In Re Viking Pump, Inc. and Warren Pumps, LLC Insurance Appeals , 2016 Del. LEXIS 474 ( 2016 )


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  •                 IN THE SUPREME COURT OF THE STATE OF DELAWARE
    §       No. 518, 2014
    §       No. 523, 2014
    §       No. 525, 2014
    IN RE VIKING PUMP, INC.                         §       No. 528, 2014
    AND WARREN PUMPS, LLC                           §
    INSURANCE APPEALS                               §       CASES BELOW:
    §
    §       Superior Court of the
    §       State of Delaware
    §       Consolidated C. A. No. N10C-06-141
    §
    §       -and-
    §
    §       Court of Chancery of the
    §       State of Delaware
    §       C.A. No. 1465-VCS
    Submitted:     July 13, 2016
    Decided:       September 12, 2016
    Before HOLLAND, VALIHURA, and VAUGHN, Justices; WALLS and RYAN,
    Judges, constituting the Court en Banc.
    Upon appeals from the Superior Court and the Court of Chancery: AFFIRMED in part
    and REVERSED in part.
    David J. Baldwin, Esquire, Jennifer C. Wasson, Esquire, Michael B. Rush, Esquire,
    Potter Anderson & Corroon LLP, Wilmington, Delaware. Of Counsel: Robin L. Cohen,
    Esquire (Argued), Keith McKenna, Esquire, McKool Smith, New York, New York, for
    Appellant Warren Pumps LLC.
    Paul Cottrell, Esquire, Tighe & Cottrell, P.A., Wilmington, Delaware. Of Counsel:
    Laura S. McKay, Esquire, Hinkhouse Williams Walsh LLP, Chicago, Illinois; AND
    Anthony G. Flynn, Esquire, Timothy Jay Houseal, Esquire, Jennifer M. Kinkus, Esquire,
    Young Conaway Stargatt & Taylor LLP, Wilmington, Delaware. Of Counsel: Lynn H.
    Murray, Esquire (Argued), Shook, Hardy & Bacon LLP, Attorneys for The Continental
    Insurance Company as successor by merger to Fidelity & Casualty Company of New
    York.
    
