Commitments and Contingencies Legal Proceedings Between May 5, 2015 and June 16, 2015, three class action lawsuits were filed by shareholders in the U.S. District Court, for the District of Massachusetts, against the Company and certain individual current and former executives of the Company. Two suits subsequently were voluntarily dismissed. Arkansas Teacher Retirement System v. Insulet, et al., 1:15-cv-12345, (ATRS) alleged that the Company (and certain executives) committed violations of Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934 by making allegedly false and misleading statements about the Companys business, operations, and prospects. On February 8, 2018, the parties executed a binding stipulation of settlement, under which all claims were released and a payment was made to the plaintiffs and the class they purport to represent. On August 6, 2018, the Court issued an order finally approving the settlement. The Company had previously accrued fees and expenses in connection with this matter for the amount of the final settlement liability that was not covered by insurance, which amount was not material to the Company's consolidated financial statements. In addition, on April 26, 2017, a derivative action (Walker v. DeSisto, et al., 1:17-cv-10738) (Walker) was filed, and on October 13, 2017, a second derivative action (Carnazza v. DeSisto, et al., 1:17-cv-11977) (Carnazza) was filed, both on behalf of the Company, each by a shareholder in the U.S. District Court for the District of Massachusetts against the Company (as a nominal defendant) and certain individual current and former officers and directors of the Company. The allegations in the actions are substantially similar to those alleged in the securities class action. The actions seek, among other things, damages, disgorgement of certain types of compensation or profits, and attorneys fees and costs. On July 11, 2018, the parties executed a binding stipulation of settlement, under which all claims were released and a payment of attorneys fees and reimbursement of expenses will be paid to plaintiffs counsel, subject to the Courts approval. On July 13, 2018, the plaintiffs filed a motion for preliminary approval of the settlement, which is pending. The Company expects that such fees and expenses payable to plaintiff's counsel will be covered by the Company's insurance. The Company is, from time to time, involved in the normal course of business in various legal proceedings, including intellectual property, contract, employment and product liability suits. Although the Company is unable to quantify the exact financial impact of any of these matters, the Company believes that none of these currently pending matters will have an outcome material to its financial condition or business. Fees To Former European Distributor Following the expiration of its distribution agreement on June 30, 2018, the Company is required to pay to its former European Distributor a quarterly per unit fee for sales of its Omnipod device to identified customers (as that term is defined in the distribution agreement) of the former European Distributor over the twelve months following the expiration of the distribution agreement. The Company is recognizing a liability and an associated intangible asset for this fee as qualifying sales of the Omnipod device are made to these identified customers during the twelve-month period between July 1, 2018 and June 30, 2019. T he actual total fee could vary significantly depending on the number of customers who qualify as eligible to be considered for purposes of calculating the fee under the terms of the distribution agreement, which is under dispute between the parties, and the number of Omnipod devices sold to those customers over the twelve month period. The Company estimates that the total fee could be in the range of approximately $10 million to $55 million over the twelve month period. The Company has accrued approximately $2 million for fees related to Omnipod devices sold to qualifying customers for the three months ended September 30, 2018. Operating Leases The Company leases approximately 100,000 square feet of laboratory and office space for its corporate headquarters in Billerica, Massachusetts. The lease expires in November 2022 and contains escalating payments over the its life. Additionally, the Company leases approximately 29,000 square feet of warehousing space in Billerica, Massachusetts under a lease expiring in September 2019. The Company also leases international and U.S. facilities under leases expiring from October 2018 to June 2021. Rental expense under operating leases was $0.9 million and $2.6 million for the three and nine months ended September 30, 2018, respectively. There have been no material changes to the Company's lease obligation in the nine months ended September 30, 2018.