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Lawsuits against social media platforms are gaining traction, and new questions are emerging around liability, coverage, underwriting and risk management. Jessica O'Neill examines a recent landmark case and what it may mean for insurers, brokers and their clients.
Published on August 14, 2026
10-minute read
We interrupt your headline-based content consumption for a deep dive into the insurance issues behind the recent verdict in KGM v. Meta Platforms, Inc. et al. (Case No. 23SMCV03371, Superior Court of California, Central District, Los Angeles County) (“the KGM Lawsuit”).
If you’ve developed even the slightest scrolling addiction, you will have already read the headlines stating that Los Angeles County jurors found for the Plaintiff (KGM) and against the Defendants, Meta Platforms, Inc. (Facebook, Instagram) and Google, LLC (YouTube), alleging bodily injury as a result of the addictive design of the Defendants’ platform in the bellwether case—among thousands of others filed (“Social Media Litigation”).
Insurers would be wise to stop scrolling other headlines long enough to read and carefully follow the coverage implications of the Social Media Litigation. The trajectory of these cases suggests that both underwriting and claims strategies must adapt in tandem with increasingly sophisticated theories of liability.
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The KGM Lawsuit
Like the thousands of others filed, the KGM Lawsuit asserted counts for strict liability and negligence in product design and the failure to warn. KGM, who was 17 years old at the time the suit was filed in 2023, alleged that she began using social media without her mother’s consent and despite her mother’s attempts at prevention at the age of 10. The Master Complaint states that the Defendants’ platforms and proprietary tools perpetuated KGM’s addiction to social media and created connections between her and unknown predatory adults, as well as targeting her with harmful and depressive content. Moreover, it was alleged that the mechanisms for reporting such issues to the defendants were defective. The Complaint states that the platforms, as products, were “defective” and “inherently dangerous.” Further, the Master Complaint states that Meta and YouTube “knowingly” and “deliberately” designed the products in a way that ultimately caused KGM to commit acts of self-harm and to suffer bullying, sextortion and mental health harms.
YouTube and Meta raised defenses including lack of causation, First Amendment protections, safety measures in the product and defense under Section 230 of the Communications Decency Act, claiming it could not be liable for harms caused by third-party content under the Act. Plaintiff’s lawyers steered the jury away from the Free Speech and Section 230 defenses by consistently framing the case as one of products liability—even directing the jurors to not consider the specific content KGM saw while using the product, instead calling experts and witnesses to testify on the addictive design aspects of the platform.
On March 25, 2026, the jurors returned a verdict finding Meta and YouTube negligently designed or operated their platforms, that this negligence substantially caused harm to KGM and that they knew or should have known their platforms posed nonobvious dangers to minors yet. The jury further found that Meta and YouTube failed to provide adequate warnings or safety instructions that a reasonable operator would have given, that these failures contributed to the alleged harm and that the defendants acted with malice, oppression or fraud.
Quote from the Bench:"… the Court concludes that the underlying actions exclusively allege harm arising from deliberate conduct."
The jurors assigned fault: 70% to Meta and 30% to YouTube, for KGM’s $3M in compensatory damages and $3M in punitive damages. With thousands of cases left to resolve and a set of cases on the precipice of trial, the ruling in KGM has potentially opened the door to additional verdicts under products liability theories, finding bodily injury can be caused by the addictive design of social media sites.
Plans are in motion to appeal the KGM matter, while simultaneously addressing the thousands of additional lawsuits by individual plaintiffs, local government plaintiffs and state plaintiffs. In fact, just this August, a New Mexico Court determined Meta significantly contributed to New Mexico’s youth mental health crisis and ordered the company to fund $567M in abatement measures ($420M for treatment and $147M for prevention and related services), adding to the already-awarded $375M in civil penalties under New Mexico’s Unfair Practices Act for knowingly exposing children to sexual exploitation and other harms on its platforms, bringing its total liability in the case to $942M before appeals.
One thing seems certain: the tech giants and the multitude of plaintiffs face a long, winding and litigious road ahead.
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Related coverage litigation
There is parallel road, though, that Meta is traveling with its tower of Insurers. Beginning in 2023 after the Social Media Litigation commenced, Meta requested a defense from its Insurers for the separate (now consolidated) lawsuits. Although several individual plaintiff’s claims were defended subject to a reservation of rights, the Insurers mostly denied coverage and forced Meta to provide its own defense in such instances.