    Sitting by designation pursuant to Del. Const. art. IV § 12.
    Lisa A. Schmidt, Esquire, Travis S. Hunter, Esquire, Richards, Layton & Finger, P.A.,
    Wilmington, Delaware. Of Counsel: Michael P. Foradas, Esquire (Argued), Lisa G.
    Esayian, Esquire, William T. Pruitt, Esquire, Kirkland & Ellis LLP, Chicago, Illinois, for
    Appellant Viking Pump, Inc.
    Kenneth J. Nachbar, Esquire (Argued), Morris, Nichols, Arsht & Tunnell LLP,
    Wilmington, Delaware AND Garrett B. Moritz, Esquire and Nicholas D. Mozal, Esquire,
    Ross Aronstam & Moritz LLP, Wilmington, Delaware. Of Counsel: Tancred Schiavoni,
    Esquire and Gary Svirsky, Esquire, O‘Melveny & Myers LLP, New York, New York;
    AND John D. Balaguer, Esquire, White and Williams LLP, Wilmington, Delaware. Of
    Counsel: Brian G. Fox, Esquire and Lawrence A. Nathanson, Esquire, Siegal & Park,
    Mount Laurel, New Jersey, Attorneys for Defendants TIG Insurance Company, f/k/a
    International Insurance Company, with respect to policies numbered 5220113076 and
    5220282357, and Westchester Fire Insurance Company, with respect to policy numbered
    5220489339, by operation of novation; ACE Property & Casualty Insurance Company
    (f/k/a CIGNA Property & Casualty Insurance Company), as successor-in-interest to
    Central National Insurance Company of Omaha, but only as respects policies issued
    through Cravens, Dargan & Company, Pacific Coast (improperly named as The Central
    National Insurance Company of Omaha); and Century Indemnity Company, as successor
    to CCI Insurance Company, as successor to Insurance Company of North America and
    Century Indemnity Company as successor to CIGNA Specialty Insurance Company (f/k/a
    California Union Insurance Company).
    Paul Cottrell, Esquire, Tighe & Cottrell, P.A., Wilmington, Delaware. Of Counsel:
    Laura S. McKay, Esquire, Hinkhouse Williams Walsh LLP, Chicago, Illinois; AND
    Anthony G. Flynn, Esquire, Timothy Jay Houseal, Esquire, Jennifer M. Kinkus, Esquire,
    Young Conaway Stargatt & Taylor LLP, Wilmington, Delaware, Attorneys for Certain
    Underwriters at Lloyd’s, London and certain London Market Insurance Companies,
    Granite State Insurance Company, Lexington Insurance Company And National Union
    Fire Insurance Company of Pittsburgh, PA.
    Robert J. Katzenstein, Esquire, Smith Katzenstein & Jenkins LLP, Wilmington,
    Delaware. Of Counsel: Christopher R. Carroll, Esquire, Heather E. Simpson, Esquire,
    Carroll McNulty & Kull LLC, Basking Ridge, New Jersey, Attorneys for TIG Insurance
    Company, as successor by merger to International Insurance Company, as successor by
    merger to International Surplus Lines Insurance Company (Policy No. XSI 5217 only).
    Thaddeus J. Weaver, Esquire, Dilworth Paxson LLP, Wilmington, Delaware. Of
    Counsel: Laura S. McKay, Esquire, Douglas M. DeWitt, Esquire, Hinkhouse Williams
    Walsh LLP, Chicago, Illinois; AND Anthony G. Flynn, Esquire, Timothy Jay Houseal,
    Esquire, Jennifer M. Kinkus, Esquire, Young Conaway Stargatt & Taylor LLP,
    Wilmington, Delaware, Attorneys for OneBeacon America Insurance Company as
    successor to Commercial Union Insurance Company, XL Insurance America, Inc., as
    2
    successor to Vanguard Insurance Company, and Republic Insurance Company, n/k/a
    Starr Indemnity & Liability Company.
    James W. Semple, Esquire, Cooch & Taylor P.A., Wilmington, Delaware. Of Counsel:
    Kristin Suga Heres, Esquire, Zelle LLP, Framingham, Massachusetts, Attorneys for
    Defendant Westport Insurance Corporation.
    Robert M. Greenberg, Esquire, Tybout Redfearn & Pell, Wilmington, Delaware. Of
    Counsel: Amy R. Paulus, Esquire, Mark D. Paulson, Esquire and Don R. Sampen,
    Esquire, Clausen Miller P.C., Chicago, Illinois, Attorneys for Old Republic Insurance
    Company.
    Neal J. Levitsky, Esquire, Seth A. Niederman, Esquire, Fox Rothschild LLP,
    Wilmington, Delaware. Of Counsel: Kathleen D. Monnes, Esquire, Joseph K. Scully,
