PRESENT: All the Justices

NATIONWIDE MUTUAL FIRE

INSURANCE COMPANY, ET AL.

 OPINION BY

v. Record No. 160805 JUSTICE CLEO E. POWELL

 April 13, 2017 

ERIE INSURANCE EXCHANGE, ET AL.

FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY

Carroll A. Weimer, Judge 

 In this declaratory judgment action, Nationwide Mutual Fire Insurance Company and 

Nationwide Mutual Insurance Company (collectively “Nationwide”) requested that the Circuit 

Court for Prince William County (“trial court”) determine the priority of five separate insurance 

policies provided by Nationwide and Erie Insurance Exchange (“Erie”). The trial court 

concluded that the order of priorities and coverages were: (1) Nationwide Business Auto Policy, 

$1,000,000; (2) Nationwide Commercial General Liability Policy (“Nationwide CGL Policy”), 

$1,000,000; (3) Nationwide Commercial Umbrella Liability Policy (“Nationwide Umbrella 

Policy”), $1,000,000; (4) Erie Commercial Auto Policy (“Erie Auto Policy”), $1,000,000; (5) 

Erie Business Catastrophe Liability Policy, $5,000,000. Nationwide appeals. 

I. BACKGROUND

 East Coast Insulators, Inc. (“East Coast”) and Rodriguez Construction (“Rodriguez”) 

entered into a subcontract for construction related services.1

 East Coast lent a vehicle to 

Rodriguez for the performance of work pursuant to their subcontract. Moises Rodriguez Manzur 

(“Manzur”) drove East Coast’s vehicle in the course of his employment with Rodriguez. On 

 1

 East Coast and Rodriguez are not parties to this case. 
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October 4, 2013, he struck a vehicle operated by Martin Klaiber, who later died as a result of the 

collision. Stephanie Klaiber, the Personal Representative of the Estate of Martin Klaiber (“the 

Estate”), filed a wrongful death suit against Manzur and East Coast in the Circuit Court of 

Loudoun County on December 10, 2013 (the “Tort Action”). East Coast was later nonsuited 

from the Tort Action on July 24, 2014.2

East Coast was insured under an Erie Commercial Auto Policy (“Erie Auto Policy”). 

Erie also provided East Coast with a Business Catastrophe Liability Policy containing a 

Commercial Liability Umbrella Coverage Form (collectively “Erie Umbrella Policy”). East 

Coast’s subcontract with Rodriguez contained an insurance provision requiring Rodriguez to 

obtain primary insurance to cover bodily injury caused by accident. Rodriguez purchased 

insurance policies from Nationwide, including (1) Nationwide Business Auto Policy 

(“Nationwide Auto Policy”); (2) Nationwide Commercial General Liability Policy (“Nationwide 

CGL Policy”); and (3) Nationwide Commercial Umbrella Liability Policy (“Nationwide 

Umbrella Policy”). The subcontract also contained an indemnification provision that obligated 

Rodriguez to indemnify East Coast against any injuries that arose from work performed under 

the subcontract. 

 On August 11, 2014, Erie and Manzur filed the present lawsuit against Nationwide and 

the Estate seeking a declaration of the priority of liability coverage between the Erie and 

Nationwide policies. Nationwide thereafter filed a counterclaim and cross-claim for declaratory 

judgment against Erie, Manzur, and the Estate. Nationwide requested that the trial court find that 

 2

 Counsel for Erie conceded during oral argument before the Court that the trial court in 

the declaratory judgment action was never made aware that East Coast was nonsuited from the 

Tort Action. 
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Erie’s policies provided primary liability coverage. Erie argued that the indemnification 

agreement required Nationwide’s policies to provide primary liability coverage. 

 Following a bench trial, the trial court ruled in favor of Erie, holding that the 

indemnification provision in the subcontract between East Coast and Rodriguez controlled and

“establishe[d] East Coast Insulators’ right to indemnification from Rodriguez Construction 

through its insurer Nationwide.” The trial court went on to state that the indemnification 

provision: 

is nothing more than a contract between the parties to predetermine 

the allocation of potential risk of loss and Virginia law favors such 

contracts between competent parties for a valid purpose as set forth 

in Farmers Insurance Exchange v[.] Enterprise Leasing Co[.], 281 

Va. 612, [708 S.E.2d 852 (2011)] at page 619 . . . , which states, 

the general rule is that an indemnity agreement between the 

insurers or a contract with an indemnification clause may shift an 

entire loss to a particular insurer, notwithstanding the existence of 

another insurance clause in its policy.

Applying the indemnification provision in the subcontract, the trial court then determined the 

priority of coverage as: (1) Nationwide Auto Policy, (2) Nationwide CGL Policy; (3) 

Nationwide Umbrella Policy; (4) Erie Auto Policy; and (5) Erie Umbrella Policy. 