In November 2024, seeking Court intervention to determine the parties’ rights under its respective policy, Hartford Casualty Insurance Company (“Hartford”) and Sentinel Insurance Company (“Sentinel”) filed a Declaratory Judgment action (the “coverage action”) in Delaware, which was later joined by several other Insurers. The Insurers asked the Court to find that they owed no duty to defend Meta in the Social Media Litigation, under Business Liability and other Commercial General Liability policies. According to the coverage action, the policies provided coverage for “sums that the insured becomes legally obligated to pay” as damages because of “bodily injury” caused by an “occurrence” and during the “policy period”—standard general liability Insuring Agreement language.
Quote from the Bench:"First, as a matter of law, an insurer’s agreement to defend subject to a reservation of rights does not constitute a concession of a duty to defend or a waiver of its rights to contest coverage. Second, the mere labeling of claims as negligence does not automatically establish a potential for coverage or an accident."
The coverage action argued there was no duty to defend under the policies for several reasons, including that the Social Media Lawsuits: 1) did not allege an “occurrence,” as required to trigger coverage; 2) did not seek damages “because of” “bodily injury”; 3) alleged injury or damages outside the policy period; 4) alleged statutory violations, “professional services” or injury that was “expected or intended”, which are expressly precluded from coverage by exclusion; or 5) alleged equitable relief not insurable under the policies.
Meta filed a Motion to Dismiss or Stay the coverage action, asking the Court to: 1) dismiss the action for failure to state a claim—alleging the Insurers admitted the “potential for coverage” required to induce a duty to defend by offering to defend certain actions under a reservation of rights; 2) dismiss the coverage action in favor of a forum in California State Court; or alternatively, 3) stay the coverage action until the Social Media Litigation resolves, because the coverage action turns on facts to be litigated in the Social Media Litigation.
At the same time, Insurers filed a Motion for Summary Judgment, asking the Court to determine that they did not owe a duty to defend as a matter of law for the reasons set forth in their coverage action.
In Hartford Casualty Insurance Co. v. Instagram, LLC, et al, 2026 WL 623387 (Del. 2026), the Superior Court of Delaware ruled on both Motions. Most critically, the Court found that the Insurers did not owe a duty to defend because there was no “occurrence”.
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Meta’s motions
Addressing first Meta’s request to stay the coverage action, the Court found that its “assessment of whether the underlying complaints allege intentional conduct is a legal inquiry that does not overlap with the factual determination of Meta’s actual intent in the Social Media Litigation.” In other words, the Court found it could determine “solely from what the complaints allege” that the allegations against Meta—even those titled in negligence—were rooted in intentional conduct, a determination the Court could assert as a matter of law and without overlapping any factual determinations to be made in the Social Media Litigation. Thus, there was no legal reason for the stay requested under either California or Delaware law.
Quote from the Bench:"The mere presence of negligence allegations or causes of action does not, by itself, trigger the duty to defend. California courts have repeatedly held that when a negligence claim arises from factual allegations of intentional conduct, the underlying complaints allege exclusively deliberate conduct."
Confronting Meta’s claim that it would be prejudiced by fighting a “two-front war” in both the coverage action and the underlying Social Media Litigation, the Court noted that its no-duty-to-defend ruling would take care of one front, essentially telling Meta: we’ve cleared the battlefield on that side. Additionally, the Court found that a stay in the coverage action would be prejudicial to the Insurer, not Meta, in that it would require the Insurer to provide a defense they did not legally owe.
Next, the Court addressed Meta’s arguments that the matter should be stayed or dismissed in favor of the California State Action that Meta filed after the Insurer’s declaratory action was filed in Delaware (“California State Action”). The Court found that the Insurers filed their action in Delaware first—by two months. Besides, there were no practical considerations favoring the California State Action; even the argument that this action was more “comprehensive” (because it included breach of contract and bad faith claims against the Insurers) failed because the Court boiled both actions down to the core issue of the Insurers’ duty to defend. The Court also found that it was well-equipped to apply California law in the coverage action and there was nothing novel that would require favoring the California courts.
