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Radiator Specialty Co. v. Arrowood Indem. Co.
Citation: Not availableDocket: 20PA21
Court: Supreme Court of North Carolina; December 15, 2022; North Carolina; State Supreme Court
Original Court Document: View Document
Radiator Specialty Company (RSC), a manufacturer of automotive, hardware, and plumbing products, has faced numerous personal injury lawsuits over the past twenty years related to injuries allegedly caused by benzene exposure from its products. RSC purchased over one hundred product liability policies from twenty-five insurers during this time, with Fireman’s Fund Insurance Company, Landmark American Insurance Company, and National Union Fire Insurance Company of Pittsburgh, PA being the three insurers involved in the current legal action. RSC is seeking compensation from these insurers for liabilities arising from the benzene-related litigation. The case, filed in the North Carolina Supreme Court, follows a Court of Appeals decision that partly reversed and affirmed a prior judgment. The Supreme Court granted discretionary review for certain defendants, with oral arguments heard on August 30, 2022. Various law firms represent the parties involved, including amicus curiae submissions from United Policyholders and insurance industry associations. This case addresses the complexities of insurance liability related to benzene exposure, which differs significantly from traditional personal injury claims due to the extended timeline over which injuries may occur. Unlike discrete incidents such as car accidents, benzene exposure may unfold over years, affecting multiple insurance policy periods and various insurers. Courts have been challenged by 'long-tail' claims, which involve gradual harm and raise questions about policy triggers, liability allocation, and the use of excess insurance. The dispute at hand focuses on determining which insurers are responsible for covering RSC’s benzene-related liabilities under their liability insurance policies. Key legal questions include: (1) whether coverage is activated at the time of benzene exposure or upon observable injury, (2) how to allocate defense and indemnification costs among insurers when multiple policies are involved (all sums vs. pro rata), and (3) the extent of underlying limits RSC must exhaust before accessing excess coverage (vertical vs. horizontal exhaustion). RSC produced benzene-containing products for over forty years and faced numerous personal injury lawsuits in the early 2000s, with claimants alleging that prolonged exposure led to serious health issues, including cancer and death. These long-tail claims resulted in approximately $45 million in defense and settlement costs for RSC, which sought coverage from multiple insurance policies purchased over decades. From 1971 to 2014, RSC acquired over one hundred product liability policies from various insurers, leading to a lawsuit against Fireman’s Fund, Landmark, and National Union for underpayment of claims despite RSC contending it paid over $7.1 million in premiums. The insurers argue that RSC's claims for coverage are unfounded due to various factors, including settlements with other insurers and self-insured retentions, which they assert create gaps in RSC's coverage that they are not liable to fill. On February 6, 2013, RSC initiated a declaratory judgment action under N.C.G.S. 1-253 et seq. to clarify the responsibilities of fifteen defendant-insurers regarding policies sold to RSC from 1971 to 2012. An amended complaint on July 5, 2015, included nine defendant insurers and introduced claims against National Union for bad faith refusal to settle and for unfair or deceptive trade practices. Following various motions for summary judgment by the defendants, Judge W. David Lee issued several orders on January 28 and 29, 2016. The court determined that in long tail bodily injury claims, the exposure trigger applies, defining the policy period from the first to the last exposure to benzene. The court also ruled for pro rata allocation of defense and indemnity costs based on each insurer’s coverage period, rejecting the "all sums" approach, which made RSC responsible for its share of costs during periods of lost, settled, or nonexistent policies. Additionally, the court found that vertical exhaustion applies to Landmark’s duty to indemnify while horizontal exhaustion applies to its duty to defend. Following these rulings, a bench trial in June 2018 established the exposure dates for disputed claims. The trial court's final judgment mandated that insurers must defend and indemnify RSC according to their policy limits and rulings, including pro rata allocation, requiring reimbursement of $1.8 million in past costs. The North Carolina Court of Appeals unanimously affirmed the trial court's judgment in an unpublished opinion on December 1, 2020, confirming the appropriateness of the exposure theory for triggering coverage over the injury-in-fact theory, noting that the policies contained standardized language regarding coverage triggers. The court rejected Radiator Specialty Co. (RSC)’s argument that the case of Gaston County Dyeing Machine Co. v. Northfield Insurance Co. established an injury-in-fact trigger applicable to all standard-form policies. Instead, it distinguished Gaston, which involved a specific event causing property damage, noting that such a trigger was based on the premise that an injury-in-fact occurs on a specific date, with subsequent damages stemming from that event. The court recognized the complexity of ascribing a “date certain” to injuries from asbestos and