 This appeal followed. 

II. ANALYSIS

A. Standard of Review 

“Courts interpret insurance policies, like other contracts, in accordance with the parties’ 

intentions as determined from the words they have used in their contract. The interpretation of 

policy provisions presents a question of law that we consider de novo.” Lower Chesapeake 

Assoc. v. Valley Forge Ins. Co., 260 Va. 77, 87-88, 532 S.E.2d 325, 331 (2000) (citations 

omitted).
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B. Nationwide’s CGL Policy

Nationwide argues on appeal that the trial court erred in determining that the Nationwide 

CGL Policy provides liability coverage, notwithstanding the exclusion in that policy for claims 

arising out of the use of automobiles. We agree.

“When an insurer drafts policy language setting forth exclusions that limit coverage 

under a policy, the insurer is required to use language that clearly and unambiguously defines the 

scope of the exclusions.” Id. at 88, 532 S.E.2d at 331. Here, Nationwide’s CGL Policy contains 

a clear exclusion for bodily injury and property damage liability under subsection (2)(g): 

2. Exclusions: This insurance does not apply to: 

. . . . 

g. Aircraft, Auto or Watercraft

“Bodily injury” or “property damage” arising out of the ownership, 

maintenance, use or entrustment to others of any aircraft, “auto” or 

watercraft owned or operated by or rented or loaned to any insured. 

Use includes operation and “loading or unloading.” 

Thus, the Nationwide CGL Policy excludes coverage for injury and property damage liability 

arising from Manzur’s use of an auto. 

The policy goes on to describe several exceptions to the exclusions, none of which 

concern autos. The most closely relevant exception concerns: “(4) Liability assumed under any 

‘insured contract’ for the ownership, maintenance or use of aircraft or watercraft.” However, 

this exception to the Aircraft, Auto or Watercraft exclusion does not mention any exception to 

the exclusion regarding the use of an auto. Therefore, Nationwide’s CGL Policy would not 

apply to provide coverage for bodily injuries arising out of Manzur’s auto accident. 

 Thus, by its plain language, the Nationwide CGL policy excludes from coverage any

bodily injury arising out of the use of an auto. See McQuirter v. Rotolo, 77 So. 3d 76, 82 (La. 

App. 2011) (“The automobile exclusion is unambiguous and operates to broadly bar coverage for 
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bodily injury or property damage ‘arising out of the use of an[] auto.’”) (alterations and some 

internal quotation marks omitted). The trial court erred in its priority analysis by finding 

Nationwide’s CGL Policy provided coverage immediately after Nationwide’s Auto Policy. 

Indeed, the Nationwide CGL Policy did not apply at all to provide coverage. Accordingly, we 

reverse the trial court’s determination that the Nationwide CGL Policy ranked second in the 

priority list of insurance coverages. 

C. Subcontract’s Indemnification Clause 

Nationwide argues that the trial court erred in determining its three policies provided 

primary coverage for the wrongful death of Martin Klaiber. According to Nationwide, because 

the underlying tort action did not include a claim against East Coast, the indemnification 

provision in the subcontract is irrelevant making Nationwide’s coverage secondary to Erie’s 

Auto Policy and its Umbrella Policy. Relying on St. Paul Fire & Marine Insurance Co. v. 

American International Specialty Lines Insurance Co., 365 F.3d 263 (4th Cir. 2004) (concluding 

that an indemnification provision may shift an entire loss to a particular insurer), as did the trial 

court, Erie argues that the indemnification provision in the subcontract shifted the entire loss to 

Nationwide obligating it to be the primary insurer. While we agree with the rationale in St. Paul 

Fire & Marine, that an indemnification agreement may shift the loss from one insurer to another, 

under the facts of this case it simply is not applicable. 

Here, the indemnification provision required Rodriguez to indemnify East Coast against 

any injuries which arose from work performed under the subcontract. Section 10 of the 

subcontract states:

INDEMNIFICATION. To the fullest extent permitted by law, 

Subcontractor hereby agrees to indemnify, hold harmless, and 

defend (at Subcontractor’s sole expense) Contractor, the Owner, 

affiliated companies of Contractor, their partners, joint ventures, 
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representatives, etc. . . . (“Indemnified parties”), from and against 

any and all claims for bodily injury, death, damage to property, 

losses, theft, damages, actions, causes of action, suits, losses, 

judgments, obligations and any liabilities, costs and expenses 

. . . (“Claims”) which arise or are in any way connected with the 

Work performed, materials furnished, or services provided under 

this Agreement by Subcontractor, and/or its employees, agents, 

sub-subcontractors and/or suppliers. 

