IN THE SUPREME COURT OF NORTH CAROLINA

2022-NCSC-134

No. 20PA21

Filed 16 December 2022

RADIATOR SPECIALITY COMPANY

v.

ARROWOOD INDEMNITY COMPANY (as successor to GUARANTY NATIONAL 

INSURANCE COMPANY, ROYAL INDEMNITY COMPANY, and ROYAL 

INDEMNITY COMPANY OF AMERICA); COLUMBIA CASUALTY COMPANY; 

CONTINENTAL CASUALTY COMPANY; FIREMAN’S FUND INSURANCE 

COMPANY; INSURANCE COMPANY OF NORTH AMERICA; LANDMARK 

AMERICAN INSURANCE COMPANY; MUNICH REINSURANCE AMERICA, 

INC. (as successor to AMERICAN REINSURANCE COMPANY); MUTUAL FIRE, 

MARINE AND INLAND INSURANCE COMPANY; NATIONAL UNION FIRE 

INSURANCE COMPANY OF PITTSBURGH, PA; PACIFIC EMPLOYERS 

INSURANCE COMPANY; ST. PAUL SURPLUS LINES INSURANCE COMPANY; 

SIRIUS AMERICA INSURANCE COMPANY (as successor to IMPERIAL 

CASUALTY AND INDEMNITY COMPANY); UNITED NATIONAL INSURANCE 

COMPANY; WESTCHESTER FIRE INSURANCE COMPANY; ZURICH 

AMERICAN INSURANCE COMPANY OF ILLINOIS

On discretionary view pursuant to N.C.G.S. § 7A-31 of a unanimous, 

unpublished decision of the Court of Appeals, No. COA19-507, 2020 WL 7039144 

(N.C. Ct. App. Dec. 1, 2020), reversing in part and affirming in part a judgment 

entered on 27 February 2019 by Judge W. David Lee in Superior Court, Mecklenburg 

County. On 10 August 2021, the Supreme Court allowed defendant Fireman’s Fund 

Insurance Company’s cross-petition for discretionary review and Landmark 

American Insurance Company and National Union Fire Insurance Company of 

Pittsburgh, PA’s conditional petition for discretionary review. Heard in the Supreme 

Court on 30 August 2022. 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

McGuireWoods LLP, by Bradley R. Kutrow; and Perkins Coie LLP, by, 

Jonathan G. Hardin and Catherine J. Del Prete, for plaintiff-appellant.

Fox Rothschild LLP, by Matthew Nis Leerberg and Troy D. Shelton; and 

Rivkin Radler LLP, by Michael A. Kotula, for defendant-appellant Fireman’s 

Fund Insurance Company.

Goldberg Segalla LLP, by David L. Brown and Allegra A. Sinclair; and 

Nicolaides Fink Thorpe Michaelides Sullivan LLP, by Matthew J. Fink, pro 

hac vice, and Mark J. Sobczak, pro hac vice, for defendant-appellee National 

Union Fire Insurance Company of Pittsburgh, PA.

Hedrick Gardner Kincheloe & Garofalo, LLP, by M. Duane Jones and Paul C. 

Lawrence; and Musick, Peeler & Garrett LLP, by David A. Tartaglio, Stephen 

M. Green, and Steven T. Adams, for defendant-appellee Landmark American 

Insurance Company.

Robinson, Bradshaw & Hinson, P.A., by R. Steven DeGeorge, for United 

Policyholders, amicus curiae.

Cranfill Sumner LLP, by Jennifer A. Welch; and Crowell & Moring, by Laura 

Foggan for Complex Insurance Claims Litigation Association and American 

Property Casualty Insurance Association, amici curiae.

EARLS, Justice.

¶ 1 Radiator Specialty Company (RSC) is a North Carolina-based manufacturer of 

automotive, hardware, and plumbing products, including cleaners, degreasers, and 

lubricants. Some of the products RSC has manufactured contained benzene. Over the 

past twenty years, RSC has been named in hundreds of personal injury lawsuits 

seeking damages for bodily injury allegedly caused by repeated exposure to benzene

over time. During that same period, RSC purchased more than one-hundred
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

standard-form product liability policies from twenty-five insurers, including the three 

insurers remaining in this action: Fireman’s Fund Insurance Company (Fireman’s 

Fund), Landmark American Insurance Company (Landmark), and National Union

Fire Insurance Company of Pittsburgh, PA (National Union) [collectively, the 

insurers]. RSC now seeks compensation from those insurers for liabilities it has 

incurred as a result of its benzene litigation.

¶ 2 This case presents a challenge that is unique from personal injury cases in 

which the injury occurs at a definite time and place. Unlike a car crash, for example, 

where the injury takes place on a clearly discernable date, benzene exposure may 

take place over the course of several years, spanning multiple insurance-policy 

periods and implicating different providers. More complicated still, the consequences 

of that exposure may not become apparent for even longer. As a result, as the courts 

of New York have stated,

[c]ourts across the country have grappled with so-called 

“long-tail” claims—such as those seeking to recover for 

personal injuries due to toxic exposure and property 

damage resulting from gradual or continuing 

environmental contaminations—in the insurance context. 

These types of claims present unique complications 

because they often involve exposure to an injury-inducing 

harm over the course of multiple policy periods, spawning 

litigation over which policies are triggered in the first 

instance, how liability should be allocated among triggered 

policies and the respective insurers, and at what point 

insureds may turn to excess insurance for coverage.

In re Viking Pump, Inc., 27 N.Y.3d 244, 255 (2016). 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

¶ 3 This dispute concerns which insurers are obligated to pay which costs arising 

from RSC’s benzene liabilities pursuant to the terms of the insurers’ liability 

insurance policies. To answer this question, we must decide as a matter of law (1) 

when each insurer’s coverage is triggered in these circumstances—that is, whether 

coverage is triggered when a claimant is exposed to benzene, or instead, when the 

claimant develops observable bodily injury, such as sickness or disease (exposure vs. 

injury-in-fact); (2) how defense and indemnification costs are allocated among 

insurers when multiple policies in multiple years are triggered by the same claim (all 

sums vs. pro rata); and (3) what underlying limits RSC must exhaust before seeking 

defense coverage from umbrella or excess policies (vertical vs. horizontal exhaustion). 

I. Background

A. Factual Background

¶ 4 For over forty years, RSC produced and sold benzene-containing products, 

including a penetrating oil called Liquid Wrench. In the early 2000s, RSC became the 

subject of hundreds of personal injury lawsuits arising from its use of benzene in its 

products. Claimants sought damages for consequences they have suffered as a result 

of benzene exposure, including cancer and death. Their claims represent what are 

known as long-tail claims: allegations of injury spanning over the course of years. In 

other words, many of the claimants assert that they were exposed to RSC’s benzenecontaining products for years or decades, eventually developing progressive diseases. 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

As a result of this litigation, RSC has faced approximately $45 million in defense and 

settlement costs. RSC has sought to have some of those costs covered by a multitude 

of insurance policies it purchased over several decades from different providers. 

Fireman’s Fund, Landmark, and National Union are the only such insurers that are 

parties to this appeal. 

¶ 5 From 1971 to 2014, RSC purchased over one-hundred standard-form product 

liability policies from more than a dozen insurers. Most of these policies provided 

coverage for one year. In 2013, RSC brought suit against its insurance providers

seeking coverage for the damages it has paid out of pocket related to its benzene 

litigation. Though RSC argues that the trial court erroneously “awarded [it] only a 

tiny fraction of the insurance for which RSC paid more than $7.1 million in 

premiums,” the insurers reject the notion that RSC has not been awarded the amount 

it is due under the policies they issued, including because “[RSC] settled with certain 

insurers, purchased policies with high per claim self-insured retentions or 

deductibles, lost some policies it bought, or bought no applicable coverage at all.” To 

cover for those “gaps in its insurance program,” the insurers argue that RSC now 

seeks to hold them responsible for liabilities they were never obligated to cover. 

B. Procedural History

¶ 6 On 6 February 2013, RSC filed a declaratory judgment action pursuant to 

N.C.G.S. § 1-253 et seq. seeking a declaration of the duties and obligations of fifteen 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

different defendant-insurers under policies they sold to RSC between 1971 and 2012. 

¶ 7 An amended complaint filed with leave of the trial court on 5 July 2015 named 

nine of the original defendant insurance companies or successors in interest to the 

insurance companies that sold RSC primary and excess liability policies for the same 

period. The amended complaint raised additional claims for bad faith refusal to settle 

or pay and unfair or deceptive trade practices against National Union. Shortly 

thereafter, defendants filed both answers and motions for summary judgment on 

various issues of insurance contract interpretation. 

¶ 8 On 28 and 29 January 2016, Judge W. David Lee issued orders addressing the 

issues raised in the summary judgment motions. In its Order on Trigger of Coverage, 

the trial court determined that “the exposure trigger is appropriate in the context of 

long tail bodily injury claims,” meaning that “[t]he beginning of the triggered policy 

period is the date on which the claimant was first exposed to benzene” and “[t]he end 

of the triggered policy period is the date on which the claimant was last exposed to 

benzene.” 

¶ 9 In its Order Regarding Allocation, the trial court determined that “pro rata 

allocation applies to both defense and indemnity payments based on each insurer’s 

‘time on the risk’ over the RSC coverage block,” rejecting the “all sums” approach and 

making RSC “responsible for its pro rata share of defense and indemnity costs where 

there has been settled, insolvent or lost policies, as well as periods where RSC was 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

uninsured, underinsured or self-insured.” 

¶ 10 In its Order on Landmark’s Motion for Summary Judgment [Order on 

Exhaustion], the trial court determined that vertical exhaustion applies to the duty 

to indemnify under Landmark’s umbrella policy but horizontal exhaustion applies to 

Landmark’s duty to defend.

¶ 11 After issuing the summary judgment orders, the case proceeded to a bench trial

in June 2018 for determination of the date of exposure for any claimants for whom 

the exposure date was disputed. 

¶ 12 After a bench trial, the trial court entered an order of final judgment, 

determining that the insurers were obligated to defend and indemnify RSC under 

their policies “subject to their respective policy limits and the following rulings of this 

[c]ourt,” including the “Order Regarding Allocation.” The court incorporated by 

reference a Sealed Order for Declaratory Relief entered on 22 February 2019 

assigning past defense and indemnity costs to the insurers by applying pro rata 

allocation. As a result, the insurers were required to reimburse $1.8 million of RSC’s 

past costs.

¶ 13 In an unpublished opinion, a unanimous panel of the Court of Appeals affirmed 

the judgment of the trial court and dismissed in part. Radiator Specialty Co. v. 

Arrowood Indem. Co., No. COA19-507, 2020 WL 7039144 (N.C. Ct. App. Dec. 1, 2020). 

¶ 14 First, the Court of Appeals held that the trial court appropriately applied an 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

exposure theory for when coverage was triggered as opposed to an injury-in-fact 

theory. Radiator Specialty Co., 2020 WL 7039144, at *3. According to the court, it 

was undisputed that 

the policies issued by defendants were standard-form 

policies with materially identical language on the issue of 

when coverage triggers. These policies provided that the 

insurer would pay “all sums which the insured shall 

become legally obligated to pay as damages because of 

bodily injury . . . caused by an occurrence[.]” The policies 

generally define “bodily injury” as injury, sickness, or 

disease sustained by a person, and “occurrence” as an 

accident including exposure. 

Id. (alterations in original). The court rejected RSC’s argument that this Court’s 

decision in Gaston County Dyeing Machine Co. v. Northfield Insurance Co., 351 N.C. 

293 (2000), established that an injury-in-fact trigger applied to all standard-form 

policies. Radiator Specialty Co., 2020 WL 7039144, at *3. Instead, the court noted 

that application of an injury-in-fact trigger in Gaston, a case involving property 

damage caused by a ruptured pressure vessel, “was premised upon the notion that a 

court could determine that ‘an injury-in-fact occurs on a date certain and all 

subsequent damages flow from the single event.’ ” Id. (quoting Gaston, 351 N.C. at 

304). By contrast, the court took “judicial notice of the innumerable cases concerning 

asbestos and benzene exposure and recognize[d] how difficult it is to ascribe a ‘date 

certain’ or ‘single event’ to such harm.” Id. Accordingly, the court concluded that 

because “[i]njury resulting from benzene or asbestos exposure is neither discrete nor 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

so certain . . . [r]eading the contract language and interpreting it by its terms, it seems 

clear that a ‘bodily injury’ is something caused by an ‘occurrence,’ which can include 

exposure,” and thus that “the trial court did not err in applying an exposure theory 

of coverage instead of injury-in-fact.” Radiator Specialty Co., 2020 WL 7039144, at *4

(citing Imperial Cas. & Indem. Co. v. Radiator Specialty Co., 862 F. Supp. 1437 

(E.D.N.C. 1994), aff’d, 67 F.3d 534 (4th Cir. 1995)).

¶ 15 Second, the Court of Appeals held that the trial court “erred in applying pro 

rata allocation of liability instead of an ‘all sums’ allocation” in its intermediate Order 

Regarding Allocation but concluded that “this error was rendered moot by the entry 

of the final judgment.” Id. According to the court, 

[t]he policies, by their language, are clear—any claims 

covered by a particular policy must be defended and 

indemnified by the insurer under that policy. By prorating 

plaintiff’s costs and damages based upon “time on the risk,” 

the trial court reallocated those damages, potentially 

imposing more costs on one party, and removing them from 

another, who might be differently obligated. We recognize 

that these policies represent multiple years of coverage, 

but judicial expediency is no excuse. We hold that it was 

indeed error to prorate these costs where the contracts 

explicitly imposed those obligations otherwise.