benzene exposure, concluding that these injuries are not discrete. It affirmed the trial court's application of an exposure theory of coverage, interpreting "bodily injury" to include exposure as an "occurrence." The Court of Appeals found that the trial court erred in applying a pro rata allocation of liability instead of an "all sums" allocation in an intermediate order but deemed this error moot due to the final judgment. The court emphasized that the policies clearly required insurers to defend and indemnify claims under their respective policies, and prorating damages could unfairly shift costs among parties. The final judgment corrected this by assigning costs based on contractual obligations, requiring each insurer to defend and indemnify the plaintiff according to policy limits, thus enforcing an all sums allocation. Lastly, the Court of Appeals upheld the trial court's application of horizontal exhaustion regarding Landmark's duty to defend, interpreting Landmark's policy to require that it only provides coverage when all other valid and collectible insurance has been exhausted. The court agreed that the language in the policy indicated it was an excess policy that activates under such conditions. The Court of Appeals dismissed RSC's challenge to the trial court’s intermediate order regarding the defendant-insurers' ability to deny coverage, as the final judgment confirmed that the insurers had both a duty to defend and a duty to indemnify RSC. The trial court also dismissed one insurer's challenge related to a summary judgment on cessation of coverage under its policy. On August 10, 2021, the Court allowed RSC's and Fireman’s Fund’s petitions for discretionary review, along with Landmark and National Union's conditional petition. National Union issued six annual insurance policies to RSC from November 27, 1987, to May 1, 1992, with five providing primary liability coverage and one offering excess coverage. The primary policies (1987-1990) included terms stating coverage for damages related to bodily injury during the policy period, contingent on the injury being caused by an occurrence within the coverage territory. The policies effective from May 1990 to May 1992 retained similar coverage terms while clarifying the definition of 'bodily injury' and 'occurrence.' Fireman’s Fund provided three excess liability insurance policies during distinct periods from December 10, 1976, to May 1, 1980, each incorporating terms from certain underlying primary liability policies. The excess policies agreed to indemnify RSC for all sums it was legally obligated to pay due to liability for personal injuries and property damage caused by occurrences anywhere in the world, subject to defined limitations and conditions. 'Personal Injuries' are defined as bodily injury, which includes sickness, disease, disability, and death resulting from these injuries. An 'Occurrence' pertains to an accident or event, including continuous exposure to harmful conditions, that unintentionally causes personal injury or property damage during the policy period. Multiple exposures to similar conditions at one location are treated as a single occurrence. The policy's insuring agreements provide coverage for the ultimate net loss exceeding a specified underlying limit, which the insured is legally obligated to pay due to liability imposed by law or contractual agreements. Coverage includes: - **Personal Injury Liability**: Damages for personal injuries, including death. - **Property Damage Liability**: Damages for injury to or destruction of tangible property, including consequential losses. The policy is applicable worldwide for occurrences resulting in personal injury or property damage during the policy period. Both personal injury and property damage claims resulting from the same exposure are deemed connected to one occurrence. Landmark issued umbrella/excess liability policies to RSC, effective from October 8, 2003, to May 1, 2014, containing similar provisions, particularly covering 'bodily injury' liability. The coverage applies if the bodily injury is caused by an occurrence and occurs within the policy period. Summary judgment is subject to de novo review, as established in *In re Will of Jones*. It is appropriate when no genuine issue of material fact exists, and the moving party is entitled to judgment as a matter of law, per N.C.G.S. 1A-1, Rule 56(c). The interpretation of insurance contracts is a legal issue. The central dispute pertains to the triggering of coverage under various insurance policies concerning claims related to benzene exposure. All policies define "bodily injury" as injuries sustained by a person due to an "occurrence," which includes exposure. The Court must determine at what point the benzene claimants experienced bodily injury sufficient to activate coverage. Landmark and National Union assert that coverage is triggered by the claimant's actual exposure to benzene. Conversely, Fireman’s Fund and RSC argue that coverage does not begin until a cognizable injury occurs. The trial court and Court of Appeals agreed with the former view, stating that exposure is the appropriate reference point for determining coverage. Fireman’s Fund advocates for an "injury-in-fact" trigger, arguing that its policies only provide coverage for actual injuries occurring during the policy period. They contend that benzene exposure alone does not constitute an injury-causing event. They reference *Gaston County Dyeing Machine Co. v. Northfield Insurance Co.