Meta also presented the argument that the coverage action should be dismissed because: 1) the Insurers conceded a potential for coverage by reserving rights and defending certain claims, thus admitting a duty to defend; and 2) certain negligence-based causes triggered a potential for coverage that led to the duty to defend. The Court rejected both arguments, finding that a reservation of rights does not concede coverage defenses or admit a duty to defend and, second, that the factual allegations of “strictly deliberate” and intentional design must be considered over the legal labels of negligence in determining the duty to defend. Meta’s motion to dismiss or stay was denied.
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Insurers’ motions
Notably, even though the Insurers raised several coverage defenses, the Court determined it could resolve the duty to defend on only one issue: whether the underlying lawsuits alleged harm caused by an “accident”. The Court answered with a resounding, and repeated, “no.”
Quote from the Bench:"A defense under a reservation of rights is not a concession that there is a basis for a duty to defend."
If you’ll recall, the insurance policies provided that the duty to defend was triggered by lawsuits seeking damages for “bodily injury” caused by “an occurrence”. California law and the parties agreed that “occurrence” was synonymous with an “accident” or an “unexpected, unforeseen or undesigned happening or consequence from either a known or unknown cause”— but “occurrence” is contrary to a “deliberate act”. Thus, the Court used a two-part inquiry to determine whether the Social Media Litigation complaints allege “anything other than strictly deliberate conduct”; and if not, whether they allege “additional, unexpected, independent and unforeseen happening” that may have produced the damage.
These inquiries boiled down to whether the negligence allegations sufficiently assert an accident to trigger a duty to defend. Insurers argued that even the negligence-labeled allegations were rooted in deliberate and intentional design conduct and thus, insufficient to amount to an “occurrence” to trigger a duty to defend. Contrarily, Meta argued that there were sufficient allegations of negligence and unintended design consequences to establish a possibility of coverage, so a duty to defend is triggered. The chasm between the Insurers’ and Meta’s positions stemmed from the parties’ view of “intent”; Insurers argue that the complaints allege deliberate conduct by Meta that foreseeably caused harm (sufficient to negate an “accident” even absent intent to injure), while Meta maintains that its product design decisions were accidental occurrences under the policy because it did not intend the alleged harms of addiction or depression.
The Court agreed with the Insurers, finding that the allegations were only of deliberate and intended design, and there was no accidental conduct alleged even if, as Meta argued, the ultimate harm was an unintended consequence of the design. The Court stated that the term “accident” refers to the “nature of the act giving rise to the liability, not to the insured’s intent to cause harm.” Moreover, the Court found that even conduct or outcomes that were legally labeled or framed as negligence were acts of factually intentional conduct in designing and deploying the platforms.
Quote from the Bench:"Because Meta’s platform design choices—as alleged—were voluntary business decisions aimed at increasing engagement, they fall squarely within this broad definition of deliberate conduct."
Meta had further argued that the harms were unforeseeable, thus amounting to accidental conduct. Here, the Court went so far as to liken Meta’s conduct to a “kick in the groin” case and found that, just as one might foresee that a deliberate kick in the groin would result in testicular damage, Meta’s deliberate design of youth-oriented platforms that engage users through algorithmic consumption foreseeably resulted in children becoming addicted or suffering alleged harm. Even while acknowledging that the platforms are fueled by third-party content, the Court found that the allegations of deliberate design allowing for the consumption of such content doesn’t result in mere fortuity in leading to the harm alleged. The only allegations, according to the Court, are those of deliberate conduct with foreseeable results; no accidental or unforeseeable happening was alleged in the Social Media Litigation.
Finally, the Court found that speculating that the complaints could be amended to assert the possibility of coverage was insufficient to defeat summary judgment. The Motion for Partial Summary Judgment was granted in favor of the Insurers, and the Insurers were found to have “no duty to defend Meta in the Social Media Litigation because no allegations—whether express, inferable or extrinsic—support a conclusion that Meta’s conduct was accidental.”
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What’s next?
The ruling in the coverage action was determined before the KGM Lawsuit and was limited to the duty to defend and not to the duty to indemnify. Meta then filed a Motion for Reargument, arguing that the Superior Court of Delaware incorrectly concluded that Meta conceded its sole intent was to increase child engagement. Meta further asserted that new evidence (including testimony and jury instructions from the KGM Lawsuit) makes it clear that Meta disputes it intended to increase child engagement and that Meta now faces negligent design allegations.