Id. The court concluded, however, that the trial court’s error was corrected by the 

trial court’s final judgment which “assigned costs—both in terms of defense and 

indemnification—to specific parties based upon their contractual obligations.” 

Radiator Specialty Co., 2020 WL 7039144, at *5. In the court’s view, by entering a 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

judgment requiring each insurer to “defend and indemnify plaintiff on the . . . claims 

. . . ‘subject to its respective policy limits,’ ” the trial court “specifie[d] that the 

allocation is not pro rata, but is instead subject to the contractual limitations 

established in the policies,” which the court interpreted to require all sums allocation. 

Id. Therefore, although the court “recognize[d] the error in the intermediate order,” 

it held that the error “was rendered moot by entry of the final judgment.” Id.

¶ 16 Third, the Court of Appeals held that the trial court did not err in applying 

horizontal exhaustion to Landmark’s duty to defend. Id. According to the court, 

Landmark’s insurance policy “stated that it had the duty to defend suits when (1) the 

applicable limits of underlying insurance were used up in the payment of judgments 

or settlements, or (2) no other valid and collectible insurance was available.” Id.

Because the policy specifically used the phrase “other insurance,” the court agreed 

with Landmark that “this language suggests that the policy was only triggered when 

any other policies held by plaintiff were exhausted.” Id. Therefore, the court held that 

“a proper interpretation of the contract reveals that Landmark offered an excess 

policy, to be available when all other policies were exhausted.” Id.

¶ 17 Finally, the Court of Appeals dismissed as moot RSC’s challenge to the trial 

court’s intermediate order concluding that the defendant-insurers “were not estopped 

from denying coverage of claims” because the trial court in its final judgment held 

that the defendant-insurers “owed both a duty to defend and a duty to indemnify” 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

and dismissed one defendant-insurer’s challenge to a summary judgment motion 

addressing cessation of coverage under its own policy. Radiator Specialty Co., 2020 

WL 7039144, at *5–6.1

¶ 18 On 10 August 2021, this Court allowed RSC’s petition for discretionary review, 

Fireman’s Fund’s cross-petition for discretionary review, and Landmark and

National Union’s conditional petition for discretionary review. 

C. Policies in Dispute

¶ 19 National Union issued six annual policies to RSC that were effective from 27 

November 1987 through 1 May 1992. Five of the policies provide primary liability 

coverage, and the sixth policy provides excess coverage over the primary policy in 

effect from 1 May 1991 through 1 May 1992. The primary policies in effect from 27 

November 1987 to 1 May 1990 state the following:

a. We will pay those sums that the insured becomes 

legally obligated to pay as damages because of “bodily 

injury” . . . included within the “products-completed 

operations hazard” to which this insurance applies. No 

other obligation or liability to pay sums or perform acts or 

services is covered unless explicitly provided for under 

SUPPLEMENTARY PAYMENTS. This insurance applies 

only to bodily injury . . . which occurs during the policy 

period. The “bodily injury” must be caused by an 

“occurrence.” The “occurrence” must take place in the 

“coverage territory”. We will have the right and duty to 

 

1 After the Court of Appeals issued its decision, RSC moved for rehearing on the

determination that the allocation issue had been rendered moot by the trial court’s final 

judgment. The Court of Appeals denied the motion. 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

defend any “suit” seeking those damages . . . .

¶ 20 The primary policies in effect from 1 May 1990 to 1 May 1992 state the 

following:

a. We will pay those sums that the insured becomes 

legally obligated to pay as damages because of “bodily 

injury” . . . to which this insurance applies. We will have 

the right and duty to defend any “suit” seeking those 

damages . . . .

* * *

No other obligation or liability to pay sums or perform acts 

or services is covered unless explicitly provided for under 

SUPPLEMENTARY PAYMENTS. 

b. This insurance applies to “bodily injury” . . . only if: 

(1) The “bodily injury” is caused by an “occurrence” 

that takes place in the “coverage territory,” and 

(2) The “bodily injury” . . . occurs during the policy 

period.

The sixth policy provides excess coverage and incorporates and adopts the terms of 

the primary policy from the period of 1 May 1991 to 1 May 1992. All six policies define 

“bodily injury” as “bodily injury, sickness, or disease sustained by a person, including 

death resulting from any of these at any time.” The policies define the term 

“occurrence” as “an accident, including continuous or repeated exposure to 

substantially the same general harmful conditions.” 

¶ 21 Fireman’s Fund issued three excess liability insurance policies to RSC that 

were effective during three periods of time: from 10 December 1976 to 17 October 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

1977; from 17 October 1977 to 17 October 1978; and from 1 May 1979 to 1 May 1980.

Each excess policy incorporated language from certain underlying policies providing 

primary liability insurance.

Agreement #1:

I. COVERAGE —

Underwriters hereby agree, subject to the 

limitations, terms and conditions hereinafter mentioned, to 

indemnify the Assured for all sums which the Assured 

shall be obligated to pay by reason of liability:

(a) Imposed upon the Assured by law, or

(b) assumed under contract or agreement by the Named 

Assured and/or any officer, director, stockholder, 

partner or employee of the Named Assured, while 

acting in his capacity as such,

for damages on account of —

(i) Personal Injuries

(ii) Property Damage 

. . . .

caused by or arising out of each occurrence happening 

anywhere in the world,

. . . .

THIS POLICY IS SUBJECT TO THE FOLLOWING 

DEFINITIONS:

. . . .

2. PERSONAL INJURIES —
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

The term “Personal Injuries” wherever used herein 

means bodily injury (including death at any time resulting 

therefrom), . . . sickness, disease, disability, . . . .

. . . .

5. OCURRENCE —

The term “Occurrence” wherever used herein shall 

mean an accident or a happening or event or a continuous 

or repeated exposure to conditions which unexpectedly and 

unintentionally results in personal injury, [or] property 

damage . . . during the policy period. All such exposure to 

substantially the same general conditions existing at or 

emanating from one premises location shall be deemed one 

occurrence.

Agreement #2:

INSURING AGREEMENTS:

I. Coverage. To pay on behalf of the insured the ultimate 

net loss in excess of the applicable underlying (or retained) 

limit hereinafter stated, which the insured shall become 

obligated to pay by reason of the liability imposed upon the 

insured by law or assumed by the insured under contract:

(a) PERSONAL INJURY LIABILITY. For damages, 

including damages for care and loss of services, because 

of personal injury, including death at any time resulting 

therefrom, sustained by any person or persons,

(b) PROPERTY DAMAGE LIABILITY. For damages 

because of injury to or destruction of tangible property 

including consequential loss resulting therefrom[.]

. . . caused by an occurrence.

. . . .

IV. Other Definitions. When used in this policy . . . .
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

(a) “Personal Injury” means (1) bodily injury, sickness, 

disease, disability . . . . 

(e) “Occurrence.” With respect to Coverage 1(a) and 1(b) 

occurrence shall mean an accident, including injurious 

exposure to conditions, which results, during the policy 

period, in personal injury or property damage neither 

expected nor intended from the standpoint of the 

insured. . . . 

V. Policy Period, Territory. This policy applies only to 

personal injury, [or] property damage . . . occurrences 

which happen anywhere during the policy period.

Agreement #3:

I. COVERAGE

To indemnify the INSURED for ULTIMATE NET 

LOSS, as defined hereinafter, in excess of RETAINED 

LIMIT, as herein stated, all sums which the INSURED 

shall be obligated to pay by reason of liability imposed upon 

the INSURED by law or liability assumed by the 

INSURED under contract or agreement for damages and 

expenses, because of:

A. PERSONAL INJURY, as hereinafter defined;

B. PROPERTY DAMAGE, as hereinafter defined;

. . . .

to which this policy applies, caused by an OCCURRENCE, 

as hereinafter defined, happening anywhere in the world.

. . . .

DEFINITIONS

. . . .
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

H. OCCURRENCE:

With respect to Coverage 1(A) and 1(B) “OCCURRENCE” 

shall mean an accident or event including continuous 

repeated exposure to conditions, which results, during the 

policy period, in PERSONAL INJURY or PROPERTY 

DAMAGE neither expected nor intended from the 

standpoint of the INSURED. For the purpose of 

determining the limit of the Company’s liability, all 

personal injury and property damage arising out of 

continuous or repeated exposure to substantially the same 

general conditions shall be considered as arising out of one 

OCCURRENCE.

. . . .

I. PERSONAL INJURY:

The term PERSONAL INJURY wherever used herein 

means:

(1) bodily injury, sickness, disease, disability or shock,

including death at any time resulting therefrom . . . . 

which occurs during the policy period.

¶ 22 Finally, Landmark issued umbrella/excess liability policies to RSC, which were 

effective from 8 October 2003 to 1 May 2014. Each policy contains the same 

provisions, including: 

A. Coverage For “Bodily Injury” Liability 

The policies afford coverage for “bodily injury” liability: 

I. INSURING AGREEMENT 

1. We will pay on behalf of the insured those sums 

in excess of the “retained limit” which the insured 

becomes legally obligated to pay as damages to 

which this insurance applies because of “bodily 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

injury” . . . .

3. This insurance applies to “bodily injury” [ ] only 

if: 

a. The “bodily injury” [ ] is caused by an 

occurrence; 

b. The “bodily injury” [ ] occurs during the policy 

period . . . . 

II. Standard of Review

¶ 23 Summary judgment is reviewed de novo. In re Will of Jones, 362 N.C. 569, 573

(2008). Summary judgment is appropriate where there is no genuine issue of material 

fact and the movant is entitled to judgment as a matter of law. N.C.G.S. § 1A-1, Rule 

56(c) (2021); Meadows v. Cigar Supply Co., 91 N.C. App. 404, 406 (1988). Insurance 

contract interpretation is a question of law. Wachovia Bank & Tr. Co. v. Westchester 

Fire Ins. Co., 276 N.C. 348, 354 (1970). 

III. Analysis

A. Trigger of Coverage – Exposure vs. Injury-in-Fact

¶ 24 The parties dispute at what point each insurer’s coverage was triggered. All of 

the relevant policies provide coverage for “bodily injur[ies]” caused by an 

“occurrence.” The policies tend to define “bodily injury” or “personal injury” as injury, 

sickness, or disease sustained by a person, and “occurrence” as an accident including 

exposure. The issue this Court must decide, then, is the point at which the various 

benzene claimants experienced bodily injury such that RSC’s coverage under the 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

policies was activated. Put differently, we must decide which policies apply to which 

claims by determining the relevant event that activates an insurer’s coverage. 

¶ 25 Landmark and National Union argue that this activating or triggering event 

is a claimant’s actual exposure to benzene. Fireman’s Fund and RSC contend that the 

policies do not provide coverage until there is a cognizable injury. As discussed below, 

we agree with the trial court and the Court of Appeals that a claimant’s period of 

exposure to benzene is the appropriate reference point in determining which policies 

provide coverage for a given benzene-related injury.

1. Injury-in-fact Trigger Theory

¶ 26 Fireman’s Fund’s primary argument in support of an injury-in-fact trigger is 

that the terms of the policies it offered RSC “provide coverage for ‘Personal Injuries’ 

. . . which they define as ‘bodily injury,’ ‘sickness’ and ‘disease,’ which results ‘during 

the policy period.’ ” According to Fireman’s Fund, these terms require an injury-infact trigger because the policies only “afford[ ] coverage for actual injury which occurs 

during the policy period.” Fireman’s Fund claims that the policies it offered RSC 

cannot be triggered by benzene exposure alone because benzene exposure is not itself 

an injury-causing occurrence.2

¶ 27 Next, Fireman’s Fund argues that case law supports an injury-in-fact trigger.

 

2 Medical and scientific evidence presented at the trial was filed under seal. This 

opinion therefore discusses sealed information only in general terms. 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

Fireman’s Fund points to this Court’s decision in Gaston County Dyeing Machine Co. 

v. Northfield Insurance Co., which held that coverage for property damage was 

triggered by an “injury-in-fact.” 351 N.C. 293, 302–03 (2000). Gaston concerned the 

point at which insurance coverage for property damage caused by a ruptured pressure 

vessel was triggered. Id. at 295. We explained that when “the accident that causes an 

injury-in-fact occurs on a date certain and all subsequent damages flow from the 

single event, there is but a single occurrence; and only the policies on the risk on the 

date of the injury-causing event are triggered.” Id. at 304. 

¶ 28 According to Fireman’s Fund, the same logic applies here. Fireman’s Fund 

argues that, even though benzene exposure is the cause of the claimants’ injuries, it 

is the actual injury—the resulting cancers or other physical ailments—that allows 

claimants to “present claims and file suits against [RSC] in the underlying benzene 

actions . . . Stated differently, the benzene claimants each allege that [RSC] is liable 

to them for their cancers—not for the exposure itself.” Although Fireman’s Fund 

acknowledges that “unlike the property damage in Gaston, the ‘bodily injury’ here is 

not a single state confined to a narrow period of time,” Fireman’s Fund contends that 

“the key question is the same. Whatever acts prompted the accident in Gaston, it was 

not until the pressure vessel ruptured that damage occurred. If it hadn’t ruptured, 

there would not have been any property damage.” Likewise, with respect to benzene 

exposure, Fireman’s Fund argues that “[w]hatever exposures prompted the various 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

mutations, it was not until a malignancy developed that injury occurred.” 

¶ 29 Fireman’s Fund further argues that the injury-in-fact approach is “widely 

accepted” and recognizes that “multiple policy periods can be triggered in connection 

with progressive disease claims.” In support of this assertion, Fireman’s Fund cites 

numerous cases applying an injury-in-fact trigger of coverage while still allowing for 

the “application of a multiple trigger[3]in the context of bodily injury coverage for the 

progressive disease claims at issue.” See, e.g., Dow Chem. Co. v. Associated Indem.