    Esquire and John W. Cerreta, Esquire, Day Pitney LLP, Hartford, Connecticut, Attorneys
    for Defendant, Travelers Casualty and Surety Company f/k/a The Aetna Casualty and
    Surety Company.
    VALIHURA, Justice:
    3
    This is a consolidated appeal in an insurance-coverage dispute from separate
    judgments by the Court of Chancery and the Superior Court.            Viking Pump, Inc.
    (―Viking‖) and Warren Pumps, LLC (―Warren‖) seek to recover under insurance policies
    issued to a third company, Houdaille Industries, Inc. (―Houdaille‖). In the 1980‘s, Viking
    and Warren acquired pump manufacturing businesses from Houdaille.            As a result,
    Viking and Warren have been confronted with potential liability flowing from personal
    injury claims made by plaintiffs alleging damages in connection with asbestos exposure
    claims dating back to when the pump manufacturing businesses were owned by
    Houdaille (the ―Houdaille-Era Claims‖). Each year from 1972 through 1985, Houdaille
    purchased occurrence-based primary and umbrella insurance from Liberty Mutual
    Insurance Company (―Liberty‖). Above the Liberty umbrella layer, Houdaille purchased
    layers of excess insurance. In total, Houdaille purchased 35 excess policies through 20
    different carriers (the ―Excess Policies‖). Houdaille‘s 14-year insurance tower offered
    $17.5 million in primary coverage, $42 million in umbrella coverage, and $427.5 million
    in excess coverage.
    Viking and Warren now seek to fund the liabilities arising from the Houdaille-Era
    Claims using the comprehensive insurance program originally purchased by Houdaille.
    The insurance companies that issued the Excess Policies (the ―Excess Insurers‖) contend
    that Viking and Warren are not entitled to use the Excess Policies to respond to the
    Houdaille-Era Claims. The Excess Insurers also dispute the extent of any coverage
    available, particularly with respect to defense costs.
    4
    I.      FACTUAL AND PROCEDURAL BACKGROUND
    A more detailed history of this litigation can be gleaned from several other
    significant opinions.1
    A.    The Court of Chancery Proceedings
    This litigation first arose in 2005, when Viking brought suit in the Court of
    Chancery claiming that it was the successor to insurance policies that Liberty had issued
    to Houdaille or, in the alternative, seeking partition of the Liberty policy limits. Liberty,
    Viking, and Warren settled that dispute.
    Viking and Warren then filed new complaints in the Court of Chancery against
    more than twenty other insurers that had issued excess policies to Houdaille. The parties
    cross-moved for summary judgment on how to allocate the losses where the underlying
    asbestos injuries potentially trigger coverage against multiple policy periods.2
    With regard to allocation, the Court of Chancery considered the ―pro rata‖ and
    ―all sums‖ approaches and observed that New York law, which governs interpretation of
    the policies, did not impose either approach on all insurance contracts. Rather, New
    York precedent required that the court ―apply traditional principles of insurance contract
    interpretation to the policies at issue and then apply the approach that results from that
    1
    See In re Viking Pump, Inc., 
    52 N.E.3d 1144
     (N.Y. 2016) [hereinafter, ―Viking Pump V, 52
    N.E.3d at __‖]; Viking Pump, Inc. v. Century Indem. Co., 
    2014 WL 1305003
     (Del. Super. Feb.
    28, 2014) [hereinafter, ―Viking Pump IV, 
    2014 WL 1305003
     at __‖]; Viking Pump, Inc. v.
    Century Indem. Co., 
    2013 WL 7098824
     (Del. Super. Oct. 31, 2013) [hereinafter, ―Viking Pump
    III, 
    2013 WL 7098824
     at __‖]; Viking Pump, Inc. v. Century Indem. Co., 
    2 A.3d 76
     (Del. Ch.
    2009) [hereinafter, ―Viking Pump II, 2 A.3d at __‖]; Viking Pump, Inc. v. Liberty Mut. Ins. Co.,
    
