settlements or judgments. But many firearms makers and sellers have been notified by their insurers that they have no intention of paying what could be astronomical legal bills or any judgments associated with the suits. Several lawsuits already have been filed by industry members against their underwriters in what some gun company officials say could be the beginning of an all-out war between insurers and gun companies. If the insurers walk away from the gun companies, they are looking at defending themselves in 28 major lawsuits. The gun companies are right now looking at the tobacco litigation and asking whether their companies are viable. . . .
Insurance is the last safe harbor for the gun companies.
In September, Maryland's Beretta U.S.A. Corp. sued its insurer, Chubb Corp., in federal court in the Northern District of Maryland after Chubb refused to contribute to Beretta's defense. The National Shooting Sports Foundation also sued Nationwide Mutual Insurance over its refusal to pay the industry association's defense costs in a case pending in New Orleans. In that case, the judge ordered the insurer to pay. Gulf Insurance of New York has stopped writing policies for gun companies, and Frontier Insurance said it no longer will be a player in insuring gun shops. Insurance for gun companies will become scarcer and more expensive, said Robert Hartwig, vice president of the Insurance Information Institute in New York.