*, which ruled that coverage for property damage was triggered by an injury-in-fact. Fireman’s Fund analogizes that, similar to the property damage case, actual injuries (such as cancers from benzene exposure) must occur before claims can be made against RSC. They argue that until a malignancy develops, no injury exists, thus delaying the trigger for coverage. Fireman’s Fund asserts that the injury-in-fact approach is widely accepted and applicable to progressive disease claims, allowing for multiple policy periods to be triggered. It cites several cases, including Dow Chemical Co. v. Associated Indem. Corp. and Stonewall Ins. Co. v. Asbestos Claims Mgmt. Corp., to support its position that coverage is determined by identifying when personal injuries occurred with reasonable medical certainty. Fireman’s Fund contends that benzene exposure results in identifiable injuries over time, from the onset of malignancy to diagnosis or death. RSC argues that a policy's coverage is triggered when a claimant suffers bodily injury, sickness, disease, or death within the policy period, claiming the lower courts erred by limiting coverage to periods of benzene exposure. RSC highlights a factual dispute regarding the application of the injury-in-fact trigger, noting conflicting medical expert testimonies that have not been resolved and requests a remand to allow the trial court to determine the specifics of injury timing. In contrast, Landmark and National Union maintain that coverage for benzene exposure should be triggered only during the exposure period, asserting that bodily injury occurs solely during exposure. They argue that the lower courts correctly held that coverage is tied to the exposure timeline and emphasize that equating bodily injury with malignancy or illness misinterprets coverage definitions. They reference the case Imperial Casualty Indemnity Co. v. Radiator Specialty Co. to bolster their argument. The court rejected the manifestation trigger theory for progressive bodily injury, opting instead for the exposure trigger theory, which posits that exposure to a harmful substance during the policy period leads to immediate but undetectable harm that results in disease or impairment later. National Union and Landmark support this view, noting that benzene exposure causes actual injuries shortly after exposure, while the effects may take longer to manifest. Fireman’s Fund argues that the injury-in-fact trigger established in Gaston makes Imperial Casualty irrelevant, but National Union contends that Gaston addresses property damage based on a specific date and does not apply to progressive bodily injury from long-term benzene exposure. Landmark agrees, emphasizing that Gaston did not adopt an injury-in-fact trigger for bodily injuries. National Union opposes Fireman’s Fund’s proposed continuous trigger theory, which would extend coverage from the time of exposure until diagnosis or death, arguing that benzene behaves differently than asbestos, as it does not remain in the body and causes injury only during exposure. The policies clearly require coverage for claims of personal or bodily injury occurring within the policy period, without necessitating a diagnosable condition for coverage to be triggered. Benzene exposure is recognized as causing bodily injury, with cancer being a manifestation of this injury rather than the injury itself. For a compensable claim to exist, exposure must result in damages; mere exposure without consequences does not constitute harm. The reasoning from Imperial Casualty underscores that cumulative disease cases differ from ordinary situations, as triggering coverage upon disease manifestation could render manufacturer insurance illusory. If coverage is only activated upon the development of a disease, policyholders may find themselves without coverage after a policy expires, despite having been exposed during the coverage period. The Gaston case does not override this reasoning; it distinguished between 'injury-in-fact' and 'date-of-discovery' triggers, affirming that damage occurs at a specific event. It states that only policies active at the time of the injury-causing event are triggered, and exposure to substances that alter DNA qualifies as an 'injury-in-fact.' Fireman’s Fund's argument for continuous coverage throughout the development of cancer is rejected, as it contradicts the finding that coverage in benzene cases is triggered solely by exposure. National Union and Landmark have established that an injury from benzene exposure occurs at the time of exposure, rejecting a continuous trigger approach that would mischaracterize the injury by treating the consequences (e.g., cancer) as the injury itself. The court must allocate RSC’s benzene liabilities among multiple insurers, given that benzene-related injuries can arise from various exposures over time, implicating numerous insurance policies. The "time on the risk" concept defines the period during which a policy’s coverage applies, and under a pro rata allocation method, each triggered policy contributes to damages in proportion to its duration of coverage. Conversely, an all sums approach allows recovery in full from any triggered policy, with the selected insurer pursuing cross-claims against others. The insurers favor pro rata allocation based on policy terms, while RSC supports an all sums approach. Although the trial court initially applied pro rata allocation, the Court of Appeals determined that all sums allocation was warranted. Despite acknowledging the trial court's error, the Court of Appeals deemed it moot due to the final judgment specifying that allocation would follow the contractual limitations in the policies. RSC argues that the Court of Appeals correctly concluded