    2007 WL 1207107
     (Del. Ch. Apr. 2, 2007) [hereinafter, ―Viking Pump I, 
    2007 WL 1207107
    at __‖].
    2
    Viking Pump II, 
    2 A.3d 76
    .
    5
    interpretative exercise.‖3 Thus, under New York law, the method of allocation depended
    upon the language of the policy,4 and the Court of Chancery held that the Houdaille
    policies ―unambiguously provide for all sums allocation.‖5 In so holding, the Court of
    Chancery distinguished a leading New York case on the issue, Consolidated Edison
    Company of New York, Inc. v. Allstate Insurance Company,6 on the ground that the
    policies in this dispute contain additional provisions—namely, the ―Non-Cumulation‖
    and ―Prior Insurance‖ provisions—that the court viewed as inconsistent with pro rata
    allocation.7
    B.     The Superior Court Proceedings
    Following the Court of Chancery proceedings, the case was transferred to the
    Superior Court on June 11, 2010 to hear and determine several other issues, one of which
    was whether the Excess Policies were subject to vertical or horizontal exhaustion. The
    Superior Court held a three week trial in October and November 2012. The jury verdict
    was predominately in Warren and Viking‘s favor.8                Warren and Viking sought a
    judgment incorporating the verdict, and the defendants sought a judgment
    notwithstanding the verdict.
    3
    Id. at 107-08.
    4
    See Raymond Corp. v. Nat’l Union Fire Ins. Co., 
    5 N.Y.3d 157
    , 162 (N.Y. 2005) (―In
    determining a dispute over insurance coverage, we first look to the language of the policy.‖
    (citations omitted)).
    5
    Viking Pump II, 
    2 A.3d at 119
    .
    6
    
    774 N.E.2d 687
     (N.Y. 2002).
    7
    Viking Pump II, 
    2 A.3d at 118-27
    .
    8
    The Superior Court commented that ―[t]he evidence was substantial and, for the most part,
    supports the jury‘s verdict. . . . But, reading each policy closely and without extrinsic evidence,
    the verdict must be refined to conform to the policies‘ unambiguous meaning.‖ Viking Pump III,
    
    2013 WL 7098824
    , at *16.
    6
    In a post-trial Opinion dated October 31, 2013, on Plaintiffs‘ Motion for Final
    Judgment and Defendants‘ Renewed Motion for Judgment as a Matter of Law, the
    Superior Court held that, as a matter of New York law, Viking and Warren were
    obligated to horizontally exhaust all triggered ―primary and umbrella insurance layers
    before tapping‖ into any of Houdaille‘s excess coverage.9 In a subsequent Opinion dated
    February 28, 2014, the Superior Court clarified that this horizontal-exhaustion
    requirement was limited to the primary and umbrella coverage layers and not the excess
    coverage.10
    On June 9, 2014, the Superior Court entered a Final Judgment Order After Trial.11
    Warren moved to clarify and amend the judgment, which motion the Superior Court
    denied on August 20, 2014. All parties appealed, and this Court heard oral arguments.
    Following oral argument, because resolution of this appeal depended upon significant and
    unsettled questions of New York law that had yet to be answered in the first instance by
    the New York Court of Appeals, this Court advised the parties that it had decided to
    certify two questions to the New York Court of Appeals.
    C.     Certified Questions to the New York Court of Appeals
    This Court certified the following questions to the New York Court of Appeals:
    1.     Under New York law, is the proper method of allocation to be used
    all sums or pro rata when there are non-cumulation and prior
    insurance provisions?
    9
    Id. at *21.
    10
    Viking Pump IV, 
    2014 WL 1305003
    , at *11-12.
    11
    Final Judgment Order After Trial, Viking Pump, Inc. v. Century Indem. Co., No. N10C-06-141
    FSS (Del. Super. June 9, 2014) [hereinafter Final Judgment at JA____], available at JA1862-75.
    7
    2.      Given the Court‘s answer to Question #1, under New York law and
    based on the policy language at issue here, when the underlying
    primary and umbrella insurance in the same policy period has been
    exhausted, does vertical or horizontal exhaustion apply to determine
    when a policyholder may access its excess insurance?12
    In an Opinion, dated May 3, 2016, the New York Court of Appeals answered the
    foregoing certified questions of law.13 The Court held that ―based on the policy language
    and the persuasive authority holding that pro rata allocation is inconsistent with non-
    cumulation and non-cumulation/prior insurance provisions, we hold that all sums
    allocation is appropriate in policies containing such provisions, like the ones at issue
    here.‖14 The New York Court of Appeals also concluded that the Excess Policies ―are
    triggered by vertical exhaustion of the underlying available coverage within the same
    policy period.‖15
    D.      The Litigation Resumes in Delaware
    12
    In re Viking Pump, Inc., 
    2015 WL 3618924
    , at *3 (Del. June 10, 2015).
    13
    See Viking Pump V, 
    52 N.E.3d 1144
    .
    14
    
    Id. at 1156
    . The New York Court of Appeals determined that ―[t]he policy language at issue
    here, by inclusion of the non-cumulation clauses and the two-part non-cumulation and prior
    insurance provisions, is substantively distinguishable from the language‖ at issue in
    Consolidated Edison. 
    Id. at 1152
    . In fact, the Court found that ―the excess policies before us
    here present the very type of language that [the Court] signaled might compel all sums allocation
    in Consolidated Edison.‖ 
    Id.
     Contemplating ―whether the presence of a non-cumulation clause
    or a non-cumulation and prior insurance provision mandates all sums allocation‖ (Id. at 1152),
    the New York Court of Appeals concluded ―that it would be inconsistent with the language of
    the non-cumulation clauses to use pro rata allocation here.‖ 
    Id. at 1153
    .
    15
    