Corp., 724 F. Supp. 474, as supplemented, 727 F. Supp. 1524 (E.D. Mich. 1989); Am.

Home Prods. Corp. v. Lib. Mut. Ins. Co., 565 F. Supp. 1485 (S.D.N.Y. 1983), as 

modified, 748 F.2d 760 (2d Cir. 1984); Stonewall Ins. Co. v. Asbestos Claims Mgmt. 

Corp., 73 F.3d 1178 (2d Cir. 1995). Relying on these cases, Fireman’s Fund argues 

that the appropriate question in applying the injury-in-fact framework is “at which 

points in time are there identifiable or actual ‘personal injuries’ . . . proven to have 

occurred to a reasonable degree of medical certainty?” 

¶ 30 Finally, Fireman’s Fund argues that benzene exposure causes identifiable 

injuries-in-fact at various points in time from malignancy until diagnosis or death. 

 

3 The multiple trigger approach recognizes that multiple events may trigger an 

insurer’s coverage such that an insurer may be held liable from the date of the injury-causing 

occurrence until manifestation of the injury. See J.H. France Refractories Co. v. Allstate Ins. 

Co., 534 Pa. 29 (1993). Courts that have adopted this approach in the asbestos context, for 

example, have recognized that “exposure to asbestos or silica, progression of the pathology, 

or manifestation of the disease” may all trigger an insurer’s liability if the insurer was on the 

risk at the time of any one of these relevant events. Id. at 37. 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

Quoting Wilder v. Amatex Corp., 314 N.C. 550, 560 (1985), Fireman’s Fund argues 

that this Court has already established that “[e]xposure to disease-causing agents is 

not itself an injury” and that “in the context of disease claims,” the point in time when 

“the immune system fails and disease occurs . . . constitutes the first injury.” Though 

recognizing that benzene is a cancer-causing agent, Fireman’s Fund argues that 

exposure does not necessarily have such consequences, and “[t]hus, to describe a 

mutation or series of mutations that has not developed into a malignancy as ‘bodily 

injury’ is not reasonable.” In Fireman’s Fund’s view, a cognizable injury only arises

when a malignancy develops into “an ‘evolving cancer,’ and actual impairment, 

injuries, sickness, and disease” result, thereby triggering coverage. 

¶ 31 RSC similarly argues that a policy’s coverage is triggered if and when a 

claimant suffers bodily injury, sickness, disease, or death during the policy period.

According to RSC, both the trial court and the Court of Appeals “erred in holding that 

coverage is triggered only if a claimant experienced exposure to benzene during the 

policy period.” Rather, RSC argues that both Gaston and the plain language of the 

policies at issue compel application of the injury-in-fact approach. However, RSC 

contends that “there is a factual dispute among the parties about how an injury-infact trigger applies to the facts of this case.” Specifically, because an injury-in-fact 

trigger has not yet been applied in this litigation, RSC urges that this Court should 

not be the first to determine “during which policy periods . . . each benzene claimant’s 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

alleged injuries in fact occur[ed].” RSC contends that there is “[c]onflicting medical 

expert testimony” creating factual and evidentiary disputes that the trial court did 

not resolve, and which this Court cannot resolve. Accordingly, RSC asks this Court 

to remand the case to the trial court to allow it “to apply an injury-in-fact trigger of 

coverage in the first instance.” 

2. The Exposure Trigger

¶ 32 By contrast, Landmark and National Union ask this Court to hold that the 

policies providing coverage for benzene exposure were triggered during the exposure 

period. As National Union puts it, the lower courts “correctly held that coverage is 

triggered under those policies in effect during a given claimant’s exposure to 

Benzene.” This means that “coverage is triggered if, and only if, the underlying 

claimant was exposed to benzene during that policy’s effective dates because a 

claimant only experiences ‘bodily injury’ during exposure to benzene.” Landmark and 

National Union agree that both North Carolina law and medical evidence require this 

conclusion. 

¶ 33 Central to their position is the argument that “a claimant only experiences 

‘bodily injury’ during exposure to benzene.” According to National Union, Fireman’s 

Fund’s argument “requiring malignancy and/or diagnosable illness” as opposed to 

DNA damage “functionally reads the term ‘bodily injury’ out of the definition of ‘bodily 

injury’ by equating it with ‘sickness’ or ‘disease.’ ” In addition to medical evidence 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

presented at trial, both Landmark and National Union rely on the United States 

District Court for the Eastern District of North Carolina’s decision in Imperial Cas. 

& Indem. Co. v. Radiator Specialty Co., 862 F. Supp. 1437 (E.D.N.C. 1994), in support 

of their position.

¶ 34 In that case, the court expressly rejected the manifestation trigger theory for 

progressive bodily injury and applied the exposure trigger theory based on the “view 

that exposure to the dangerous substance at issue during the policy period caused 

immediate, albeit undetectable, physical harm which ultimately led to disease or 

physical impairment after the expiration of the policy period.”4 Id. at 1442. (quoting 

Cont’l Ins. Cos. v. Ne. Pharm. & Chem. Co., 811 F.2d 1180, 1190 (8th Cir. 1987)). Both 

National Union and Landmark argue that this holding is consistent with evidence 

that the actual bodily injuries caused by benzene exposure happen in the days 

following exposure, whereas the consequences of the injury may take much longer to 

become detectable. 

¶ 35 Despite its relevance, Fireman’s Fund contends that Gaston’s adoption of an 

injury-in-fact trigger renders Imperial Casualty irrelevant because, although the 

federal court in that case predicted that this Court would adopt an exposure theory, 

 

4 Citing Imperial Casualty, National Union points out that “the majority of federal 

cases on this issue [progressive diseases] have found coverage by adopting the ‘exposure’ or 

the ‘continuous exposure,’ theory of when injury occurs.” 862 F. Supp. at 1442 (citing Cont’l 

Ins. Companies v. Ne. Pharm. And Chem. Co., 811 F.2d 1180, 1190 (8th Cir. 1987). 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

this Court opted for the injury-in-fact approach in Gaston. Landmark and National 

Union reject this assertion. For example, National Union responds that Gaston 

“differs from [Imperial Casualty and] this case because it assessed trigger of coverage 

for property damage occurring on a date certain, not claims for bodily injury caused 

by long-term benzene exposure.” According to National Union, Gaston actually 

confirms that courts must “look[ ] to the evidence to determine when the damage took 

place and not when the consequences of the damage became evident.” Likewise, 

Landmark takes the position that Gaston did not adopt an injury-in-fact trigger in 

the bodily-injury context, noting that Gaston considered property damage occurring 

on a date certain, rather than progressive bodily injury resulting from exposure to a 

harmful substance. 

¶ 36 Finally, National Union argues that this Court should not adopt Fireman’s

Fund’s “continuous trigger” theory that would allow coverage from “all policies in 

effect from the time a claimant is exposed to benzene until diagnosis or death.”

Though National Union acknowledges that other courts have applied a continuous 

trigger theory in the context of asbestos claims, National Union argues that “benzene 

is different than asbestos” because “[u]nlike benzene, asbestos stays in the body 

permanently and may continue to cause new injuries after exposure.” By contrast, 

benzene “causes injury only during the time periods in which a claimant is exposed 

to it and then is flushed from the body within hours or days.” National Union notes
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

that other jurisdictions have rejected the continuous trigger theory in cases involving 

exposure to “substances that cease causing injury once exposure stops” and cause 

illnesses that do not manifest until years later. See, e.g., In re Silicone Implant Ins. 

Coverage Litig., 667 N.W.2d 405 (Minn. 2003); Hancock Lab’ys, Inc. v. Admiral Ins.

Co., 777 F.2d 520 (9th Cir. 1985).

3. Analysis

¶ 37 The unambiguous language of each of the relevant policies requires the 

insurers to indemnify RSC for claims raised by claimants who suffered some form of 

personal or bodily injury caused by an occurrence and specifies that either the 

occurrence or the resulting injury must take place during the effective period of the 

insurer’s policy. But, as Landmark and National Union argue, the policies do not 

define personal or bodily injury to require some diagnosable sickness or disease for 

coverage to be triggered. For example, the term “personal injury” as used in Fireman’s 

Fund’s policies includes a “bodily injury,” such as that caused by “exposure.”

¶ 38 As Landmark and National Union argue, benzene causes bodily injury upon 

exposure. Fireman’s Fund’s and RSC’s attempt to redefine “injury-in-fact” as death, 

disease, or some other physical manifestation of the harm confuses the injury with 

its consequences. Assuming there is no intervening cause, cancer is a manifestation 

of the injury that occurs upon benzene exposure that creates a compensable claim. It 

is not the injury itself. Even though we hold that exposure to benzene is synonymous 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

with the coverage-triggering injury, that injury is only compensable if it results in 

damages. In other words, if a person is exposed to benzene but suffers no 

consequences as a result, the individual has sustained no compensable harm. 

¶ 39 We are persuaded by the reasoning of Imperial Casualty. Quoting the Sixth 

Circuit’s decision in a similar asbestos exposure case, the United States District 

Court for the Eastern District of North Carolina noted that “[c]umulative disease 

cases are different from the ordinary accident or disease situation” in part because, if 

the injury-in-fact theory were adopted, “the manufacturer’s coverage becomes illusory 

since the manufacturer will likely be unable to secure any insurance coverage in later 

years when the disease manifests itself.” Imperial Casualty, 862 F. Supp. at 1443

(quoting Ins. Co. of North Am. v. Forty-Eight Insulations, 633 F.2d 1212, 1219 (6th 

Cir. 1980)). This makes good sense: If coverage is triggered only upon disease 

manifestation, then a company that obtained coverage during a period that it 

manufactured products with benzene could not invoke its coverage if the individuals 

who were exposed to benzene during the coverage period did not develop a disease or 

die until after the policy expired. That would make the availability of coverage to RSC 

predicated on its maintenance of coverage in perpetuity, even if RSC had stopped 

manufacturing benzene-containing products.

¶ 40 Gaston does not overrule or otherwise displace Imperial Casualty. In Gaston, 

this Court was selecting between “an ‘injury-in-fact’ or a ‘date-of-discovery’ trigger of 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

coverage . . . where the date of property damage [was] known and undisputed.” 

Gaston, 351 N.C. at 299. The Court of Appeals is correct that, in dealing with coverage 

for property damage, Gaston involved distinct factual circumstances. But at their 

core, the factual distinctions between this case and Gaston relate to how to properly 

define the injury, which in turn controls when coverage is triggered under the 

relevant policies. 

¶ 41 Gaston explicitly rejected the notion that coverage-triggering damage “occurs 

‘for insurance purposes’ at the time of manifestation or on the date of discovery.” Id. 

at 303 (overruling W. Am. Ins. Co. v. Tufco Flooring E., 104 N.C. App. 312 (1991)). 

Instead, “the accident that causes an injury-in-fact occurs on a date certain and all 

subsequent damages flow from the single event, there is but a single occurrence; and 

only policies on the risk on the date of the injury-causing event are triggered.” Id. at 

304. Nothing in Gaston suggests either that exposure to a substance causing 

alterations to a person’s DNA is not an “injury-in-fact” or that an insurer offering 

coverage when a claimant is exposed to benzene is not liable for all the damages

arising from that injury.

¶ 42 Finally, Fireman’s Fund argues that, if we apply the exposure theory to this 

case, we “should also hold that . . . policies in place throughout the development of a 

claimant’s malignancy and the ‘evolving cancer,’ and the resulting bodily injury, 

sickness, and disease should be triggered too.” According to Fireman’s Fund, “it would 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

be anomalous to hold that coverage is triggered by exposure alone, when the claimant 

is healthy, but that there is no coverage triggered during the times when a claimant” 

is ill. This application of a continuous trigger would be at odds with our holding that, 

in benzene cases, the injury that triggers coverage occurs at the time of exposure. 

¶ 43 Consistent with other courts that have decided the issue, National Union and 

Landmark have established that an injury occurs at the time of benzene exposure. To 

apply a continuous trigger approach in this context would be to adopt Fireman’s 

Fund’s and RSC’s mischaracterization of the relevant injury: In order for the policies 

to provide coverage, we would be required to label the injury’s consequences (e.g., 

cancer) as the bodily injury itself. Thus, under these circumstances, a continuous 

trigger is necessarily inconsistent with an exposure trigger.5

B. Allocation

¶ 44 Next, the parties ask this Court to determine how to properly allocate RSC’s 

benzene liabilities among the providers. As discussed, while some injuries occur at a 

definite time and place, other injuries, such as those resulting from benzene exposure, 

are not so definite and could have resulted from any one exposure over a period of 

 

5 Whether the multiple-trigger theory should apply in a given case requires a factintensive analysis regarding the nature of the injury in question. In the context of benzene 

exposure where DNA mutations occur upon exposure, benzene is expelled from the body 

within a matter of days, and the injury ceases shortly after exposure ceases, the cancer that 

may later result is not itself a new injury that would trigger additional policies. But where 

the injury-inducing condition persists over time, such as in the context of asbestos exposure

or environmental contamination, or later results in new, distinct injuries, the multipletrigger theory may be appropriate.
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

years. In these circumstances, the injury may implicate numerous insurance policies

provided by different insurers over the course of the period during which the damage 

could have occurred. In such cases, it is necessary to determine how to apportion costs 

arising during the various policy years to the appropriate insurers. 

¶ 45 The period during which a particular policy’s coverage is triggered is referred 

to as “time on the risk.” Under a pro rata, or time-on-the-risk, allocation approach,

“each triggered policy bears a share of the total damages proportionate to the number 

of years it was on the risk, relative to the total number of years of triggered coverage.” 