that the policy language necessitates all sums allocation but failed to apply this correctly to the trial court's Final Judgment. RSC contends that the final judgment, interpreted by the trial court, incorporated a pro rata allocation, and seeks correction to ensure proper payment from the insurers. The Court of Appeals required the all sums allocation method for insurance policies, which the insurers contest. They argue that if the Supreme Court reverses the mootness determination by the Court of Appeals, it should also reject the endorsement of all sums allocation, asserting it conflicts with the terms of the National Union policies, is inequitable, and violates public policy. RSC asserts the Court of Appeals misinterpreted the trial court’s judgment, which should mandate pro rata allocation of costs. The insurers maintain that the contracts explicitly indicate pro rata allocation, citing National Union's policy language that specifies payment for "those sums" that RSC is legally obligated to pay for bodily injury occurring within the policy period. National Union argues that the term "those sums" suggests a limitation to the insurer's liability for damages specifically arising during the policy period, contrasting with all sums allocation, which could extend liability beyond this period. This interpretation is supported by multiple jurisdictions that recognize the distinct legal meaning of "those sums" in insurance agreements. National Union emphasizes that pro rata allocation aligns with the contract's intent and respects the "during the policy period" language, which all sums allocation disregards, thus conflicting with fundamental principles of contract law in North Carolina. Fireman’s Fund contends that pro rata allocation is mandated by policy language that limits personal injury coverage to incidents occurring during the policy period. This approach aligns with the nature of occurrence-based insurance policies, which restrict insurer liability to injuries that arise within specified timeframes. Fireman’s Fund argues that this limitation is integral to the policies, ensuring that insurers only bear risks associated with incidents occurring while coverage is active. The insurer asserts that adopting a pro rata allocation honors the contractual agreement by covering only injuries occurring during the policy periods rather than all injuries regardless of when they happened. Fireman’s Fund highlights a trend favoring pro rata allocation, citing cases that support this interpretation and maintain that it reflects the insured's choices regarding coverage limits. Furthermore, Fireman’s Fund argues for the fairness of pro rata allocation, suggesting that an all sums approach could result in inequitable outcomes, such as policyholders who purchased insurance for a single year receiving the same benefits as those who maintained continuous coverage over a decade. Landmark Insurance supports Fireman’s Fund's position, stating that its policies require pro rata allocation as well, as they lack explicit "all sums" language and only cover amounts exceeding a specified retained limit. RSC contends that the insurance policies mandate a triggered insurer to indemnify it for "all sums" or "those sums" it is legally obligated to pay, dismissing any interpretation of prorated compensation. RSC supports its position by citing legal precedents that interpret "all sums" as a full obligation for damages incurred. It argues that the policies' definitions of "occurrence" and the stipulation for insurers to cover damages from ongoing harm indicate the insurers' acknowledgment of liability beyond the policy period. RSC also points to policy language regarding continuing coverage and prior insurance provisions as evidence against pro rata allocation, asserting that these provisions imply multiple policies may cover a single loss and that liability can arise outside the policy term. Furthermore, RSC highlights the lack of any express pro rata limitation in the policies, arguing that this omission is significant given the historical contention surrounding the allocation methods. RSC refutes the insurers' arguments for pro rata allocation, asserting that the phrase "during the policy period" merely indicates when coverage is triggered and that "those sums" does not inherently imply a prorated approach. RSC also argues that the insurers misinterpret legal precedents by ignoring established cases favoring the all sums method and that appeals to equity are irrelevant as contractual language prevails in this context, with equity favoring RSC regardless. Under an all sums allocation method, RSC asserts that no insurer is required to pay more than its policy limit, with primary insurers only responding after RSC meets its deductible or retention, and excess insurers only after the underlying policy limits are fully exhausted. RSC remains liable for its decision not to secure adequate insurance for any year. Insurers covering costs based on RSC's chosen policy may seek contributions from other insurers active at the time of the injury. Insurance policies are contracts that define the rights and duties of the parties involved. The appropriateness of an all sums allocation hinges on the policy language explicitly permitting such an approach. Specific language indicating that an insurer will cover “all sums” must be included in the policy to justify this allocation method. The dissent challenges the assertion that policies must contain "all sums" terminology to impose complete indemnity obligations, yet no cases have been cited where courts applied all sums allocation without such