    Id.
     at 1157-58 (citing United States Fid. & Guar. Co. v. Am. Re-Ins. Co., 
    985 N.E.2d 876
    , 888
    (N.Y. 2013)) (citation omitted). The Court reasoned that ―[a]ll of the excess policies at issue
    primarily hinge their attachment on the exhaustion of underlying policies that cover the same
    policy period as the overlying excess policy, and that are specifically identified by either name,
    policy number, or policy limit.‖ 
    Id. at 1156
    . It also observed that ―vertical exhaustion is
    conceptually consistent with an all sums allocation, permitting the [i]nsured to seek coverage
    through the layers of insurance available for a specific year.‖ 
    Id.
    8
    With these critical questions helpfully answered by our sister Court, this Court, by
    letter, dated May 11, 2016, ordered the parties to file a stipulation of remaining legal
    issues. On June 3, 2016, the parties filed a Joint Stipulation Setting Forth Remaining
    Legal Issues on Appeal (the ―Joint Stipulation‖). The Joint Stipulation identified five
    principal issues to be resolved by this Court:
    (i)     Whether the Court of Chancery erred in ruling that Warren and
    Viking obtained valid assignments of insurance rights;
    (ii)    Whether the Superior Court erred in ruling that the aggregate
    product liability limits of the 1980-1985 Liberty Mutual Insurance
    Company primary insurance policies are exhausted;
    (iii)   Whether the Superior Court erred in ruling that 33 of the 34 excess
    policies that are at issue in this case provide coverage for Warren
    and Viking‘s costs of defending the underlying asbestos claims;
    (iv)    Whether the Superior Court erred in ruling that defense cost
    payments under sixteen of the excess policies at issue in this case
    count toward the reduction of the policy limits of liability; and
    (v)     Whether the Superior Court erred in holding that only those policies
    in place during a claimant‘s significant exposure to asbestos were
    triggered.
    We address each of the issues below, combining the discussion of the third and
    fourth issues on defense costs to avoid repetition.
    II.    ANALYSIS
    A. The Court of Chancery Correctly Held That There Were Valid Assignments
    1.     Contentions of the Parties
    On appeal, Travelers Casualty and Surety Company (―Travelers‖) advances two
    principal arguments to support its claim that the Court of Chancery erred in concluding
    9
    that Houdaille had validly assigned the insurance coverage rights under the Excess
    Policies to Viking and Warren.16        First, Travelers contends that the assignments to
    Viking and Warren are invalid because the Excess Insurers did not consent to the
    assignments. Second, it asserts that certain transaction agreements failed to effect any
    assignment of the Excess Policies to Viking or Warren.
    Viking and Warren both argue that the Court of Chancery properly held that they
    maintain the rights of an insured under the Excess Policies. That is, both urge that
    Houdaille validly assigned the insurance coverage rights under the Excess Policies to
    them. We agree and affirm the decision of the Court of Chancery.
    2.        Standard of Review
    We review a trial court‘s grant of summary judgment de novo.17 We also review
    questions of contract interpretation de novo.18
    3.        Discussion
    i.      Houdaille Validly Assigned Coverage Under the Excess Policies to Warren
    Houdaille was an industrial conglomerate that dissolved in 1989.          During its
    existence, it operated a variety of distinct businesses, either as unincorporated divisions
    or through wholly-owned subsidiaries.           Both Warren and Viking were initially
    independent companies that were acquired by Houdaille. In 1985, Houdaille divested
    16
    In a footnote, the Excess Insurers join the arguments raised by Travelers with respect to the
    validity of the assignment of insurance coverage rights under the Excess Policies. See Excess
    Insurers‘ Op. Br. 49 n.16.
    17
    Moses v. Drake, 
    109 A.3d 562
    , 565 (Del. 2015) (citation omitted).
    18
    Salamone v. Gorman, 
    106 A.3d 354
    , 367 (Del. 2014).
    10
    itself of all of its assets, including both the Warren Pumps and Viking Pump businesses.19
    The Viking Pump unit operated as a division within Houdaille until 1985. The Warren
    Pumps unit was originally acquired in 1972 through a stock purchase transaction and
    later merged into Houdaille. From that point until December 1984, Warren Pumps
    operated as an unincorporated division within Houdaille.
    In December 1984, Houdaille transferred the Warren Pumps business to a wholly-
    owned subsidiary, Warren Pumps-Houdaille, Inc. (―WPH‖).                Shortly thereafter, a
    management group proposed to purchase the Warren Pumps business. Houdaille and
    WPH agreed to sell the Warren Pumps business to Warren.20 Houdaille, WPH, and
    Warren entered into the 1985 Asset Sale Agreement by which Warren acquired the
    Warren Pumps business (the ―Warren ASA‖). Through the Warren ASA, Warren agreed
    to be liable for all of the as-yet-unasserted Houdaille-Era Claims arising out of the
    Warren Pumps business. The Warren ASA provided:
    2.10 Insurance. . . . [A]s of the commencement of business on the day of
    the Closing and thereafter, [Warren] agrees that [Warren] shall be
    responsible and liable for all workers‘ compensation claims, general
    liability (including, without limitation, product liability) claims and
    automotive liability claims on a claims made basis for which [WPH]
    directly or through any [p]redecessor is responsible [other than certain
    claims that are asserted prior to the Warren ASA‘s closing.]21
    19
    At relevant times, Warren Pumps and Viking Pump were operated through various legal
    entities. For ease of reference, we use the generic labels ―Warren Pumps‖ and ―Viking Pump‖ to
    refer the actual businesses.
    20
    At the time, Warren was a corporation, W.P., Inc. Accordingly, Warren‘s predecessor
    corporation was a party to the asset sale transaction.
    21
    App‘x to Travelers Op. Br. 791-92 [hereinafter ―TA___‖].
    11
    The Warren ASA, as initially drafted, did not grant Warren rights to Houdaille‘s or
    WPH‘s insurance coverage. However, as a condition to closing, Warren was obligated to
    obtain $25 million in claims-made insurance.
    Warren was unable to obtain the coverage required by the Warren ASA in advance
    of closing. On August 30, 1985, Warren, WPH, and Houdaille amended the Warren
    ASA (the ―Warren ASA Amendment‖) in order to afford Warren the right to access the
    insurance coverage related to the Houdaille-Era Claims. The Warren ASA Amendment
    provided that Warren need only obtain $1 million in general liability insurance. The