Thomas M. Jones & Jon D. Hurwitz, An Introduction to Insurance Allocation Issues 

in Multiple-Trigger Cases, 10 Vill. Envtl. L.J. 25, 42 (1999). As Fireman’s Fund 

explains, “costs are allocated among the policies according to their respective time on 

the risk.” By contrast, all sums, or joint and several, liability “allows recovery in full

under any triggered policy of the policyholders’ choosing and leaves the selected 

insurer to pursue cross-claims against other carriers whose policies were also 

available.” Id. at 37. This means that “any policy on the risk for any portion of the 

period in which the insured sustained property damage or bodily injury is jointly and 

severally obligated to respond in full, up to its policy limits, for the loss.” Id. at 37–

38. 

¶ 46 All three insurers argue that pro rata allocation is appropriate based on the 

terms of their policies, whereas RSC advocates for adopting an all sums approach. 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

The trial court applied the pro rata method, but the Court of Appeals held that all 

sums allocation was warranted. 

1. Mootness

¶ 47 Although the Court of Appeals held that the trial court erroneously applied pro 

rata allocation in its intermediate order, it further held that this error was rendered 

moot because the trial court entered a final judgment “specif[ing] that the allocation 

is not pro rata, but is instead subject to the contractual limitations established in the 

policies,” which the Court of Appeals interpreted to require all sums allocation.

Radiator Specialty Co., 2020 WL 7039144, at *5.

¶ 48 RSC contends that the Court of Appeals reached the correct ultimate 

substantive conclusion—that the standard-form policy language compels an all sums 

rather than pro rata allocation of costs—but “muddled its correct legal ruling by 

mistakenly failing to apply it to the trial court’s Final Judgment.” 

¶ 49 RSC argues that the trial court’s final judgment incorporated the intermediate 

Order Regarding Allocation, which interpreted the disputed policy language to 

compel pro rata allocation. When the trial court’s final judgment ordered the insurers 

to defend and indemnify RSC “subject to their respective policy limits,” it meant 

“subject to their respective policy limits” as interpreted by the trial court (e.g., subject 

to their respective policy limits under a pro rata allocation method). RSC asks this 

Court to correct the Court of Appeals’ error and ensure that it is paid in accordance 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

with the all sums allocation method the Court of Appeals held to be required by the 

insurance policies.

¶ 50 The insurers do not appear to contest RSC’s assertion that the Court of Appeals 

erred in holding that the trial court’s final judgment order rendered its intermediate 

order moot. Instead, they ask that “[i]f this Court reverses the Court of Appeals’ 

mootness determination, it should also reverse the Court of Appeals’ unsupported 

endorsement of all-sums allocation because all-sums allocation is incompatible with 

the terms of the National Union policies, inequitable, and bad public policy.” 

¶ 51 Though RSC is correct that the Court of Appeals misconstrued the trial court’s 

final judgment as calling for all sums allocation, our resolution of the substantive 

question—that pro rata allocation is appropriate—overrules the Court of Appeals’

suggestion to the contrary. For the sake of clarity, the trial court’s final judgment 

should be read to require costs to be assigned pro rata. 

2. Pro Rata versus All Sums Allocation

a. The insurers’ pro rata allocation position.

¶ 52 The insurers’ central argument is that the express language of the contracts 

contemplates pro rata rather than all sums allocation. For example, as National 

Union explains, its policies with RSC contain one of two substantively identical 

insuring provisions stating, in effect, that National Union “will pay those sums that 

[RSC] becomes legally obligated to pay as damages because of ‘bodily injury’ . . . . This 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

insurance applies only to bodily injury . . . which occurs during the policy period.” 

According to National Union, this “express and plain language require[s] pro-rata 

allocation, and the Court of Appeals erred in stating otherwise.” National Union 

argues that all sums allocation is only appropriate when an insurance policy 

specifically contemplates paying “all sums” arising from relevant injuries. “The 

thinking goes that the promise to pay ‘all sums’ renders the insurer responsible for 

the entirety of the insured’s liability, even if only a portion of that liability stems from 

damage during the policy period.” Thus, National Union emphasizes that its policies 

intentionally use the term “those sums” in describing which of RSC’s liabilities 

National Union will become obligated to pay from the policy periods. 

¶ 53 In support of this argument, National Union notes that multiple 

jurisdictions—including jurisdictions that generally apply an all sums allocation 

approach—have recognized that the phrase “those sums” has a distinct meaning 

when included in an insurance agreement. See, e.g., Thomson Inc. v. Ins. Co. of N. 

Am., 11 N.E.3d 982 (Ind. Ct. App. 2014); Crossmann Cmtys. Of N.C., Inc. v. 

Harleysville Mut. Ins. Co., 395 S.C. 40 (2011).

¶ 54 Even aside from the “all sums” versus “those sums” distinction, National Union 

contends that pro rata allocation is appropriate because it “is the only allocation 

method that gives effect to the National Union Policies’ ‘during the policy period’ 

language.” Relying on many cases that have adopted this interpretation, National 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

Union argues that this term “unambiguously limits coverage to damages for injuries 

taking place during the policy’s annual term.” National Union argues that, “[i]n 

contrast, the all-sums method ignores the ‘during the policy period’ language and 

reads it out of the contract, because it makes an insurer liable for damages 

attributable to bodily injury happening outside the bargained-for policy period.”

National Union asserts this would “conflict[ ] with fundamental North Carolina law 

that unambiguous terms in a contract must be enforced as written.” 

¶ 55 Similarly, Fireman’s Fund argues that “[p]ro rata allocation is required by the 

language of the policies before this Court, which limits coverage for personal injury 

to those that result ‘during the policy period.’ ” According to Fireman’s Fund, pro rata 

allocation is consistent with the design of “ ‘[o]ccurrence-based’ insurance policies . . 

. [which] provide coverage for a discrete and finite policy period: insurers assume 

risks only for injuries that occur ‘during the policy period.’ ” By design, occurrencebased provisions “serve[ ] to limit the risks for which insurers accept responsibility.”

¶ 56 In effect, the insurers argue that, pursuant to the policies’ language, they 

assumed the risk of certain RSC liabilities “during the policy period.” In this way, 

“the ‘policy period’ of an insurance policy acts as a substantive limitation on the 

coverage afforded.” In Fireman’s Fund’s view, pro rata allocation gives effect to these 

contractual choices because the insurance agreements “afford coverage for personal 

injury to which the policies apply, which is injury that occurs during their respective 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

policy periods.” By contrast, an all sums approach effectively puts one insurer on the 

hook for injuries occurring in policy periods that its policies do not cover. 

¶ 57 According to Fireman’s Fund, the modern trend has decisively moved towards 

pro rata allocation over the all sums approach.6 In Fireman’s Fund’s telling, these 

cases accord with the language of insurance contracts limiting coverage to injuries 

occurring during the years the coverage is active, giving effect to the bargained-for 

choices of RSC and the insurers to limit coverage “for all sums attributable to injury 

occurring during the policy period—not all injury occurring at any time (including 

injury occurring outside the policy period).” 

¶ 58 Fireman’s Fund also asserts that “principles of equity and commonsense 

support pro rata allocation.” According to Fireman’s Fund, “[i]mposing liability on an 

all sums basis would create a windfall for policyholders” because “[u]nder an all sums 

approach, policyholders who bought insurance for a single year may obtain exactly 

the same coverage for loss as those who bought insurance continuously for decades.”

Fireman’s Fund contends that the insured’s choices should dictate the level of risk 

the insured is susceptible to: An insured who chooses to purchase broad coverage from 

a financially-secure insurer every year over a ten-year period should not be treated 

 

6 See, e.g., Pa. Nat’l Mut. Cas. Ins. Co. v. Roberts, 668 F.3d 106 (4th Cir. 2012); 

Arceneaux v. Amstar Corp., 200 So.3d 277 (La. 2016); S. Silica of La., Inc. v. La. Ins. Guar. 

Ass’n, 979 So.2d 460 (La. 2008); Rossello v. Zurich Am. Ins. Co., 468 Md. 92 (2020); Bos. Gas 

Co. v. Century Indem. Co., 454 Mass. 337 (2009); Dutton-Lainson Co. v. Cont’l Ins. Co., 279 

Neb. 365 (2010); Crossmann Cmtys. of N.C. v. Harleysville Mut. Ins. Co., 395 S.C. 40 (2011).
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

the same as an insured who chooses to purchase narrow coverage for a single year 

from a risky provider. 7

¶ 59 Landmark “joins in Fireman’s Fund’s Appellant Brief concerning the allocation 

issue” and notes that “the arguments in Fireman’s Fund’s Appellant Brief concerning 

why its policy language requires pro-rata allocation instead of all sums allocation 

apply equally to the Landmark policies.” In addition, Landmark notes that its policies 

“do not contain ‘all sums’ language,” and instead require Landmark only to pay “those 

sums in excess of the ‘retained limit’ which the insured becomes legally obligated to 

pay.” Thus, Landmark also joins the section of National Union’s brief “addressing 

why ‘those sums’ policy language further requires pro-rata allocation, instead of all 

sums allocation, for defense expenses and indemnity sums related to any benzene 

bodily injury lawsuit that triggers a Landmark policy.” 

b. RSC’s all sums allocation position.

¶ 60 In response, RSC argues that the plain language of the policies “require[s] a 

triggered Insurer to indemnify RSC for ‘all sums’ or ‘those sums’ it becomes legally 

obligated to pay—not a lesser, prorated sum.” According to RSC, cases from other 

 

7 National Union also makes a similar public policy argument as Fireman’s Fund, 

explaining that “[a]n all-sums approach unfairly foists upon insurers the cost for periods in 

which a policyholder chose not to obtain” adequate insurance. Meanwhile, pro rata allocation 

“forces companies to internalize part of the costs of long-tail liability and creates incentives 

for companies to minimize environmental carelessness by not permitting a policyholder who 

chooses not to be insured . . . to recover as if the policyholder had been fully covered”

EnergyNorth Nat. Gas, Inc. v. Certain Underwriters at Lloyd’s, 156 N.H. 333, 344 (2007)
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

jurisdictions demonstrate that “the phrase ‘all sums’ or ‘those sums’ means . . . a 

triggered insurer is obligated to pay all the sums the insured becomes legally 

obligated to pay as damages.” See, e.g., Keene Corp. v. Ins. Co. of N. Am., 667 F.2d

1034 (D.C. Cir. 1981); J.H. France Refractories Co., 534 Pa. 29 (1993); California v. 

Cont’l Ins. Co., 55 Cal. 4th. 186, as modified (Sept. 19, 2012).

¶ 61 RSC contends that language in the relevant policies defining occurrence as 

“continuous or repeated exposure” and requiring the insurers to pay all “ ‘damages

because of’ bodily injury” indicates that the insurers knew they would be responsible 

for paying “compensation for ongoing harm suffered after the policy period.” 

Similarly, RSC argues that there is language in the policies that is “antithetical to 

pro rata allocation, including continuing coverage, non-cumulation, and priorinsurance provisions,” which all presuppose that (1) multiple policies may be called 

upon to indemnify RSC for a single loss or occurrence, and (2) insurers may be 

required to indemnify the insured for losses arising outside of the policy period. For 

example, RSC notes that all three of the insurers’ policies “extend coverage beyond 

the policy period to liability for ‘death resulting at any time from the bodily injury,” 

provisions which other courts “have found incompatible with pro rata allocation.” At 

the same time, RSC emphasizes “the glaring absence of any express pro rata 

limitation[,]” an omission that is “particularly notable given that the Insurers have 

been aware of the hotly contested issue of ‘all sums’ vs. pro rata allocation for 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

decades.” 

¶ 62 RSC contends that the various arguments raised by the insurers in support of 

pro rata allocation are meritless. First, RSC argues that the phrase “ ‘during the 

policy period’ . . . does not limit the extent of coverage; it merely specifies the trigger 

of coverage.” Second RSC argues that the use of the phrase “those sums” rather than 

“all sums” does not “clearly and unambiguously require[ ] pro rata allocation” because 

there is “no substantive difference between the promise to pay ‘all,’ ‘those,’ or ‘the’ 

sums—each phrase promises indemnification for the full amount RSC becomes 

legally obligated to pay.” Third, RSC argues that the insurers have mischaracterized 

the state of the law on this issue and ignored “older, well-established cases” applying 

an all sums allocation method, as well as a recent North Carolina trial court decision, 

Duke Energy Carolinas, LLC v. AG Insurance SA/NV, No. 17 CVS 5594, 2020 WL 

3042168 (N.C. Super. Ct. June 5, 2020). And fourth, RSC argues that the insurers’ 

appeals to equity are misplaced, both because “[e]quitable considerations cannot 

trump contractual language” and because regardless, “[e]quity strongly favors RSC.” 

Specifically, RSC emphasizes that under an all sums allocation method, “[n]one of 

the Insurers are being asked to pay more than its policy limit; no primary insurer is 

being asked to respond until RSC satisfies the deductible or retention; . . . no excess 

insurer is being asked to respond until the full amount of the directly underlying 

policy’s limit has been exhausted,” and RSC will still be responsible for its decisions 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

not to obtain adequate insurance for a given year. RSC notes that any insurer who 

bears the costs based on RSC’s selection of a triggered policy may seek contribution 

from other insurers who were “on the risk” at the time an injury occurred. 

c. Analysis

¶ 63 It is a “well-settled principle that an insurance policy is a contract[,] and its 

provisions govern the rights and duties of the parties thereto.” Fid. Bankers Life Ins. 