language. RSC argues that the relevant policies contain equivalent language committing to cover “all sums” related to certain liabilities; however, the insurers counter with policy language that limits coverage to injuries occurring within the respective policy periods. Fireman’s Fund's insurance policies, while varying slightly in language, consistently specify that coverage applies only to events occurring "during the policy period." The primary policies from 1990 to 1992 explicitly state coverage for "bodily injury" is contingent upon the injury occurring within this timeframe. Legal precedent indicates that when policies contain limiting language such as "during the policy period," courts typically apply a pro rata allocation of coverage, even in instances where policies reference payment for "all sums" owed by the insured. This principle was affirmed in cases like Rossello, where the Maryland Court of Appeals ruled that despite broad language, pro rata allocation was consistent with the policy's terms. The distinction in definitions of "bodily injury" in the Rossello case compared to Fireman’s Fund's policies—which specify coverage for bodily or personal injuries resulting from occurrences within the policy period—does not alter the interpretation. The nature of exposure to benzene as an "occurrence" implies that coverage will only be provided for incidents occurring during the specified period. Therefore, Fireman’s Fund is obligated to indemnify RSC solely for occurrences that transpire within the policy period, despite any language suggesting coverage for "all sums." Personal or bodily injury coverage is constrained by policy language specifying that coverage applies only to incidents occurring during the policy period, establishing that the insurer's obligations are limited. In the case of RADIATOR SPECIALTY CO. V. ARROWOOD INDEM. CO., the court clarified that insurers are not liable for all sums related to benzene exposure outside of the defined policy periods. The phrase “during the policy period” restricts the scope of coverage, dictating the damages attributable to each policy based on when the injury occurred. While some courts have historically applied an "all sums" approach despite the presence of limiting language, such interpretations are increasingly seen as outdated. For example, the North Carolina Business Court in Duke Energy Carolinas, LLC v. AG Ins. SA/NV maintained that non-cumulation provisions could necessitate broader coverage interpretations, obligating insurers to cover all sums for damages incurred, even if they extend beyond the initial policy period. This aligns with decisions from jurisdictions that similarly recognize the role of non-cumulation and continuing coverage provisions in determining coverage applicability, as seen in In re Viking Pump, where the New York Court of Appeals supported the "all sums" allocation approach due to such provisions. The court determined that the use of pro rata allocation in certain contracts would conflict with the non-cumulation clauses, which allow for multiple insurance policies to cover the same loss or occurrence. This case is distinct from Duke Energy and In re Viking Pump, as benzene exposure results in injury at the time of exposure, unlike the continuous injury seen with asbestos. National Union's policies lack non-cumulation provisions, making the reasoning from the other cases irrelevant. Radiator Specialty Co. (RSC) argues that Fireman’s Fund’s and Landmark’s policies contain non-cumulation and continuous coverage provisions. However, upon review, the court found no indication that these insurers intended to be liable for all sums arising from liabilities during any policy period. RSC claims that Fireman’s Fund’s umbrella policies align with the underlying policies, which contain non-cumulation provisions, but the court noted that the excess policies do not incorporate these underlying provisions related to liability limits. The court referenced case law indicating that follow form provisions in excess policies typically do not include underlying terms regarding monetary limits. RSC identified two non-cumulation provisions it believes are part of Fireman’s Fund’s excess policies, which suggest limits on liability in relation to prior insurance coverage. Umbrella policies generally align with underlying policies except for the non-cumulation provision, which the umbrella policy explicitly excludes regarding the limits of liability. Consequently, non-cumulation provisions are not applicable to the umbrella policies at the outset. RSC misinterprets the non-cumulation provisions, which are intended for scenarios involving multiple policies covering the same loss, rather than losses occurring outside the policy period. RSC's interpretation of "continuing coverage" in Landmark's policies is also incorrect; the relevant language addresses ongoing injuries and does not imply that Landmark accepts liability for all past policy periods. The provision merely states that the policy active at the time of injury covers any subsequent damages. As a result, the non-cumulation and continuing coverage provisions do not oppose pro rata allocation in this case. Regarding exhaustion, the document addresses whether horizontal or vertical exhaustion applies to Landmark's duty to defend RSC under the umbrella policies. While an insurer's obligation to indemnify derives from policy language, the duty to defend—central to this appeal—relies on available policies. The trial court and Court of Appeals affirmed that only horizontal exhaustion, requiring the exhaustion of all primary policies across