    Amendment further provided:
    [Warren], [WPH] and Houdaille acknowledge that [WPH] and Houdaille
    have permitted [Warren] to utilize the insurance coverage in excess of the
    primary casualty limits identified above, which [WPH] and Houdaille have
    in effect, for claims made pertaining to occurrences prior to the date of the
    [c]losing, but only to the extent that such insurance coverage is in fact
    available.22
    After executing the Warren ASA Amendment, Warren, WPH, and Houdaille closed on
    the Warren ASA. Warren assumed the Warren Pumps business.
    Relying upon extrinsic evidence, Travelers contends that the parties to the
    instrument failed to manifest any intent to assign rights to the excess policies.
    Specifically, Travelers urges that the unamended portions of the Warren ASA and the
    ―overall context‖ of the original Warren ASA indicate that Houdaille was not attempting
    to effect any assignment of rights to the Excess Policies through the instrument. Further,
    22
    TA969-70.
    12
    it asserts that the Warren ASA Amendment was intended only as a transfer of rights to
    the Liberty umbrella policies.
    Despite Travelers‘ argument to the contrary, the contractual language of the
    Warren ASA Amendment is unambiguous. Under New York law, which governs the
    Warren ASA,23 ―[e]xtrinsic evidence of the parties‘ intent may be considered only if the
    agreement is ambiguous, which is an issue of law for the courts to decide.‖24 ―A contract
    is unambiguous if the language it uses has ‗a definite and precise meaning, unattended by
    danger of misconception in the purport of the [agreement] itself, and concerning which
    there is no reasonable basis for a difference of opinion.‘‖25
    As initially drafted, the Warren ASA did not assign Warren coverage under the
    Excess Policies. But the Warren ASA Amendment did. The Amendment assigned ―the
    insurance coverage in excess of the primary casualty limits.‖26 As the Court of Chancery
    observed, ―[t]he Excess Policies were unquestionably coverage ‗in excess of the primary
    casualty limits.‘‖27 Moreover, the Warren ASA Amendment contains no language that
    indicates that Houdaille and Warren intended that the assignment be limited to the
    Liberty umbrella policies.       Rather, the ASA Amendment, on its face, is reasonably
    susceptible of only one meaning: it assigned coverage under the Excess Policies to
    Warren. Because the meaning of ―the insurance coverage in excess of the primary
    23
    The Warren ASA is governed by the ―laws of the State of New York.‖ TA865.
    24
    Greenfield v. Philles Records, Inc., 
    780 N.E.2d 166
    , 170 (N.Y. 2002) (citing W.W.W. Assocs.,
    Inc. v. Giancontieri, 
    566 N.E.2d 639
    , 642 (N.Y. 1990)) (emphasis added).
    25
    Selective Ins. Co. of Am. v. Cnty. of Rensselaer, 
    47 N.E.3d 458
    , 461 (N.Y. 2016) (quoting
    Greenfield, 780 N.E.2d at 170-71) (alteration in Selective Ins.).
    26
    TA969 (emphasis added).
    27
    Viking Pump II, 
    2 A.3d at 94
    .
    13
    casualty limits‖ is clear, extrinsic evidence may not be considered under New York law.28
    Accordingly, we conclude that the Court of Chancery did not err in concluding that
    Houdaille validly assigned coverage under the Excess Policies to Warren.
    ii.    Houdaille Validly Assigned Coverage Under the Excess Policies to Viking in the
    1985 Assignment and Assumption Agreement
    Pursuant to an Assignment and Assumption Agreement, dated January 31, 1985,
    the Viking Pump business was assigned to Viking (the ―Viking AAA‖).29 Viking was, at
    that time, operated as a wholly-owned subsidiary of Houdaille.               The Viking AAA
    assigned Viking Pump assets—and their related liabilities—to Viking.                Specifically,
    under the Viking AAA, Viking was assigned ―all of the right, title and interest of
    [Houdaille] in and to all of the properties and assets of [Houdaille] (whether tangible or
    intangible, real or personal) required for the conduct of the business of [Viking
    30
    Pump] . . . .‖        Included among such properties and assets of Houdaille were, ―without
    limitation, . . . [all] arrangements or understandings of whatsoever nature, whether oral or
    written . . . .‖31 Viking also agreed to assume ―[a]ll obligations and liabilities for which
    [Viking Pump] . . . or any other [p]redecessor‖ was responsible under such arrangements
    and understandings.32
    28
    See W.W.W. Assocs., 566 N.E.2d at 642 (―A familiar and eminently sensible proposition of law
    is that, when parties set down their agreement in a clear, complete document, their writing should
    as a rule be enforced according to its terms. Evidence outside the four corners of the document
    as to what was really intended but unstated or misstated is generally inadmissible to add to or
    vary the writing.‖ (citations omitted)).
    29
    TA1036-40.
    30
    TA1036.
    31
    TA1036.
    32
    TA1038.
    14
    Through the Viking AAA, Viking explicitly ―assume[d] and agree[d] to pay or
    otherwise perform when due all of the obligations and liabilities, directly or indirectly, of
    [Viking Pump] . . . .‖33 Plainly, this provision of the Viking AAA transferred all of the
    obligations and liabilities of Viking Pump to Viking. Among the liabilities transferred to
    Viking were ―all of the obligations and liabilities, directly or indirectly, of [Viking Pump]
    or the business in whole or in part thereof or any [p]redecessor . . . or the business in
    whole or in part thereof, of whatsoever nature . . . .‖34 The Viking AAA also provided
    that Viking was assigned ―[a]ll liabilities and obligations whether known or unknown of
    the type covered by . . . general liability (including, without limitation, product liability)
    insurance . . . of [Viking Pump.]‖35
    Under Florida law, which governs the Viking AAA,36 ―[w]hen interpreting a
    contract, the court must first examine the plain language of the contract for evidence of
    the parties‘ intent.‖37    ―The intention of the parties must be determined from an
    examination of the whole contract and not from the separate phrases or paragraphs.‖38
    ―In reviewing the contract in an attempt to determine its true meaning, the court must
    review the entire contract without fragmenting any segment or portion.‖39 Further, where
    33
    TA1037.
    34
    TA1037.
    35
    TA1039.
    36
    The Viking AAA is governed by ―the laws of the State of Florida.‖ TA1040.
    37
    Hatadis v. Achieva Credit Union, 
    159 So. 3d 256
    , 259 (Fla. Dist. Ct. App. 2015) (citation
    omitted) (internal quotation marks omitted).
    38
    Jones v. Warmack, 
    967 So. 2d 400
    , 402 (Fla. Dist. Ct. App. 2007) (quoting Lalow v. Codomo,
    