Co. v. Dortch, 318 N.C. 378, 380 (1986). “As with all contracts, the object of construing 

an insurance policy ‘is to arrive at the insurance coverage intended by the parties

when the policy is issued.’ ” Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield L.L.C., 

364 N.C. 1, 9 (2010) (quoting Wachovia Bank & Tr. Co. v. Westchester Fire Ins. Co., 

276 N.C. 348, 354 (1970)). That principle is true here. Key to determining whether 

all sums allocation is appropriate is whether the policy language provides for such an 

approach.

¶ 64 Language indicating that an insurer will cover “all sums” must be present in 

the policy to warrant application of all sums allocation.8 See, e.g., Rossello v. Zurich 

Am. Ins. Co., 468 Md. 92, 119 (2020); Goodyear Tire & Rubber Co. v. Aetna Cas. & 

 

8 The dissent argues that this statement “erroneously suggests that cases from other 

jurisdictions . . . require an insurance policy to contain the terminology ‘all sums’ for an 

insurer to have complete indemnity obligations.” Though the dissent claims this statement 

is a mischaracterization, in fact, the dispositive language meriting all sums allocation in 

these cases was the presence of the term ‘all sums’ (or its equivalent) in the policies. The 

dissent fails to point to any case in which a court has applied all sums allocation in the 

absence of “all sums” language or similar terminology.
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

Sur. Co., 95 Ohio St. 3d 512, 516 (2002); Keene Corp., 667 F.2d at 1047–50; see also 

Thomas M. Jones & Jon D. Hurwitz, An Introduction to Insurance Allocation Issues 

in Multiple-Trigger Cases, 10 Vill. Envtl. L.J. 25, 37 (1999) (explaining that, when 

implementing the “all sums” approach, courts “usually focus on a policy’s ‘all sums’ 

language, which commonly states: ‘[t]he Company will pay on behalf of all the insured 

all sums which the insured shall become legally obligated to pay’ ” (alteration in 

original)).

¶ 65 Though the insurers’ policies contain language agreeing to pay “all sums” 

arising from certain liabilities (or what RSC contends is equivalent language),

Fireman’s Fund, Landmark, and National Union each point to other language in their 

policies with RSC that, in their view, expressly limits the policies to bodily injury 

sustained “during the [respective] policy period[s].” Specifically, Fireman’s Fund’s

agreements generally provide coverage for personal injuries caused by an 

“occurrence,” which is defined as “an accident or a happening or event . . . which 

unexpectedly and unintentionally results in personal injury . . . during the policy 

period.”9 Landmark’s policies provide coverage for “bodily injury” but “only if” the 

injury “occurs during the policy period.” Likewise, National Union’s primary policies 

from 1987 to 1990 “appl[y] only to bodily injury . . . which occurs during the policy 

 

9 Though there are slight variations in language between Fireman’s Fund’s various 

policies, all three of the policies state that the occurrences for which coverage is provided are 

events that happen “during the policy period.” 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

period.” Its primary policies from 1990 to 1992 state that it will cover “those sums 

that the insured becomes legally obligated to pay as damages because of ‘bodily 

injury[,]’ ” but “only if . . . [t]he ‘bodily injury’ . . . occurs during the policy period.”10

¶ 66 As the insurers argue, the modern trend is to apply pro rata allocation when 

limiting language like “during the policy period” exists, even when the policy contains 

a reference to paying “all sums” arising out of certain liabilities. See, e.g., Rossello, 

468 Md. at 119 (holding that, where “during the policy period” language was present, 

“the pro rata approach [was] unmistakably consistent with the language of standard 

. . . policies”); Crossmann Cmtys. of N.C., 395 S.C. at 62 (applying pro rata allocation 

where “during the policy period” limiting language was present and explaining that 

this interpretation “give[s] effect to each part of the insuring agreement (rather than 

focusing solely on the terms ‘all sums’ or ‘those sums’), [and] . . . is consistent with 

the objectively reasonable expectations of the contracting parties”). For example, in 

Rossello, an insurance policy stated that the insurer would “pay on behalf of the 

Insured all sums which the Insured shall become legally obligated to pay.” 468 Md. 

at 118. The Court of Appeals of Maryland, the state’s highest court, held that even in 

the face of this provision, pro rata allocation was appropriate. Id. at 119. The court 

explained that reading the policy to require all sums allocation would be “inconsistent 

 

10 National Union’s sixth policy providing excess coverage incorporates and adopts the 

terms of the primary policy from 1991 to 1992 and therefore uses the same language. 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

with the remainder of the agreement because each policy provides coverage only for 

‘bodily injury . . . which occurs during the policy period.’ ” Id. at 118. The reasoning 

in Rossello similarly applies to the policies at issue here. 

¶ 67 This case does involve a slight distinction in that the policy in Rosello defined 

bodily injury as injuries that occur during the policy period. Here, Fireman’s Fund’s

policies provide coverage for bodily or personal injuries that result from occurrences 

that happen during the policy period. This distinction is inapposite. As discussed 

above, exposure to benzene constitutes an “occurrence” that may trigger coverage if

the exposure leads to “bodily injury.” Because there is very little daylight between 

exposure and injury in the context of benzene exposure, there is virtually no practical 

purpose in distinguishing between a clause limiting coverage to injuries that occur

during the policy period and those limiting coverage to occurrences during this period. 

Pursuant to the limiting language of Fireman’s Fund’s policies then, Fireman’s Fund 

will only indemnify RSC for the costs of such occurrences that take place “during the 

policy period.” See, e.g., Bos. Gas Co. v. Century Indem. Co., 454 Mass. 337, 360, 910 

N.E.2d 290, 307–08 (2009). Thus, even if a policy contains language promising to pay 

for “all sums” that RSC “shall be obligated to pay . . . because of” personal or bodily 

injury, contractual language that limits this phrase to either bodily injuries that occur 

during the policy period or occurrences that take place during the policy period makes 

clear that the insurer’s obligation is not without limits. 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

¶ 68 Rather, using Fireman’s Fund’s policies as an example, the insurer agreed to 

pay for all of the sums (1) arising from bodily injuries; (2) resulting from occurrences; 

and (3) that took place during the policy periods. The language “during the policy 

period” therefore cabins the phrase “all sums” to a finite period of time. It follows that 

the insurers did not agree to cover all sums arising out of benzene exposure without 

regard to the policy periods during which incidents of exposure took place.

11 Instead, 

“[c]onsistent with the policy language limiting coverage to that which occurs ‘during 

the policy period,’ the timing of the [occurrence/injury] dictates . . . the portion of 

damages for which each policy is responsible.” See Rossello, 468 Md. at 119.12

¶ 69 RSC points to a North Carolina Business Court decision that applied all sums 

allocation based on the appearance of that phrase in an insurance policy. See Duke 

Energy Carolinas, LLC v. AG Ins. SA/NV, No. 17 CVS 5594, 2020 WL 3042168, at *7 

(N.C. Super. Ct. June 5, 2020). The business court’s application of all sums allocation 

 

11 Because we hold that language limiting the insurers’ liability to occurrences that 

happened “during the policy period,” we do not decide whether National Union’s and 

Landmark’s use of the term “those sums” in their policies rather than “all sums” provides an 

additional ground for protection. 

12 To be sure, some courts have applied the all sums approach, even where the limiting 

language of “during the policy period” appears. See, e.g., California v. Cont’l Ins., 55 Cal. 4th 

186, 199–200 (Sept. 19, 2012); Goodyear Tire & Rubber Co., 95 Ohio St. 3d at 515–16; J.H. 

France Refractories Co., 534 Pa. 29, 41–42 (1993); Keene Corp. v. Ins. Co. of N. Am., 667 F.2d 

1034, 1044–49 (D.C. Cir. 1981). These cases, however, tend to represent an outdated view of 

the proper interpretation of “pro rata” language. See Rossello, 468 Md. at 117. The truncated 

contractual interpretation they apply fails to full consider the limiting effect of the phrase 

“during the policy period.” 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

was based on the presence of non-cumulation provisions in the policy at issue, which 

“recognize[d] that damage may extend beyond the policy period in which the 

triggering property damage first occurs and reflect the parties’ agreement that such 

damage shall be treated as if all damage occurred in a single premium period, subject 

to a single policy limit.” Duke Energy, 2020 WL 3042168, at *8. Indeed, the business 

court “conclude[d] that the non-cumulation provisions make plain that the parties’ 

Insuring Agreement in the Policies . . . obligates the insurer to pay all sums which 

Duke becomes legally obligated to pay because of ‘property damage.’ ” Id. 

¶ 70 The Business Court’s decision in Duke Energy is consistent with cases from 

some jurisdictions that have similarly used the “all sums” approach when noncumulation or continuing coverage provisions were present in a policy, even when

“during the policy period” limiting language was also present. In In re Viking Pump, 

for example, the New York Court of Appeals recently held that “all sums” allocation 

applied where an insurer’s excess policies contained non-cumulation policies with 

continuing coverage provisions. In re Viking Pump, 27 N.Y.3d 244, 264 (2016). There, 

the court distinguished one of its earlier cases applying pro rata allocation because 

that case did not consider the effect of non-cumulation provisions on policy language. 

Id. at 259. In short, the court reasoned that, in some contracts, “it would be 

inconsistent with the language of the non-cumulation clauses to use pro rata 

allocation” because “[s]uch policy provisions plainly contemplate that multiple 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

successive insurance policies can indemnify the insured for the same loss or 

occurrence.” Id. at 261. It is important to note that both Duke Energy and In re Viking 

Pump are distinguishable from this case because, unlike asbestos exposure, for 

instance, which was at issue in In re Viking Pump, we have explained that benzene 

exposure causes injury at the time of exposure, rather than a continuous injury. See 

id. at 251. Further, its interpretation and application of the non-cumulation 

provisions do not apply in this case. 

¶ 71 National Union’s policies do not contain any such provisions, and the reasoning 

from In re Viking Pump and Duke Energy is therefore inapplicable.13 However, RSC 

characterizes provisions in Fireman’s Fund’s and Landmark’s policies as noncumulation and continuing coverage provisions. After reviewing the language of these 

agreements, however, we are not convinced that Fireman’s Fund or Landmark 

contemplated the possibility that they would be liable for “all sums” arising from 

liabilities that occurred during any policy period.

¶ 72 With respect to Fireman’s Fund, RSC argues that Fireman’s Fund’s umbrella 

policies “follow form” to the underlying policies, thereby incorporating the underlying 

 

13 RSC argues that all three insurer’s policies contain continuing coverage provisions 

stating that the policies “extend coverage beyond the policy period to liability for ‘death 

resulting at any time from the bodily injury.’ ” In the context of benzene exposure, this 

provision does not suggest an insurer contemplated all sums allocation. Because the injury

occurs at the time of exposure whereas the consequences of that injury, such as death, occur 

long after, it is not just logical, but necessary, that the insurers would remain liable for the 

injuries’ consequences, but not for injuries that occur outside of their respective policy 

periods. 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

policies’ terms. These underlying policies, in turn, contain non-cumulation provisions. 

Thus, RSC contends that the non-cumulation provisions are included within the 

umbrella policies.14 RSC recognizes that “non-cumulation and prior insurance 

provisions have a well-recognized purpose: to limit an insurer’s liability to a single 

policy limit when an occurrence triggers multiple policies issued by that insurer.” But 

Fireman’s Fund’s excess policies at issue “expressly do not incorporate underlying 

provisions that relate to the amount and limits of liability” like the non-cumulation 

provisions. See, e.g., Deere & Co. v. Allstate Ins. Co., 32 Cal. App. 5th 499, 517 (2019), 

as modified on denial of reh'g (Mar. 26, 2019) (recognizing that follow form provisions 

in excess insurance policies excluded underlying terms related to “the amounts and 

limits of liability,” and holding that the excess policies’ follow form clauses 

incorporated “the scope (i.e. products-liability coverage) of the first-layer policies but 

not the monetary caps on liability”); Int’l. Paper Co. v. Affiliated FM Ins. Co., No. 974 

 

14 RSC points to two non-cumulation provisions that it believes have been incorporated 

into Fireman’s Fund’s excess policies: 

It is agreed that if any loss covered hereunder is also covered in 

whole or in part under any other excess policy issued to the 

Assured prior to the inception date hereof the limit of liability 

. . . shall be reduced by any amounts due to the Assured on 

account of such loss under such prior insurance.

If collectible insurance under any other policy(ies) of the 

COMPANY is available to the INSURED, covering a loss also 

covered hereunder . . . the COMPANY’S total liability shall in no 

event exceed the greater or greatest limit of liability applicable 

to such loss under this or any other such policy(ies). 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

350, 2005 WL 7872235, at *5-6 (Cal. Super. Mar. 17, 2005) (concluding that umbrella 

policy followed form to underlying policy, except with respect to non-cumulation 

provision based on umbrella policy’s exception excluding incorporation of underlying 

policy terms pertaining to “the amount and limits of liability”). Thus, the noncumulation provisions are not incorporated into the umbrella policies in the first 

instance. 

¶ 73 Further, RSC “misconstrues” Fireman’s Fund’s non-cumulation provisions. See 

Cont’l Cas. Co. v. Hennessy Indus., Inc., No. 1-18-0209, 2019 Ill. App. Unpub. LEXIS 

218, at *44 (Ill. Ct. App. Feb. 13, 2019). Importantly, “the language of the clauses 

provides for their application where more than one policy is required to indemnify for 

the same loss, not where the policy is required to indemnify for a loss that occurred 

outside its policy period.” Id. In other words, the policies simply impose coverage 

limits on the amount RSC may claim if other policies provide coverage for a single

injury. 