different periods, triggers Landmark's duty to defend RSC. In contrast, vertical exhaustion permits access to excess coverage once primary policies from the same period are exhausted. The trial court implemented a mixed approach regarding Landmark’s obligations, applying horizontal exhaustion to its duty to defend and vertical exhaustion to its duty to indemnify. Specifically, the court ruled that Landmark’s duty to defend arises only after all other insurance policies have been exhausted. The Court of Appeals affirmed this decision, emphasizing that Landmark's duty to defend is triggered by horizontal exhaustion. The relevant contractual provision stipulates that Landmark has the right and duty to defend any suit for covered damages when either the limits of underlying and other insurance have been exhausted or no valid, collectible insurance is available for the insured. Landmark contends that Sections 2(a) and 2(b) should be read together to imply that its duty to defend arises only after RSC's primary policies are fully exhausted and no valid, solvent policy remains available for the Benzene Action. Landmark interprets "underlying insurance" to refer to policies listed in the Schedule of Underlying Insurance, whereas "other insurance" is viewed as any unexhausted policies held by RSC, including those outside the policy year, reflecting a horizontal exhaustion rationale. Conversely, RSC argues for a vertical exhaustion interpretation, asserting that Section 2(b) should be considered independently, making Landmark’s policies the sole available insurance for Benzene Claims during the relevant policy periods, thus triggering its duty to defend. RSC maintains that the trial court correctly applied vertical exhaustion for indemnity but erred by applying horizontal exhaustion for defense. RSC also points out that horizontal exhaustion has been largely rejected by courts and argues that it is inappropriate in this context as Landmark functions as a primary insurer, emphasizing that the underlying primary policies included exclusions that barred coverage for benzene-related claims. RSC argues against the applicability of horizontal exhaustion, asserting that Landmark's umbrella policies provide primary coverage due to the absence of benzene coverage in underlying policies. RSC claims that the phrase “any other insurance” in Landmark’s policies requires exhausting primary policies in prior and subsequent years, which contradicts North Carolina law that interprets “other insurance” as referring only to concurrent coverage within the same policy period. RSC distinguishes relevant cases, asserting they involve vertical exhaustion scenarios rather than the horizontal exhaustion it contends should apply. RSC cites a leading insurance treatise defining “other insurance” as pertaining solely to concurrent policies insuring the same risk during the same period. Additionally, RSC argues that requiring horizontal exhaustion would raise the operative attachment point for excess policies, complicate application, and burden insureds in proving coverage eligibility. In contrast, Landmark asserts that the lower courts correctly ruled for horizontal exhaustion before its duty to defend arises. Landmark contends RSC's reliance on vertical exhaustion contradicts the policy language and highlights prior cases that upheld umbrella policy provisions requiring exhaustion of both scheduled and unscheduled primary policies. Landmark references cases like Reliance Insurance Co. v. Lexington Insurance Co. and Harleysville Mutual Insurance Co. v. Zurich-American Insurance Co., arguing they necessitate exhaustion of all primary policies before an umbrella policy responds. Landmark refutes RSC's claim that its umbrella policy functions as primary coverage by emphasizing that such an argument overlooks the policy language. Landmark asserts that the exclusion of benzene claims from the scheduled underlying policies does not affect its obligation to provide coverage, emphasizing that both scheduled and unscheduled primary policies must be exhausted before its attachment point is reached. The court agrees with the interpretation that the agreement between Landmark and RSC necessitates vertical exhaustion. Landmark’s argument fails to consider the disjunctive "or" used in the contract, which implies that the conditions for triggering its duty to defend are alternatives, not cumulative. Specifically, Landmark's duty to defend is activated if no valid and collectible insurance is available to RSC for damages covered by its policy. RSC claims that its underlying policies do not cover benzene actions, making the Landmark policies the only valid coverage available. The court references a New York case clarifying that "other insurance" clauses address concurrent policies and do not pertain to whether any coverage exists among higher-level policies in effect during different years. This interpretation aligns with North Carolina court decisions regarding "other insurance" clauses, confirming they apply only when coverage is concurrent. Policy periods did not overlap, rendering "other insurance" clauses inapplicable, as established in City of Greensboro v. Rsrv. Ins. Co. and Plastics Eng’g Co. v. Liberty Mut. Ins. Co. Such clauses only apply when policies provide overlapping coverage. RSC is not pursuing multiple recoveries under concurrent policies for the same loss; therefore, the "other insurance" clause is irrelevant. Landmark’s duty to indemnify is not subject to horizontal exhaustion, meaning its excess policies are activated upon vertical exhaustion—when no other valid policy is available during