    101 So. 2d 390
    , 393 (Fla. 1958)) (internal quotation marks omitted).
    39
    
    Id.
     (quoting J.C. Penney Co. v. Koff, 
    345 So. 2d 732
    , 735 (Fla. Dist. Ct. App. 1977)) (internal
    quotation marks omitted).
    15
    a contract is unambiguous on its face, the parol evidence rule bars the introduction of
    extrinsic evidence.40 A word or phrase is ambiguous, permitting the consideration of
    extrinsic evidence, ―only when it is of uncertain meaning, and may be fairly understood
    in more ways than one.‖41
    The Viking AAA employed broad contractual language to transfer to Viking all of
    the properties and assets of Houdaille necessary for the conduct of the business of Viking
    Pump.    The instrument transfers to Viking all of the tangible and intangible assets
    required for the operation of Viking Pump, and it does so without limitation. That is,
    under the Viking AAA, Houdaille transferred to Viking ―all of the right, title and
    interest‖ of Houdaille in the contracts necessary for Viking to operate the Viking Pump
    business.42   As the sweeping language of the Viking AAA makes readily apparent,
    Houdaille and its then–wholly owned subsidiary, Viking, entered into the agreement with
    the intention that Viking assume all right, title, and interest in the contracts,
    arrangements, and understandings necessary to operate Viking Pump.
    Travelers argues that the Viking AAA failed to identify the Excess Policies as
    among the rights to be transferred.       In view of the unambiguous contractual terms
    assigning to Viking all of the right, title, and interest of Houdaille in ―all outstanding
    contracts‖ necessary for the operation of the Viking Pump business, Travelers‘ argument
    is unpersuasive. The Viking AAA manifests Houdaille‘s intent to assign all right, title,
    and interest in such contracts and an intention by Viking to receive the same for valuable
    40
    See Olive v. Tampa Educ. Cable Consortium, 
    723 So. 2d 883
    , 884 (Fla. Dist. Ct. App. 1998).
    41
    Friedman v. Va. Metal Prods. Corp., 
    56 So. 2d 515
    , 517 (Fla. 1952) (citation omitted).
    42
    TA1036.
    16
    consideration. That the Viking AAA did not specifically identify the Excess Policies
    does not undermine the comprehensive contractual language utilized to effect the asset
    transfer. Nor does Florida law require the level of specificity that Travelers seeks.43
    Accordingly, considering the agreement as a whole, the Viking AAA reflects a
    comprehensive transfer of all of the assets, including rights to insurance coverage,
    required for the operation of the Viking Pump business.
    iii.     In Light of the 1988 Stock Purchase Agreement, Viking Maintained Coverage
    Under the Excess Policies
    After executing the Viking AAA, Houdaille continued to operate Viking Pump as
    a wholly-owned subsidiary for the next three years. In January 1988, Houdaille sold all
    of the outstanding shares of Viking to IDEX Corporation (―IDEX‖) through a Stock
    Purchase Agreement (the ―Viking Stock Agreement‖).                 In addition to the shares of
    Viking, IDEX purchased the stock of five other Houdaille subsidiaries (collectively with
    Viking, the ―Sold Subsidiaries‖). In exchange for Viking and the other subsidiaries,
    Houdaille received $190 million and 20,000 shares of stock in IDEX.
    43
    The principal case relied upon by Travelers states that Florida law requires ―[n]o particular
    words or form of instrument is necessary to effect an equitable assignment and any language,
    however informal, which shows an intention on one side to assign a right . . . and an intention on
    the other to receive, if there is a valuable consideration, will operate as an effective equitable
    assignment.‖ See SourceTrack, LLC v. Ariba, Inc., 
    958 So. 2d 523
    , 526 (Fla. Dist. Ct. App.
    2007) (quoting Giles v. Sun Bank, N.A., 
    450 So. 2d 258
    , 260 (Fla. Dist. Ct. App. 1984)) (internal
    quotation marks omitted) (alteration in original and added); see also 29 WILLISTON ON
    CONTRACTS § 74:3 (4th ed. 2016) (―No words of art are required to constitute an assignment; any
    words that fairly indicate an intention to make the assignee owner of a claim are sufficient . . . .‖
    (citations omitted)); RESTATEMENT (SECOND) OF CONTRACTS ch. 15, topic 2, § 324, cmt. a
    (1981) (―Assignment requires an assignable right. Aside from statute, the assignor of such a
    right may make an assignment by manifestation of intention without any particular formality.‖
    (internal citations omitted)).
    17
    The Viking Stock Agreement does not make reference to Viking‘s or any other
    subsidiary‘s right to insurance coverage.       However, Section 5.12 of the instrument
    provides:
    5.12 Allocation of Certain Liabilities. Upon the Closing, [IDEX] will as a
    result of such transaction assume only those liabilities that pertain to the
    [Sold Subsidiaries], including, but not limited to, those liabilities set out on
    Schedule B hereto, and [IDEX] shall release, indemnify and hold Houdaille
    harmless from all such liabilities; provided, however, that Houdaille shall
    remain liable to the extent of insurance coverage available (in the event of
    claims arising from occurrences prior to the Closing Date, only to the
    extent such coverage is available on an occurrence basis) under existing or
    previously existing casualty insurance policies (including workmen’s
    compensation) and only if [IDEX] reimburses Houdaille for the deductible,
    if any, applicable to any such claim for which coverage is claimed.44
    As the Court of Chancery observed, Section 5.12 of the Viking Stock Agreement is
    complicated by the reality that, in 1985, Houdaille had already transferred the Houdaille-
    Era Claims and the associated insurance rights to Viking through the Viking AAA.
    Under Delaware law, which governs the Viking Stock Agreement,45 courts
    interpreting a contract ―will give priority to the parties‘ intentions as reflected in the four
    corners of the agreement, construing the agreement as a whole and giving effect to all its
    provisions.‖46 ―Contract terms themselves will be controlling when they establish the
    parties‘ common meaning so that a reasonable person in the position of either party
    would have no expectations inconsistent with the contract language.‖47 When there is
    44
    TA1065-66 (underline in original) (italics added).
    45
    The Viking Stock Agreement is ―governed by the laws of the State of Delaware[.]‖ TA1060.
    46
    Salamone, 106 A.3d at 368 (Del. 2014) (quoting GMG Capital Invs., LLC v. Athenian Venture
    Partners I, L.P., 
    36 A.3d 776
    , 779 (Del. 2012)) (internal quotation marks omitted).
    47
    GMG Capital Invs., 
    36 A.3d at 780
     (quoting Eagle Indus., Inc. v. DeVilbiss Health Care, Inc.,
    
    702 A.2d 1228
    , 1232 (Del. 1997)) (internal quotation marks omitted).
    18
    ambiguity flowing from contractual language, ―the interpreting court must look beyond
    the language of the contract to ascertain the parties‘ intentions.‖48 When construing
    ambiguous contractual provisions, Delaware courts are permitted to consider the parties‘
    course of dealing.49
    Viking was not a party to the Viking Stock Agreement. Nothing in the Stock
    Agreement purports to transfer to Houdaille any rights or liabilities belonging to Viking.
    In particular, Section 5.12 allocates liabilities between IDEX and Houdaille—not Viking.
    Nor does Section 5.12 contemplate divesting Viking of the rights and liabilities it had
    agreed to assume via the 1985 Viking AAA.
    In addressing the perceived ambiguity, the Court of Chancery properly considered
    the course of performance following the closing of the Viking Stock Agreement. The
    court concluded that, ―for a generation [Viking] has acted as if it was responsible for the
    Houdaille-Era Claims.‖50 It found that, ―everyone who was a party to the Viking Stock
    Agreement has acted as if [Viking] retained both liability for the Houdaille-Era Claims
    and the Insurance Rights,‖ and that ―those parties even did so when these issues were
    against their own interests.‖51
    Travelers suggests that an internal Houdaille memorandum, dated October 16,
    1987, demonstrates the intent underlying the Viking Stock Agreement.                   The
    memorandum provides: ―Existing claims and claims for occurrences prior to the date of
    48
    Eagle Indus., 
    702 A.2d at 1232
     (citations omitted).
    49
    