¶ 74 RSC similarly misinterprets the “continuing coverage” provisions it points to 

in Landmark’s policies.15 The language RSC emphasizes describes Landmark’s 

obligations for a continuous injury. Even assuming the health effects of benzene 

 

15 RSC points to a provision in Landmark’s policies which states the following: “ ‘Bodily 

injury’ . . . which occurs during the policy period and was not, prior to the policy period, known 

to have occurred by any insured . . . includes any continuation, change or resumption of that 

‘bodily injury’ . . . after the end of the policy period.” 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

exposure can be described in this manner, which Landmark disputes, the provision 

does not suggest that Landmark agrees to assume responsibility for all liabilities 

from any policy period. This language “simply sets forth the unremarkable 

proposition . . . [that] the policy in place when the injury occurs will cover all 

consequential damages, even those taking place after the policy period.” New 

England Insulation Co. v. Liberty Mut. Ins. Co., 83 Mass. App. Ct. 631, 637 (2013).

As such, the non-cumulation and continuing coverage provisions that RSC points to 

do not counsel against pro rata allocation in the context of this case.16

C. Exhaustion

¶ 75 Finally, we must decide whether horizontal or vertical exhaustion applies to 

Landmark’s duty to defend RSC under the umbrella policies Landmark issued. While 

an insurer’s duty to indemnify an insured arises from policy language agreeing to pay 

“all sums” or “those sums” arising from certain liabilities that the insured becomes 

legally obligated to pay, some policies also contain the duty to defend lawsuits, claims, 

proceedings, etc. related to various forms of injury. RSC contends that its policies 

with both Landmark and National Union contain such a duty. It is Landmark’s duty 

to defend that is at issue in this appeal, as the trial court found, and the Court of 

Appeals affirmed, that only horizontal exhaustion of all other available policies 

 

16 Because our holding is specific to the nature of benzene-related injury, it does not 

conflict with the holdings of Duke Energy and In re Viking Pump.
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

triggers its duty. See Radiator Specialty Co., 2020 WL 7039144, at *5.

¶ 76 Vertical exhaustion allows a policyholder to obtain coverage from an excess 

policy once the primary policies beneath it within the same policy period are 

exhausted. See Cmty. Redevelopment Agency v. Aetna Cas. & Sur. Co., 50 Cal. App.

4th 329, 339–40 (1996). Horizontal exhaustion, on the other hand, requires a 

policyholder to exhaust all primary policies from other policy periods in order to 

access excess coverage. See Kajima Constr. Serv., Inc. v. St. Paul Fire & Marine Ins. 

Co., 227 Ill.2d 102, 105 (2007). The trial court adopted a mixed approach, applying 

horizontal exhaustion to Landmark’s duty to defend but vertical exhaustion to its 

duty to indemnify. In other words, with respect to Landmark’s duty to defend, the 

trial court held that the duty only exists when all other policies have been exhausted. 

The Court of Appeals affirmed, holding that Landmark’s duty to defend was triggered 

by horizontal exhaustion. 

1. RSC’s and Landmark’s Competing Contractual Interpretations

¶ 77 The provision relevant to this dispute states:

2. [Landmark] will have the right and duty to defend any 

“suit” seeking those [i.e., covered] damages when:

a. The applicable limits of insurance of the “underlying 

insurance” and other insurance have been used up in the 

payment of judgments or settlements; or 

b. No other valid and collectible insurance is available to 

the insured for damages covered by this policy.

¶ 78 According to Landmark, Sections 2(a) and 2(b) are properly read in conjunction
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

to mean that “a duty to defend may arise under a Landmark policy for a given 

Benzene Action seeking covered damages when all of RSC’s . . . primary policies are 

exhausted, and there is no other valid, solvent policy available to cover the Benzene 

Action.” Landmark policies define the phrase “underlying insurance” in the first 

prong as “the policies [ ] listed in the Schedule of Underlying Insurance.” While this 

term is specifically defined, the term “other insurance” in Section 2(a) is not. Thus, 

Landmark argues that “other insurance” must be given a separate, ordinary 

meaning. Because the phrase “underlying insurance” encompasses exactly what it 

suggests—the underlying, primary policies in a given policy period—Landmark 

argues that “other insurance” necessarily encompasses “any other policies held by 

[RSC]” that were unexhausted, including those outside of the policy year. This 

reading exemplifies horizontal exhaustion. Landmark then reads the second prong 

as “simply meaning a valid policy issued by a solvent insurer.” According to 

Landmark, absent the second prong, “the existence of an unexhausted primary policy, 

which is invalid or issued by an insolvent insurer, would preclude a duty to defend 

because of the first prong.” 

¶ 79 Applying its vertical exhaustion approach, RSC interprets the provision 

differently and believes that Section 2(b) is properly read in isolation—a reading 

which would make Landmark’s policies “the only available insurance for Benzene 

Claims during the Landmark Policy Periods” and trigger Landmark’s duty to defend 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

under Section 2(b). 

¶ 80 Based on this interpretation, RSC argues that the trial court correctly applied 

vertical exhaustion to the duty to indemnify under Landmark’s umbrella policies but 

erred in applying horizontal exhaustion to the duty to defend under those same 

policies. According to RSC, “[n]early all jurisdictions have rejected horizontal 

exhaustion altogether, and no court has ever adopted the trial court’s mixed approach 

of horizontal exhaustion for defense but vertical exhaustion for indemnity.” 

¶ 81 RSC further argues that horizontal exhaustion is inapplicable “because 

Landmark is functioning as a primary insurer.” According to RSC, the “directly 

underlying primary policies”—i.e., the primary policies issued during the same years 

Landmark’s umbrella policies applied—included “pre-existing damages exclusions” 

that expressly precluded the primary insurer from paying benzene-related claims.

RSC’s argument that horizontal exhaustion does not apply is based on the idea that 

“Landmark’s umbrella policies ‘drop down’ and provide primary (i.e., first-dollar) 

coverage because there is no benzene coverage ‘underlying’ Landmark’s policies.” 

¶ 82 RSC also contends that horizontal exhaustion “contradicts North Carolina 

Law.” According to RSC, Landmark’s contention that the phrase “any other 

insurance” appearing in its policies “requires exhausting primary policies in previous 

and subsequent policy years before any excess policy must respond” is in conflict with 

North Carolina cases that “consistently interpret ‘other insurance’ language as 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

referencing only concurrent coverage available within the same policy period.” RSC 

argues that the cases Landmark relies upon—including Gaston—“are inapposite 

because they involved concurrent policies in effect during the same policy year—i.e., 

vertical exhaustion scenarios.” In addition, RSC notes that a leading insurance 

treatise defines “other insurance” as referring to “only to two or more concurrent 

policies, which insure the same risk and the same interest, for the benefit of the same 

person, during the same period.” 

¶ 83 Finally, RSC argues that requiring horizontal exhaustion would (1) “effectively 

increase the operative attachment point” (e.g., the point at which umbrella coverage 

becomes available) “for each excess insurance policy many times over,” (2) be difficult 

to apply, and (3) impose a significant burden on insureds to prove eligibility for 

coverage. 

¶ 84 Landmark, on the other hand, argues that the lower courts “correctly ruled 

that the Landmark policies require ‘horizontal exhaustion’ before Landmark’s duty 

to defend may arise.” As explained previously, Landmark first argues that RSC’s 

position that vertical exhaustion applies ignores and contradicts the language of the 

relevant policy agreement.

¶ 85 Next, Landmark argues that application of a horizontal exhaustion 

requirement is consistent with prior cases that “have given effect to umbrella policy

provisions requiring exhaustion of unscheduled primary policies.” In particular, 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

Landmark points to Reliance Insurance. Co. v. Lexington Insurance Co., 87 N.C. App. 

428 (1987), a case in which Landmark contends the Court of Appeals “did not require 

the [umbrella insurer] to pay upon exhaustion of the scheduled underlying [primary 

insurance policy],” but instead required the umbrella insurer to pay only once the 

“unscheduled primary insurance” was also exhausted. Similarly, Landmark points to

Harleysville Mutual Insurance Co. v. Zurich-American Insurance Co., 157 N.C. App. 

317, disc. rev. denied, 357 N.C. 250 (2003), another case where Landmark contends 

that “[b]ecause there was an unexhausted, unscheduled primary policy, [the] court 

held [the] umbrella policy did not apply.” Although Landmark acknowledges that 

Reliance and Harleysville “involved unscheduled primary policies effective during the 

same period as the umbrella/excess policy,” Landmark contends that these decisions 

are “instructive because they required exhaustion of all scheduled and unscheduled 

primary policies before the umbrella/excess policy responded.” 

¶ 86 Landmark disputes RSC’s argument that Landmark’s umbrella policy was 

operating as a primary policy because the underlying policy excluded benzene claims 

from coverage. According to Landmark, this argument “is not really an argument at 

all” because it ignores “the policy language to the contrary” contained in the insurance 

agreement. Landmark contends that the fact that “the scheduled underlying policies 

may exclude coverage [for benzene claims] does not change [the] result, because both 

scheduled and unscheduled primary policies must be exhausted and unavailable 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

before Landmark’s attachment point is reached.” 

2. Analysis

¶ 87 We agree that the most logical reading of the agreement between Landmark 

and RSC requires vertical exhaustion. Landmark’s interpretation ignores basic terms 

within the agreement, contrary to its insistence that contractual language be given 

“its ordinary meaning.” 

¶ 88 Most fundamentally, Landmark’s interpretation fails to acknowledge the 

agreement’s use of the disjunctive “or.” “Where a [contract] contains two clauses 

which prescribe its applicability, and the clauses are connected by a disjunctive (e.g.

‘or’), the application of the [contract] is not limited to cases falling within both clauses, 

but will apply to cases falling within either of them.” Davis v. N.C. Granite Corp., 259 

N.C. 672, 675 (1963) (cleaned up); see also 73 Am. Jur. 2d, Statutes § 147 (2022) (“In 

its elementary sense the word ‘or’ . . . is a disjunctive particle indicating that the 

various members of the sentence are to be taken separately.”). This word, though 

simple, gives a contractual provision a very different meaning than a contractual 

provision with otherwise identical language but instead using a conjunctive phrase, 

as the latter provision requires the connecting sentences to be read in tandem. See 

Wells Fargo Ins. Servs. USA v. Link, 372 N.C. 260, 272–73 (2019). Landmark’s 

reading of Section 2 would have us ignore this basic principle of contractual 

interpretation.
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

¶ 89 From Landmark’s perspective, its duty to defend RSC does not arise unless (1) 

all other scheduled and nonscheduled policies have been exhausted; and (2) no other 

valid and collectible policy is available to cover this action. This interpretation 

disregards that the agreement’s use of the term “or” requires us to read these 

circumstances as alternative options that trigger Landmark’s duty to defend. Thus, 

taking Section 2(b) on its own, Landmark’s duty to defend was triggered so long as 

“[n]o other valid and collectible insurance [was] available to [RSC] for damages 

covered by th[e] policy.” According to RSC, its underlying insurance policies covering 

the same periods as its Landmark policies do not provide coverage for benzene 

actions, whereas the Landmark policies do. There was therefore no other “valid and 

collectible insurance” for damages from the benzene actions other than the Landmark 

policies themselves. 

¶ 90 Moreover, as the New York Court of Appeals recently explained, “ ‘other 

insurance’ clauses ‘apply when two or more policies provide coverage during the same

period, and they serve to prevent multiple recoveries from such policies.’ ” In re Viking 

Pump, 27 N.Y.3d at 266 (quoting Consol. Edison Co. v Allstate Ins. Co., 98 N.Y.2d 

208, 223 (2002)). Contrary to Landmark’s assertion that “other insurance” implicates 

policies from other periods, “such clauses ‘have nothing to do’ with ‘whether any 

coverage potentially exist[s] at all among certain high-level policies that were in force 

during successive years.’ ” Id. (alteration in original) (quoting Consol. Edison, 98 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

N.Y.2d at 223). This interpretation of “other insurance” is consistent with decisions 

from North Carolina’s courts. See, e.g., St. Paul Fire & Marine Ins. Co. v. Vigilant Ins.

Co., 919 F.2d 235, 241 (4th Cir. 1990) (explaining that “other insurance” clauses 

“apply only when the coverage is concurrent[, and] [w]here . . . the polic[y] periods did 

not overlap at all, such clauses are not applicable”); City of Greensboro v. Rsrv. Ins.

Co., 70 N.C. App. 651, 660 (1984) (explaining that “other insurance” language is 

implicated only where “policies provide overlapping or concurrent coverage”); see also 

Plastics Eng’g Co. v. Liberty Mut. Ins. Co., 315 Wis.2d 556, 580 (2009) (“The accepted 

meaning of ‘other insurance’ provisions does not include application to successive 

insurance policies.”). 

¶ 91 Because RSC is not “seeking multiple recoveries from different insurers under 

concurrent policies for the same loss, and the other insurance clause does not apply 

to successive insurance policies,” Section 2(a) does not indicate Landmark intended

that its duty to indemnify be subject to horizonal exhaustion. See In re Viking Pump, 

27 N.Y.3d at 266. We therefore conclude that Landmark’s excess policies are triggered 

when vertical exhaustion has been achieved, such that there is no other “valid and 

collectible” policy available to cover a benzene action during a concurrent policy 

period.