 The trial court found that “the indemnification provision in this case is enforceable and 

establishes East Coast[’s] [] right to indemnification from Rodriguez [] through its insurer, 

Nationwide.” If the facts presented here raised an issue as to providing coverage for East Coast, 

the trial court might be correct. However, coverage for East Coast is not and never has been at 

issue in this declaratory judgment action. East Coast was nonsuited as a party in the underlying 

Tort Action. Rather, the issue is who is obligated to cover Manzur for his actions during the 

course of his employment with Rodriguez. Manzur, not East Coast, was a party to the Tort 

Action and is a party to the declaratory judgment action now before us. Thus, the 

indemnification provision between East Coast and Rodriguez is irrelevant to this case. 

 In an opinion that we find persuasive, the United States Court of Appeals for the Fourth 

Circuit found that an indemnification agreement was irrelevant where coverage for the party to 

be indemnified was not at issue. Travelers Prop. Cas. Co. of Am. v. Liberty Mut. Ins. Co., 444 

F.3d 217 (4th Cir. 2006). In Travelers, the Fourth Circuit found that 

[t]he principles of St. Paul [Fire & Marine], however, are not 

relevant to the case before us. The issue here is coverage for only

Ryland’s liability. . . . This is not a case where we are determining 

State Street’s liability vis-à-vis Ryland’s. The fact that Ryland 

agreed to indemnify State Street under the Pooling Agreement 

does not absolve Liberty Mutual of its independent contractual 

obligation to insure Ryland as State Street’s ‘real estate manager.’ 

If the issue in this case turned on the underlying liability as 

between Ryland and State Street, we would likely conclude, as 

Liberty Mutual urges, that Ryland bore full responsibility because 

of its indemnification agreement.
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Id. at 224-25. Likewise, the issue here is coverage only for Manzur’s liability as an employee of 

Rodriguez while driving a car owned by East Coast. The fact that Rodriguez agreed to 

indemnify East Coast for claims arising from work performed under the subcontract does not 

absolve Erie of its contractual obligation to insure any vehicles owned by East Coast. The Erie 

Auto Policy issued to East Coast expressly provides coverage for any “auto” owned by East 

Coast.

Erie relies on Clarendon National Insurance Co. v. United Fire & Casualty Co., 571 F.3d 

749, 753 (8th Cir. 2009), for the proposition that if language in an indemnification clause is 

broad, as they assert the indemnification agreement is here, “the priorities of the insurance would 

be determined by the presence of the language even if the direct beneficiary of the duty to 

indemnify was not a party to the tort lawsuit.” Clarendon, however, is inapposite. Notably, the 

indemnity language in Clarendon required one party to assume “‘any and all liability for 

injury . . . caused by the operation, use, control, handling, or transportation of the [truck].’” Id.

at 753. The Clarendon court construed that language broadly to apply regardless of whether the 

claim was against the owner of the vehicle. In contrast, the indemnification agreement in the 

present case only required Rodriguez to indemnify East Coast from any claims against East 

Coast. As we previously stated, there are no claims against East Coast. Therefore, Rodriguez is 

not required to indemnify East Coast. 

Accordingly, the trial court erred in finding the indemnification agreement applied to 

require all three of Nationwide’s policies to provide primary insurance coverage ahead of Erie’s 

two policies. 
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D. Order of Priorities

Having determined that the trial court erred in finding the Nationwide CGL Policy and

the indemnification agreement applied, we now turn to the issue of establishing the proper order 

of priority of insurance coverage.

1. Erie Auto Policy

 East Coast insured its company and vehicles with Erie. The Erie Auto Policy provides 

coverage for “[a]nyone else while using with your permission a covered ‘auto’ you own, hire or 

borrow.” “For any covered ‘auto’ you own, this Coverage Form provides primary insurance.” 

The vehicle Manzur was driving was owned by East Coast and constituted a “covered auto,” 

therefore, the Erie Auto Policy provides primary coverage up to its coverage limit of $1,000,000. 

2. Nationwide Auto Policy 

 Rodriguez insured its company and employees with Nationwide. The Nationwide Auto 

Policy provides coverage for “[a]nyone else while using with your permission a covered ‘auto’ 

you own, hire or borrow.” “For any covered ‘auto’ you don’t own, the insurance provided by 

this Coverage Form is excess over any other collectible insurance.” Manzur, an employee of 

Rodriguez, was driving a “covered auto” that Rodriguez did not own, therefore, the Nationwide 

Auto Policy provides excess coverage, up to $1,000,000, after the Erie Auto Policy is exhausted.

3. Umbrella Insurance Policies

The remaining insurance policies are the Nationwide Umbrella Policy, providing 

coverage up to $1,000,000, and the Erie Umbrella Policy, providing coverage up to $5,000,000. 