a concurrent policy period for a benzene action. The court affirmed in part and reversed in part the Court of Appeals’ decision, agreeing with the trial court's exposure-based approach for triggering coverage, but reversing the finding that allocation was moot. The trial court’s application of pro rata allocation was upheld. Additionally, the court reversed the Court of Appeals’ decision regarding horizontal exhaustion concerning Landmark’s duty to defend, asserting it is instead triggered by vertical exhaustion. The case is remanded for the trial court to apply vertical exhaustion and continue proceedings accordingly. Justice Barringer concurred in part and dissented in part, emphasizing the need for insurance policy construction to favor the insured and criticizing the majority for misinterpreting the policies' limiting language. None of the insurance policies in question require that the occurrence or the damages take place within the policy period; the phrase “during the policy period” specifically modifies the terms “Bodily injury” and “Personal injury.” Ruling without a thorough analysis of the policy language would undermine the court's responsibilities, as highlighted in the case of Radiator Specialty Co. v. Arrowood Indemnity Co. Radiator Specialty Company has been engaged in litigation for nearly a decade to compel insurers to fulfill coverage obligations. Radiator purchased standard-form product liability policies from multiple insurers, including Fireman’s Fund, Landmark American, and National Union. In 1994, claims arose nationwide alleging that exposure to Radiator's products led to cancer. In 2013, Radiator initiated a lawsuit seeking clarification on the duties of its insurers regarding fifty-five policies, claiming defense and indemnity costs related to products liability for benzene exposure were not covered. Subsequent summary judgment motions addressed insurance contract interpretations, leading to a bench trial in 2018. The trial court ruled on the relevant dates for exposure to benzene-containing products to determine the duty to indemnify. The trial culminated in a final judgment, with some parties appealing earlier summary judgments. The policies from Landmark specify that they will cover damages for bodily injury and property damage caused by occurrences that take place during the policy period. Definitions of “bodily injury” and “occurrence” are also provided, emphasizing the scope of coverage under the policies. The insurance policy covers damages for "bodily injury" or "property damage" resulting from the "products-completed operations hazard" that the insured is legally obligated to pay, with no additional obligations unless specified under SUPPLEMENTARY PAYMENTS. Coverage applies only to incidents occurring within the policy period and must result from an "occurrence," defined as an accident or repeated exposure to harmful conditions within the "coverage territory." Damages for "bodily injury" can include claims for care, loss of services, or death related to the injury. Definitions provided clarify that "bodily injury" encompasses sickness, disease, and associated deaths, while "occurrence" refers to unexpected or unintentional events resulting in personal injury, property damage, or advertising liability. The policy is structured as a "follow form," referencing the underlying insurance terms, and includes liability for personal injuries and property damage occurring globally. Personal injuries are broadly defined, covering various forms of harm, mental anguish, and defamation, with specific exclusions for advertising-related claims. All similar exposures from one location are classified as a single occurrence for coverage purposes. "Damages" encompasses compensation for death and for care and loss of services due to personal injury. The second policy from Fireman provides coverage for the ultimate net loss exceeding applicable limits, addressing liability imposed by law or contract. It includes personal injury liability for damages sustained by individuals, which covers death resulting from such injuries. Definitions within the policy specify "personal injury" as bodily harm, mental anguish, false arrest, wrongful eviction, defamation, and assault and battery under certain conditions. An "occurrence" is defined as an unexpected accident resulting in personal injury or property damage during the policy period, including continuous exposure to harmful conditions. The third policy mirrors this structure, indemnifying the insured for ultimate net loss related to personal injury caused by occurrences worldwide, with similar definitions for "occurrence" and "personal injury." The limit of the Company’s liability is defined such that all personal injury and property damage resulting from continuous or repeated exposure to similar conditions is treated as arising from one singular occurrence. The term "PERSONAL INJURY" encompasses various forms of harm, including bodily injury, mental anguish, false arrest, and defamation, but excludes advertising-related claims. The analysis regarding coverage triggers finds that benzene exposure constitutes a "bodily injury" due to DNA alterations occurring at the time of exposure. Evidence supports that individuals who later developed benzene-related diseases experienced "bodily injury" upon exposure. The policy defines "Bodily injury" to include sickness or disease resulting from an occurrence, thus allowing multiple policies to be triggered by the same occurrence—here, benzene exposure. Despite some policies containing limiting language about continuous exposure, there is no provision