IV. Conclusion

¶ 92 We affirm in part and reverse in part the Court of Appeals’ decision below. We 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Opinion of the Court

affirm its holding that the trial court correctly applied an exposure-based approach 

in determining at what point the insurers’ coverage was triggered. However, we 

reverse its holding that the trial court’s final judgment rendered the trial court’s 

decision regarding allocation moot, and we further hold that the trial court properly 

applied pro rata allocation based on the policies at issue. Finally, we reverse the Court 

of Appeals’ decision to uphold the trial court’s finding that horizontal exhaustion 

applies to Landmark’s duty to defend, and we hold that this duty is instead triggered 

by vertical exhaustion. Accordingly, we remand this case to the trial court to apply 

vertical exhaustion and to conduct other proceedings consistent with this opinion. 

AFFIRMED IN PART AND REVERSED IN PART; REMANDED.

Justice BERGER did not participate in the consideration or decision of this 

case.
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

Justice BARRINGER concurring in part and dissenting in part.

¶ 93 While I agree with the majority on several points, the majority neglects to 

follow this Court’s well-established rules of construction for insurance policies.

A contract of insurance should be given that 

construction which a reasonable person in the position of 

the insured would have understood it to mean and, if the 

language is reasonably susceptible of different 

constructions, it must be given the construction most 

favorable to the insured. Indeed, we have stated that 

probably the most important general rule guiding the 

courts in the construction of insurance policies is that all 

doubt or uncertainty, as to the meaning of the contract, 

shall be resolved in favor of the insured.

Register v. White, 358 N.C. 691, 699–700 (2004) (cleaned up); see, e.g., Harleysville 

Mut. Ins. Co. v. Buzz Off Insect Shield, L.L.C., 364 N.C. 1, 9–10 (2010); Grant v. 

Emmco Ins. Co., 295 N.C. 39, 43 (1978). These rules of construction apply to all types 

of insurance and to all insureds, whether an individual or an entity.

¶ 94 Nevertheless, the majority reads into the policies limiting language that is not 

there. Specifically, none of the policies before us require (a) the occurrence to occur in 

the policy period or (b) the damages to occur in the policy period. Rather, the limiting 

language of “during the policy period” only modifies the defined term “Bodily injury” 

(or “Personal injury”). While it may be tempting for this Court to rule without 

analyzing the policy language, shirking our duty for a simple solution should concern 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

all. Any business or individual who has purchased insurance could be in a similar 

situation to the plaintiff before us now. Radiator Specialty Company (Radiator) has 

for almost a decade had to litigate against their insurers to compel them to provide 

them the coverage they purchased. Therefore, I respectfully concur in part and

dissent in part.

I. Background and Policies

¶ 95 In the course of its business, Radiator purchased standard-form product 

liability policies from various insurers, including defendants Fireman’s Fund 

Insurance Company (Fireman), Landmark American Insurance Company 

(Landmark), and National Union Fire Insurance Company of Pittsburgh, PA

(National). In 1994, claimants nationwide began filing lawsuits, alleging that 

exposure to Radiator’s products caused them to develop cancer.

¶ 96 In 2013, Radiator filed this action seeking a declaration of the duties and 

obligations of the defendant insurers regarding fifty-five policies. Radiator alleged 

that it had incurred and paid defense and indemnity amounts for products liability 

claims related to alleged benzene in its products and that the defendant insurers had 

not indemnified Radiator for defense costs or liabilities for these claims.

¶ 97 In 2015, the parties moved for summary judgment on various issues of 

insurance contract interpretation, which are addressed herein as pertinent to the 

appeal before us. In 2018, the case proceeded to a bench trial. The trial court 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

addressed the following factual question: “For purposes of triggering the duty to 

indemnify, what is the date the claimant was first exposed and last exposed to any 

[Radiator] benzene-containing product with respect to each settled Benzene Claim?” 

The trial court then entered a final judgment. Some of the parties appealed the 

summary judgment orders.

¶ 98 The policies issued by Landmark to Radiator state:

I. INSURING AGREEMENT

1. We will pay on behalf of the insured those sums in 

excess of the “retained limit” which the insured 

becomes legally obligated to pay as damages to 

which this insurance applies because of “bodily 

injury”, “property damage” or “personal and 

advertising injury”.

. . . .

3. This insurance applies to “bodily injury” and “property 

damage” only if:

a. The “bodily injury” or “property damage” is 

caused by an occurrence;

b. The “bodily injury” or “property damage” occurs 

during the policy period; . . .

. . . .

V. DEFINITIONS

. . . .

3. “Bodily injury” means bodily injury, sickness, disease, 

disability, shock, mental anguish, mental injury and 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

humiliation of a person, including death resulting from any 

of these at any time.

. . . .

14. “Occurrence” means an accident, including continuous or 

repeated exposure to substantially the same general 

harmful conditions.

(Italic emphases added.)

¶ 99 The policies issued by National to Radiator state:

1. Insuring Agreement.

a. We will pay those sums that the insured becomes 

legally obligated to pay as damages because of 

“bodily injury” or “property damage” included within 

the “products-completed operations hazard” to 

which this insurance applies. No other obligation or 

liability to pay sums or perform acts or services is 

covered unless explicitly provided for under 

SUPPLEMENTARY PAYMENTS. This insurance 

applies only to “bodily injury” and “property 

damage” which occurs during the policy period. The 

“bodily injury” and “property damage” must be 

caused by an “occurrence.” The “occurrence” must 

take place in the “coverage territory”. . . .

 . . . .

b. Damages because of “bodily injury” include damages 

claimed by any person or organization for care, loss 

of services or death resulting at any time from the 

“bodily injury.”

. . . .

SECTION V - DEFINITIONS
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

. . . .

2. “Bodily injury” means bodily injury, sickness or disease 

sustained by a person, including death resulting from 

any of these at any time.

. . . .

8. “Occurrence” means an accident including continuous 

or repeated exposure to substantially the same general 

harmful conditions.

(Italic emphases added.)

¶ 100 The first policy issued by Fireman follows form1 to the underlying insurance 

with the following policy language:

INSURING AGREEMENTS

I. COVERAGE –

Underwriters hereby agree, subject to the limitations, 

terms and conditions hereinafter mentioned, to indemnify 

the Assured for all sums which the Assured shall be 

obligated to pay by reason of liability

(a) Imposed upon the Assured by law,

. . . .

 

1 Excess policies are often described as either a “stand-alone policy” or a “follow form” 

policy. New Appleman on Insurance Law Library Edition, Essentials of Insurance Law 

§ 1.06[7], at 1-61 (Jeffrey E. Thomas & Francis J. Mootz III eds., 2010). “An ‘excess policy’ 

provides coverage above the underlying limit of primary insurance . . . .” Id. An excess policy, 

thus, “expands the dollar amount of coverage available to compensate for a loss.” Id. A standalone policy “relies on its own insuring agreement, conditions, terms, and definitions to 

describe the coverage.” Id. A follow form policy “incorporates by reference the terms, 

conditions, exclusions, etc. of the primary policy.” Id.
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

for damages on account of: –

(i) Personal Injuries

(ii) Property Damage

(iii) Advertising liability,

caused by or arising out of each occurrence happening 

anywhere in the world.

. . . .

THIS POLICY IS SUBJECT TO THE FOLLOWING 

DEFINITIONS:

. . . .

2. PERSONAL INJURIES –

The term “Personal Injuries” wherever used herein 

means bodily injury (including death at any time resulting 

therefrom), mental injury, mental anguish, shock, 

sickness, disease, disability, false arrest, false 

imprisonment, wrongful eviction, detention, malicious 

prosecution, discrimination, humiliation; also libel, slander 

or defamation of character or invasion of rights of privacy, 

except that which arises out of any Advertising activities.

. . . .

5. OCCURRENCE –

The term “Occurrence” wherever used herein shall 

mean an accident or a happening or event or a continuous 

or repeated exposure to conditions which unexpectedly and 

unintentionally results in personal injury, property 

damage or advertising liability during the policy period. All 

such exposure to substantially the same general conditions 

existing at or emanating from one premises location shall 

be deemed one occurrence.
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

6. DAMAGES –

The term “Damages” includes damages for death 

and for care and loss of services resulting from personal 

injury. 

(Italic emphases added.)

¶ 101 The second policy issued by Fireman follows form to the underlying insurance 

with the following policy language:

INSURING AGREEMENTS

I Coverage. To pay on behalf of the insured the 

ultimate net loss in excess of the applicable underlying (or 

retained) limit hereinafter stated, which the insured shall 

become obligated to pay by reason of the liability imposed 

upon the insured by law or assumed by the insured under 

contract:

(a) PERSONAL INJURY LIABILITY. For damages, 

including damages for care and loss of services, 

because of personal injury, including death at any 

time resulting therefrom, sustained by any person or 

persons,

. . . .

to which this insurance applies under Coverages 

I(a) . . . above, caused by an occurrence.

. . . .

IV Other Definitions. When used in this policy 

(including endorsements forming a part hereof):

(a) “Personal injury” means (1) bodily injury, 

sickness, disease, disability, shock, fright, mental anguish 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

and mental injury; (2) false arrest, false imprisonment, 

wrongful eviction, wrongful detention, malicious 

prosecution or humiliation; (3) libel, slander, defamation of 

character or invasion of right of privacy, unless arising out 

of any advertising activities; and (4) assault and battery 

not committed by or at the direction of the insured, unless 

committed for the purpose of preventing or eliminating 

danger in the operation of aircraft or for the purpose of 

protecting the property of the insured or the person or 

property of others;

. . . .

(e) “Occurrence.” With respect to Coverage 

I(a) . . . occurrence shall mean an accident, including 

injurious exposure to conditions, which results, during the 

policy period, in personal injury or property damage 

neither expected nor intended from the standpoint of the 

insured. For the purpose of determining the limit of the 

company’s liability, all personal injury and property 

damage arising out of continuous or repeated exposure to 

substantially the same general conditions shall be 

considered as arising out of one occurrence.

. . . .

V Policy Period, Territory. This policy applies only 

to personal injury, property damage or advertising 

occurrences which happen anywhere during the policy 

period.

(Italic emphases added.)

¶ 102 The third policy issued by Fireman follows form to the underlying insurance 

with the following policy language:

INSURING AGREEMENTS
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

I. COVERAGE

To indemnify the INSURED for ULTIMATE NET 

LOSS, as defined hereinafter, in excess of RETAINED 

LIMIT, as herein stated, all sums which the INSURED 

shall be obligated to pay by reason of the liability imposed 

upon the INSURED by law . . . because of:

A. PERSONAL INJURY, as hereinafter defined;

. . . .

to which this policy applies, caused by an OCCURRENCE, 

as hereinafter defined, happening anywhere in the world.

. . . .

DEFINITIONS

. . . .

H. OCCURRENCE:

With respect to Coverage I(A) and I(B) 

“OCCURRENCE” shall mean an accident or event 

including continuous repeated exposure to conditions, 

which results, during the policy period, in PERSONAL 

INJURY or PROPERTY DAMAGE neither expected 

nor intended from the standpoint of the INSURED. For 

the purpose of determining the limit of the Company’s 

liability, all personal injury and property damage 

arising out of continuous or repeated exposure to 

substantially the same general conditions shall be 

considered as arising out of one OCCURRENCE.

I. PERSONAL INJURY:

The term PERSONAL INJURY wherever used herein 

means:

(1) bodily injury, sickness, disease, disability or shock, 

including death at any time resulting therefrom, 

mental anguish and mental injury,
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

(2) false arrest, false imprisonment, wrongful eviction, 

wrongful entry, wrongful detention or malicious 

prosecution,

(3) Libel, slander, defamation of character, humiliation 

or invasion of the rights of privacy, unless arising 

out of advertising activities,

which occurs during the policy period.

(Italic emphases added.)

II. Analysis

A. Trigger for Coverage

¶ 103 As to the first issue, the trigger for coverage, the majority correctly holds that 

there is no material question of fact that benzene exposure caused “bodily injury” in 

the form of alterations2 to DNA at the time of exposure. On the record before this 

Court, the evidence indisputably supports that a “bodily injury” in fact occurred upon 

exposure to benzene for the individuals that later developed benzene related diseases 

and sued Radiator.

¶ 104 However, the term “Bodily injury” (or “Personal injury” as used in Fireman’s 

policies) is defined to include not only “bodily injury” but also “sickness or disease 

sustained by a person, including death resulting from any of these at any time.” 

Hence, in accordance with the policy language, a “Bodily injury” (or “Personal injury”) 

will also occur upon a person sustaining sickness or disease from an occurrence.

 

2 Experts also used the terminology of DNA damage and mutation.
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

¶ 105 Here, that occurrence is benzene exposure. While a few of the policies do 

contain other limiting language, such as “all personal injury . . . arising out of 

continuous or repeated exposure to substantially the same general conditions shall 

be considered as arising out of one occurrence,” which could prevent the stacking of 

policy limits for continuous and repeated exposures, there is no language in any policy 

before this Court limiting or precluding the triggering of the policy upon sickness or 

disease because a bodily injury previously occurred. Thus, Radiator could establish 

that multiple policies are triggered for the same occurrence, here, exposure to 

benzene. See Stonewall Ins. Co. v. Asbestos Claims Mgmt. Corp., 73 F.3d 1178, 1195 

(2d Cir. 1995) (“[T]here can be triggering at more than one point in time when a 

claimant asserts injury-in-fact due to . . . cancer.”), opinion modified on denial of reh’g, 

85 F.3d 49 (2d Cir. 1996). Even if the policy language was ambiguous, “[t]his Court 

resolves any ambiguity in the words of an insurance policy against the insurance 

company.” Harleysville, 364 N.C. at 9.