The Insurers argued in response that the Court had correctly characterized Meta’s position in designing the platform for engagement and that Meta’s purported “new evidence” is neither “new” nor worthy of prompting a reargument of the issues. In the first week of April, Meta filed a Request for Judicial Notice in Support of Notice of Supplemental Authority, thereby filing with the Superior Court of Delaware the verdict from the KGM Lawsuit, arguably to support that it faced negligence allegations, as the first question on the jury verdict form looked like this:
The Court denied Meta’s Motion for Reargument, finding that the KGM verdict does not invalidate its prior opinion. Significantly, the Court did find that final entry of judgment is appropriate, prompting Meta to appeal the Court’s coverage ruling. The parties are still in the trenches on coverage issues—and there is certainly more to come. While there is still potential argument to come on the duty to defend, the KGM Lawsuit verdict should make ripe the duty to indemnify, at least in that case.
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Observations and takeaways
- In the wake of Plaintiffs’ success in the KGM Lawsuit, insurers should anticipate a proliferation of similarly structured claims against technology companies, alleging bodily injury arising from deliberate product design. These cases represent an evolution of traditional products liability theories into the digital space. Insurers must reassess the intended scope of coverage for such risks and respond accordingly through precise underwriting, including the implementation of targeted exclusions and rate adjustments where appropriate.
- Plaintiffs’ counsel will continue to refine pleading strategies to trigger coverage in deliberate design cases. The Superior Court of Delaware signaled a narrow but meaningful pathway by recognizing that design “mistakes” could, in certain circumstances, sound in negligence. Going forward, corporate defendants are unlikely to emphasize what specifically was intended in its design choices, while plaintiffs will increasingly frame allegations around purported errors in design. If insurers intend to exclude coverage for injuries arising out of software or product design, particularly in the context of mental or bodily injury, such exclusions must be stated expressly and unambiguously in the policy language.
- Venue selection is a critical strategic consideration. Insurers should act promptly in evaluating whether to initiate declaratory judgment actions and, importantly, where to file them. The decision suggests that the first-filed coverage action may receive substantial deference. Given the concentration of corporate entities incorporated in Delaware and the Superior Court of Delaware’s reasoned opinion on the duty to defend, insurers should thoughtfully consider that forum when pursuing coverage litigation.
- Here, the Court found no “accident” even in the absence of allegations that Meta intended the consequences of its alleged intentional acts. Jurisdictions vary in their approach to the intent analysis: some hold that intentional conduct alone—regardless of intent to cause harm—is sufficient to defeat “accident” coverage, while others focus on whether the insured intended the specific injury when evaluating the duty to defend. More precise policy language defining “accident” or intent could be explored to narrow this divide and provide greater coverage certainty.
- The assumption that coverage actions will be stayed pending resolution of the underlying litigation is no longer accurate. The Delaware Court’s reasoning underscores a willingness to adjudicate duty-to-defend issues at an early stage, even recognizing an inherent prejudice to insurers forced to fund a defense that may not be owed. Insurers should take a more proactive approach and pursue early resolution of defense obligations through declaratory relief.
- Courts (at least in Delaware) have demonstrated a willingness to look beyond conclusory labels such as “negligence” and instead scrutinize the factual allegations underpinning the complaint. In other jurisdictions that adopt a similar approach, the traditionally broad duty to defend may narrow in cases involving allegations of deliberate and intentional product design, even absent explicit intent to cause harm.
- Notwithstanding the insurer-favorable aspects of the ruling, the KGM Lawsuit should not be interpreted as a categorical bar to the duty to defend in cases involving mixed allegations of intentional conduct and negligence. The decision suggests that the corporate nature of the insured may have implicitly influenced the analysis. The Court’s reasoning repeatedly referenced cases involving large corporate actors in industries such as pharmaceuticals, firearms and opioids. It remains an open question whether courts will apply the same analytical rigor where the insured is a smaller or less sophisticated technology company.
- An unusual dynamic in the coverage action was the insured’s allegation that plaintiffs and insurers were aligned in their positions. While atypical, this perceived alignment may have indirectly benefited Insurers in the coverage dispute, highlighting the importance of strategic posture in multifront litigation.
- The Court reaffirmed that an insurer’s reservation of rights does not, standing alone, give rise to or evidence a duty to defend. Insurers can continue to issue reservations confidently without concern that doing so will be construed as conceding the duty to defend on the possibility of coverage.