preventing the triggering of coverage based on subsequent sickness or disease linked to initial exposure. The court emphasizes that ambiguities in policy language should be resolved against the insurer. The majority's conclusion that a continuous trigger contradicts the timing of injury is criticized for neglecting the specific policy language that governs indemnity triggers. The policy language allows for multiple triggers of coverage. The court reviews summary judgment orders de novo, assessing policy language and evidence to identify genuine issues of material fact and determine legal entitlement to judgment. In this case, there is no dispute that bodily injury results from benzene exposure. Regarding indemnity obligations, the majority opinion misapplies construction rules for insurance policies, erroneously presuming in favor of insurers and suggesting that "all sums" terminology is necessary for complete indemnity. However, the referenced cases indicate that the absence of limiting language permits full liability for insurers once coverage is triggered. The policies in question do not contain provisions reducing liability based on partial injuries during a policy period and are designed to cover "all sums" for damages resulting from qualifying occurrences. Consequently, the "all sums" allocation method is affirmed as appropriate. Courts generally agree that without a pro rata clause, insurers cannot limit their obligations to a share of liabilities. The court emphasizes adherence to policy language and the interpretation that a reasonable insured would understand, favoring common meanings of words over legal definitions. Each policy commits to covering sums exceeding a "retained limit" for damages related to bodily or property injury. Landmark's insurance policy states it will cover damages the insured, Radiator, is legally obligated to pay for occurrences resulting in bodily injury during the policy period. The Court of Appeals highlighted that the policy does not limit the insurer's indemnity obligation based on proportionality or time on the risk when multiple policies are triggered by multiple occurrences. Notably, the policy lacks any language restricting indemnification to losses occurring solely within the policy period, and the term "bodily injury" only modifies the defined term and does not restrict the insurer's liability. The average insured would interpret the policy as providing coverage for injuries once the policy is activated, regardless of when the damages occur. Additionally, there is no exclusion for punitive damages in the policy, indicating that the insurer could have explicitly stated such a limitation if intended. The use of the plural term "sums" in the policy suggests a total amount payable, reinforcing the notion of comprehensive coverage. The term "sum" is defined in the New Oxford American Dictionary as a specific monetary amount, resulting from the addition of two or more values, and does not imply a fractional or proportional share. The adjectives "all" and "those," as defined by The American Heritage Dictionary, reinforce this interpretation by indicating totality and specificity, respectively. Applying a pro-rata allocation would contradict the plain language of "sums" in the policy, which does not include such a limitation despite insurers having the option to draft it that way. The policies extend coverage to deaths occurring at any time, reflecting the insurer's agreement to cover liability for deaths outside the policy period, opposing the concept of pro-rata allocation, which distributes liability based on time covered. The majority's dismissal of this issue is criticized, as the court's earlier ruling on benzene exposure does not necessitate a specific outcome on this matter. The court should adhere to contract interpretation rules and not impose a pro-rata allocation that the parties did not mutually agree upon, as it would unfairly redistribute risk between the insured and insurers. Finally, the document addresses Landmark's duty to defend under its policies, which stipulate conditions for providing a defense based on the exhaustion of underlying insurance or the unavailability of other valid insurance. Landmark's insurance policies do not cover liability for benzene claims, leading to the conclusion that the limits of the underlying insurance have not been exhausted through judgments or settlements. Consequently, Landmark has no duty to defend under subparagraph (a), which requires exhaustion of underlying insurance limits to trigger the duty to defend. The analysis shifts to subparagraph (b), which addresses the term "other valid and collectible insurance," a phrase not defined within the policy. This term may refer to policies active during the policy year or to other insurance covering damages addressed by Landmark’s policy. Unlike subparagraph (a), which is restricted to policies for the same year, subparagraph (b) allows for exhaustion of different policies covering the same damages, provided those policies are valid and collectible. The trial court did not assess the availability of such "other valid and collectible insurance," warranting a remand for further examination. The opinion emphasizes that ambiguities in insurance policy language should be interpreted against the insurer, affirming that insurers should be held accountable for the terms they select. The majority's interpretation is critiqued for favoring insurers, potentially discouraging the purchase of insurance and necessitating litigation among insured parties for indemnity. Justice Hudson supports this concurring and dissenting opinion.