¶ 106 In contrast, the majority, without analyzing the policies or citations, merely 

concludes that an “application of a continuous trigger would be at odds with our 

holding that, in benzene cases, the injury that triggers coverage occurs at the time of 

exposure.” (Emphasis added.) However, we should not and cannot ignore the policy 

language in this case. The policy language dictates the triggers for indemnity as 

bodily injury during the policy period, with bodily injury meaning bodily injury, 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

sickness, or disease (among other things in some policies) without additional limiting 

language. Thus, the policy language clearly contemplates and provides for the 

possibility of multiple triggers.

¶ 107 Further, this Court is reviewing a summary judgment order. This Court 

reviews a summary judgment order de novo to assess the policy language and the 

evidence to determine if there is a genuine issue as to any material fact and whether 

any party is entitled to judgment as a matter of law. See N.C.G.S. § 1A-1, Rule 56(c) 

(2021); N.C. Farm Bureau Mut. Ins. Co., Inc. v. Martin, 376 N.C. 280, 285–86 (2020). 

In this case, there is no material question of fact that a bodily injury in fact occurs 

upon exposure to benzene. However, in future cases, the policy language and expert 

testimony may vary.

B. Indemnity Obligation

¶ 108 As to the second issue concerning the insurers’ indemnity obligation, the 

majority inverts the rules of construction for insurance policies by creating a 

rebuttable presumption in favor of an insurer. The majority also erroneously suggests 

that cases from other jurisdictions require an insurance policy to contain the 

terminology “all sums” for an insurer to have complete indemnity obligations.

¶ 109 To the contrary, the cases cited by the majority that apply all sums allocation 

recognize the absence of language limiting the insurer’s liability once triggered. Keene 

Corp. v. Ins. Co. of N. Am., 667 F.2d 1034, 1048 (D.C. Cir. 1981) (“Once triggered, 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

each policy covers [the insured]’s liability. There is nothing in the policies that 

provides for a reduction of the insurer’s liability if an injury occurs only in part during 

a policy period.”); Goodyear Tire & Rubber Co. v. Aetna Cas. & Sur. Co., 95 Ohio St.

3d 512, 2002-Ohio-2842, 769 N.E.2d 835, at ¶ 9 (“There is no language in the 

triggered policies that would serve to reduce an insurer’s liability if an injury occurs 

only in part during a given policy period. The policies covered [the insured] for ‘all 

sums’ incurred as damages for an injury to property occurring during the policy 

period. The plain language of this provision is inclusive of all damages resulting from 

a qualifying occurrence. Therefore, we find that the ‘all sums’ allocation approach is 

the correct method to apply here.”). Other courts have also stated, “The majority of 

courts have held that without a pro rata clause in the policies, the insurance 

companies cannot limit their obligations to a pro rata share or portion of [the 

insured]’s liabilities.” Monsanto Co. v. C.E. Heath Comp. & Liab. Ins. Co., 652 A.2d 

30, 35 (Del. 1994).

¶ 110 But regardless, this Court’s binding precedent directs us to the policy language 

and requires us to consider what the reasonable insured would understand the policy 

to mean. See Register, 358 N.C. at 699–700. Moreover,

[i]n the construction of contracts, even more than in the 

construction of statutes, words which are used in common, 

daily, nontechnical speech, should, in the absence of 

evidence of a contrary intent, be given the meaning which 

they have for laymen in such daily usage, rather than a 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

restrictive meaning which they may have acquired in legal 

usage.

Jamestown Mut. Ins. Co. v. Nationwide Mut. Ins. Co., 266 N.C. 430, 438 (1966).

¶ 111 As reflected in previous quotes of the policy language, each policy essentially 

states:

We will pay on behalf of the insured those sums in excess 

of the “retained limit” which the insured becomes legally 

obligated to pay as damages to which this insurance 

applies because of “bodily injury”, “property damage” or 

“personal and advertising injury”

¶ 112 Stripped down to the relevant portion, it says: We will pay those sums which 

the insured becomes legally obligated to pay as damages to which this insurance 

applies. In other words, if Radiator becomes legally obligated to pay damages for an 

occurrence to which a policy issued by Landmark applies, Landmark will pay those 

sums. Those sums are the damages Radiator becomes legally obligated to pay as 

damages for an occurrence resulting in bodily injury during the policy period.

¶ 113 As correctly recognized by the Court of Appeals, nothing in the policy language 

drafted by the insurers (Landmark, National, or Fireman) modifies the insurer’s 

indemnity obligation to be proportional to their policies’ “time on the risk” when 

damages arise from multiple occurrences and multiple bodily injuries, thus triggering 

multiple policies. Radiator Specialty Co. v. Arrowood Indem. Co., No. COA19-507, 

2020 WL 7039144, at *4 (N.C. Ct. App. Dec. 1, 2020) (Bryant, J. with Chief Judge 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

McGee concurring and Judge Berger concurring in result only); see generally Plastics 

Eng’g Co. v. Liberty Mut. Ins. Co., 2009 WI 13, ¶ 55, 315 Wis. 2d 556, 759 N.W.2d 613

(“[The insurer’s] policy contains no language that limits its obligation to a pro rata 

share.”); Allstate Ins. Co. v. Dana Corp., 759 N.E.2d 1049, 1058 (Ind. 2001) (“[T]here 

is no language in the coverage grant, including the definitions of ‘property damage,’ 

‘personal injury,’ or ‘occurrence,’ that limits [the insurer’s] responsibility to 

indemnification for liability derived solely for that portion of damages taking place 

within the policy period.”).

[T]he very essence of pro rata allocation is that the 

insurance policy language limits indemnification to losses 

and occurrences during the policy period—meaning that no 

two insurance policies, unless containing overlapping or 

concurrent policy periods, would indemnify the same loss 

or occurrence. Pro rata allocation is a legal fiction designed 

to treat continuous and indivisible injuries as distinct in 

each policy period as a result of the “during the policy 

period” limitation, despite the fact that the injuries may 

not actually be capable of being confined to specific time 

periods.

In re Viking Pump, Inc., 52 N.E.3d 1144, 1153–54 (N.Y. 2016), opinion after certified 

question answered, 148 A.3d 633 (Del. 2016).

¶ 114 In these policies, the language “during the policy period,” as previously 

discussed only modifies the defined term “bodily injury.” In other words, 

indemnification is not limited to damages during the policy period or occurrences 

during the policy period. Thus, “[t]he average person purchasing insurance would 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

construe the policy language to provide indemnity for an injury once the policy was 

triggered.” Am. Nat’l Fire Ins. Co. v. B & L Trucking & Constr. Co., 951 P.2d 250, 256 

(Wash. 1998). “[B]odily injury during the policy period is what triggers the policy; the 

definition of ‘bodily injury’ is not a limitation of liability clause.” Plastics Eng’g, ¶ 57. 

There is no exclusion of damages occurring outside the policy period. See generally 

Mazza v. Med. Mut. Ins. Co. of N.C., 311 N.C. 621, 630 (1984) (“We place great 

emphasis on the fact that there is no specific exclusion in the insurance contract for 

punitive damages. If the insurance carrier to this insurance contract intended to 

eliminate coverage for punitive damages it could and should have inserted a single 

provision stating ‘this policy does not include recovery for punitive damages.’ ”).

¶ 115 Further, each of the policies used the plural noun “sums.” “Sum” is defined as 

“[a]n amount obtained as a result of adding numbers,” “[t]he whole amount, quantity, 

or number; an aggregate,” and “[a]n amount of money.” Sum, The American Heritage 

Dictionary (5th ed. 2018); see also Sum, New Oxford American Dictionary (3rd ed. 

2010) (defining “sum” as “a particular amount of money,” “the total amount resulting 

from the addition of two or more numbers, amounts, or items,” “the total amount of 

something that exists,” and “an arithmetical problem, esp. at an elementary level”). 

Given these definitions, the plain meaning of the term “sum” or “sums” alone does 

not contemplate a fractional or proportional share. Simply put, “sums” may entail 

addition—but not addition followed by division. The adjectives qualifying “sums,” 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

“all” and “those,” also confirm a meaning antithetical to fractional or proportional. 

See, e.g., All, The American Heritage Dictionary (5th ed. 2018) (defining the adjective 

“all” as “[b]eing or representing the entire or total number, amount, or quantity” 

among other definitions); That, The American Heritage Dictionary (5th ed. 2018)

(defining the adjective “that,” which in the plural is “those,” as “[b]eing the one singled 

out, implied, or understood”). Thus, applying pro-rata allocation to the policies before 

us requires the Court to ignore the plain language of the term “sums.”

¶ 116 While insurers could draft a proportional limitation, Radiator purchased 

policies with the language previously quoted, and the policy language does not 

contain such a limitation. See Nat’l Indem. Co. v. State, 2021 MT 300, ¶ 78, 406 Mont. 

288, 499 P.3d 516 (“Pro rata allocation is a significant limitation on coverage, but is 

not expressly provided in the Policy, though it clearly could have been.”). Given the 

policy language, if the insurers were “obligated to pay only a pro-rata share of 

[Radiator]’s liability, . . . [Radiator’s] reasonable expectations would be violated.” See

Keene, 667 F.2d at 1047–48.

¶ 117 Additionally, all of the policies at issue extend coverage to “death resulting at 

any time.” Such a provision reflects that the insurer agreed to and knew that it 

indemnified the insured’s liability for death even if death did not occur during the 

policy period. This agreement is contrary to pro rata allocation, which spreads out 

liability for an insured’s damages among multiple policies based on “time on the risk.”
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

¶ 118 Nevertheless, the majority dismisses this as irrelevant because of the Court’s 

holding that benzene exposure causes injury at the time of exposure, rather than a 

continuous injury. Yet, this Court’s erroneous holding in this case as to the first issue 

should not necessitate an outcome on the second issue.

¶ 119 This Court should construe the policy language in accordance with the rules of 

contract interpretation and not read into the policies a pro rata allocation of coverage 

to which the parties did not agree contractually. To do so results in this Court 

redistributing the risk, taking from the insured for the benefit of the insurer and 

taking from some insurers for the benefit of other insurers. After all, insurers have 

the national and international re-insurance markets available to them to restructure 

their risks dynamics and cost-benefit analysis.

C. Landmark’s Duty to Defend

¶ 120 The final issue only involves Landmark’s policies, which in pertinent part 

state:

2. We will have the right and duty to defend any “suit” 

seeking those damages when:

a. The applicable limits of insurance of the “underlying 

insurance” and other insurance have been used up 

in the payment of judgments or settlements; or

b. No other valid and collectible insurance is available 

to the insured for damages covered by this policy.

¶ 121 “Underlying insurance” is a defined term, meaning “the policies or self[-
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

]insurance listed in the Schedule of Underlying Insurance.” It is undisputed that the 

“underlying insurance” for Landmark’s policies do not cover liability for the benzene 

claims. Thus, the applicable limits for the underlying insurance have not been used 

up in the payment of judgments or settlements. Since subparagraph (a) requires 

limits of underlying insurance to be used up to trigger the duty to defend, Landmark 

does not have a duty to defend pursuant to subparagraph (a).

¶ 122 Therefore, subparagraph (b) must be considered. To determine what 

encompasses “[n]o other valid and collectible insurance” as used in subparagraph (b), 

the meaning of “other insurance” as used in subparagraph (a) must be discerned. It 

is not a defined term. “Other insurance” could be interpreted to be insurance policies 

in effect for that policy year other than the “underlying insurance” or insurance 

policies for damages covered by Landmark’s policy other than the “underlying 

insurance.” Because the phrase “other insurance” in subparagraph (a) is not modified 

by the phrase “for damages covered by this policy” (unlike subparagraph (b)), “other 

insurance” is limited to policies in effect for that policy year.

¶ 123 “No other valid and collectible insurance” in subparagraph (b) must therefore 

refer to policies other than those in effect for that policy year.3 Thus, subparagraph 

 

3 “The clause ‘valid and collectible insurance’ has widespread use in the insurance 

industry of the United States and has a well[-]established meaning. Generally, the clause 

refers to insurance which is legally valid and is underwritten by a solvent carrier.” Hellman 

v. Great Am. Ins. Co., 136 Cal. Rptr. 24, 27 (Cal. Ct. App. 1977).
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

(b) requires exhaustion of all policies covering damages also covered by Landmark’s

policy, but exhaustion is only required if such policy is valid and collectible. See AAA 

Disposal Sys., Inc. v. Aetna Cas. & Sur. Co., 821 N.E.2d 1278, 1288–89 (Ill. App. Ct. 

2005) (recognizing that a clause required horizontal exhaustion when any other valid 

and collectible insurance lacked language limiting it to certain policy periods). Thus, 

subparagraph (b) could apply even if the applicable limit of the “underlying 

insurance” or “other insurance” was not used up in the payment of judgments or 

settlements. Because the trial court did not determine whether “[n]o other valid and 

collectible insurance is available to the insured for damages covered by this policy,” 

this Court should remand to the trial court.

III. Conclusion

¶ 124 “[B]ecause the insurance company is the party that selected the words used [in 

the policy],” “[t]his Court resolves any ambiguity in the words of an insurance policy 

against the insurance company.” Harleysville, 364 N.C. at 9. It is not inequitable to 

hold an insurer to the words it selected; the words—the promise of indemnity—is 

what an insured purchased. The majority in this matter, for unclear reasons,

construes language in the policy in favor of the insurers, regardless of the policy 

language. The holding in this case will deter entities and individuals who can selfinsure from purchasing insurance (thus reducing the pool of insurance) and 

apparently requires the insured to sue and litigate with all their insurance providers 
RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO.

2022-NCSC-134

Barringer, J., concurring in part and dissenting in part

to receive the indemnity they purchased (or until forced to declare bankruptcy). 

Therefore, I respectfully concur in part and dissent in part.

Justice HUDSON joins in this concurring in part and dissenting in part

opinion.