In determining coverage priorities between two escape or excess policies, normal principles of 

contract interpretation apply. GEICO v. Universal Underwriters Ins. Co., 232 Va. 326, 330, 350 

S.E.2d 612, 615 (1986). When “‘other insurance’ clauses of two policies are of identical effect 
9

in that they operate mutually to reduce or eliminate the amount of collectible insurance available, 

neither provides primary coverage and . . . ‘pro rata distribution [is] appropriate.’” Aetna Cas. & 

Sur. Co. v. National Union Fire Ins. Co., 233 Va. 49, 54, 353 S.E.2d 894, 897 (1987) (quoting 

State Capital Ins. v. Mutual Assurance Soc’y., 218 Va. 815, 820, 241 S.E.2d 759, 762 (1978)). 

The Nationwide Umbrella Policy’s “other insurance” provision provides that: 

[i]f ‘other insurance’ applies to claims covered by this policy, the 

insurance under this policy is excess and we will not make any 

payments until the ‘other insurance’ has been exhausted by 

payment of claims.

“Other insurance” is defined in Nationwide’s Umbrella Policy as “a policy of insurance 

affording coverage that this policy also affords. ‘Other insurance’ includes any type of selfinsurance or other mechanism by which an ‘insured’ arranges for funding of legal liabilities.” 

The “other insurance” provision in Erie’s Umbrella Policy states: 

[t]his insurance is excess over, and shall not contribute with any of 

the other insurance, whether primary, excess, contingent or on any 

other basis. 

Each “excess insurance” clause either “expressly negates contribution with other carriers, 

or otherwise manifests that it is intended to be excess over the other excess policies.” State Farm 

Fire & Cas. Co. v. LiMauro, 482 N.E. 2d 13, 18 (N.Y. 1985) (citations omitted). See AIG 

Premier Ins. Co. v. RLI Ins. Co., 812 F. Supp. 2d 1315, 1323 (M.D. Fla. 2011) (same). 

Specifically, Erie’s policy provides that it “is excess over, and shall not contribute with any of 

the other insurance.” It then delineates various types of insurance, i.e., “primary, excess, 

contingent or on any other basis.” Reduced to its essence, the endorsement negates contribution. 

To the same extent, but in a more direct fashion, Nationwide’s excess policy provides 

“the insurance under this policy is excess and we will not make any payments until the ‘other 

insurance’ has been exhausted by payment of claims.” (Emphasis added). Under the terms of 
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Nationwide’s policy, “other insurance” includes “any” type of self-insurance or “other 

mechanism” by which an insured arranges for funding of liabilities. “‘The word ‘any,’ like other 

unrestrictive modifiers[,] is generally considered to apply without limitation.’” Shevlin Smith v. 

McLaughlin, 289 Va. 241, 264, 769 S.E.2d 7, 19 (2015) (quoting Sussex Cmty. Servs. Ass’n v. 

Virginia Soc’y for Mentally Retarded Children, Inc., 251 Va. 240, 243, 467 S.E.2d 468, 469 

(1996)). The words “other mechanism” can be construed to include primary, excess, contingent, 

or any other insurance. 

 In this instance, we join the New York Court of Appeals in “reject[ing] as an exercise in 

‘meaningless semantics’ the effort to determine which among policies covering the risk which 

occurred is the more specific.” LiMauro, 482 N.E.2d at 16. We adopt the reasoning of AIG 

Premier which found “[t]he phrase ‘whether primary, excess or contingent’ does not add 

anything to the all[-]inclusive ‘other valid’ phrase” in the umbrella policies. 812 F. Supp. 2d at 

1324 (quoting LiMauro, 482 N.E.2d at 19). We find that the use of “any” as found in Erie’s

provision referring to “any of the other insurance,” as well as Nationwide’s “other insurance” 

definition of “any type of self-insurance or other mechanism,” function as all-inclusive terms. 

“The super-escape phraseology may be more specific, but its listing of other coverage still falls 

within the ambit of the very broad phrase[s]” “any of the other insurance” or “any type of selfinsurance.” Id. Accordingly, we conclude that the provisions are virtually identical in effect, 

and that they are irreconcilable and mutually repugnant. In this situation, therefore, pro rata 

distribution is appropriate. Aetna, 233 Va. at 54, 353 S.E.2d at 897. The order of priorities for 

the applicable insurance policies in this case is: (1) Erie Auto Policy; (2) Nationwide Auto 

Policy; (3) Nationwide Umbrella Policy and Erie Umbrella Policy, pro rata. 
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III. CONCLUSION

For the foregoing reasons we find that the trial court erred in ruling that the 

indemnification provision in the subcontract applied in this case; that the Nationwide CGL 

Policy provided secondary coverage in this case; and hold that the order of priorities in this case 

is: (1) Erie Auto Policy; (2) Nationwide Auto Policy; (3) Nationwide Umbrella Policy and Erie 

Umbrella Policy, pro rata. 

Reversed and final judgment.