    Id. at 1233
    .
    50
    Viking Pump II, 
    2 A.3d at 101
    .
    51
    
    Id. at 102
    .
    19
    closing (but yet to be reported) will be the responsibility of Houdaille and would be
    covered under the previously purchased Houdaille insurance policies.‖52 That is, the
    memorandum contemplates that, after the sale of Viking and other subsidiaries, Houdaille
    would remain liable for occurrences preceding the closing date, including the Houdaille-
    Era Claims. But the 1987 memorandum fails to address, in view of the 1985 Viking
    AAA, the fact that the liability and insurance rights related to the Houdaille-Era Claims
    had been assigned previously to Viking. In short, it clarifies little. Moreover, the record
    evidence does not indicate that the internal Houdaille memorandum was shared with, or
    approved by, IDEX.
    As Travelers concedes, the Viking Stock Agreement does not manifest any
    intention of Viking, Houdaille, or IDEX to re-assign the assets and liabilities that were
    assumed by Viking in 1985.            However, the Viking AAA reflects a comprehensive
    transfer from Houdaille to Viking of all of the liabilities and assets, including rights to
    insurance coverage, pertaining to the Viking Pump business.               The Viking Stock
    Agreement and the extrinsic evidence related thereto did not address the Viking AAA, let
    alone undo its valid, unambiguous, and broad transfer of all of the right, title, and interest
    of Houdaille in and to all of the assets of Houdaille required for the conduct of the
    business of Viking Pump.
    iv.    The Anti-Assignment Provisions Do Not Preclude Transfer of Post-Loss Claims
    On appeal, the principal argument raised by the Excess Insurers with respect to the
    validity of the assignments made to Warren and Viking is that, under the relevant
    52
    TA1074 (emphasis in original).
    20
    insurance policies, the insured‘s failure to obtain the consent of the insurer in advance of
    assigning coverage rights invalidates the efficacy of the transfer. Both Warren and
    Viking disagree, urging that the anti-assignment provisions do not bar the assignment of
    insurance rights for pre-assignment occurrences.53 The primary liability, umbrella, and
    53
    The Excess Insurers have relied upon the California Supreme Court‘s decision Henkel
    Corporation v. Hartford Accident & Indemnity Company, 
    62 P.3d 69
     (Cal. 2003), as the
    foundation for their argument that the anti-assignment provisions in the Houdaille insurance
    policies vitiate Houdaille‘s assignments to Warren and Viking of insurance rights for pre-
    assignment occurrences. The Court of Chancery found that ―New York law on this matter is in
    accord with the dissent in Henkel, which stressed that anti-assignment clauses should not apply
    in this context because ‗[t]he risk insured against does not increase because the insurer‘s duty to
    defend and indemnify relates to an injury or damage which was suffered by the claimant prior to
    the assignment of benefits to a successor corporation.‘‖ Viking Pump II, 
    2 A.3d at 105
     (quoting
    Henkel, 
    62 P.3d at 79
     (Moreno, J., dissenting)) (emphasis in Henkel).
    In Henkel, the California Supreme Court held that consent-to-assignment clauses
    preclude an insured‘s transfer of the right to invoke coverage without the insurer‘s consent, even
    after the coverage-triggering event had already occurred. It concluded that such attempted
    assignments would be ineffective until the underlying claims ―bec[a]me an assignable chose in
    action‖ by being ―reduced to a sum of money due or to become due under the policy.‖ Henkel,
    
    62 P.3d at 75
    .
    Based upon California Insurance Code § 520, the California Supreme Court, in Fluor
    Corp. v. Superior Court of Orange County, overruled Henkel, holding that ―after personal injury
    (or property damage) resulting in loss occurs within the time limits of the policy, an insurer is
    precluded from refusing to honor an insured‘s assignment of the right to invoke defense or
    indemnification coverage regarding that loss.‖ Fluor Corp. v. Superior Court of Orange Cnty.,
    
    354 P.3d 302
    , 334 (Cal. 2015). The California Supreme Court observed that ―[t]his result
    obtains even without consent by the insurer—and even though the dollar amount of the loss
    remains unknown or undetermined until established later by a judgment or approved settlement.‖
    
    Id.
     (emphasis added). The court in Henkel had not considered Section 520. In Fluor, the court
    held that Section 520 ―dictates a result different from that reached in Henkel.‖ Id. at 304. The
    Fluor court noted that ―[S]ection 520 bars an insurer, ‗after a loss has happened,‘ from refusing
    to honor an insured‘s assignment of the right to invoke the insurance policy‘s coverage for such a
    loss.‖ Id. (quoting CAL. INS. CODE § 520 (West)). The court further observed that ―the rule
    embodied in Section 520 is consistent with the overwhelming majority of cases decided before
    and since Henkel.‖ Id.
    On August 26, 2015, this Court directed the parties to file simultaneous supplemental
    memoranda regarding the California Supreme Court‘s decision in Fluor. The Excess Insurers
    argued that New York has rejected a statute similar to California Insurance Code § 520, asserting
    that ―[i]f a court were to impose the language of § 502 [sic] as New York law today, this would
    effectively overrule the expressed will of that state‘s political branches.‖ Further, the Excess
    Insurers urged that the facts in this matter are distinguishable from those of Fluor. Viking and
    21
    excess policies contain anti-assignment provisions, which generally provide that
    ―[a]ssignment of interest under this policy shall not bind [the insurer] until its consent is
    endorsed hereon.‖54 The policies that do not contain such language either follow form or
    contain a similarly-phrased exclusion.
    Because the insurance policies do not contain a governing law provision, the Court
    of Chancery engaged in a choice of law analysis to determine the State law that should
    govern. We agree with its conclusion that New York law applies, as the law of that
    jurisdiction had the most significant relationship to the insurance coverage as a whole.55
    The Court of Chancery then found that ―Houdaille never sought or received the Excess
    Insurers‘ consent to transfer rights under the Excess Policies . . . .‖56 Neither Warren nor
    Viking contends that this factual finding is clearly erroneous. Instead, they assert that the
    insurance coverage rights were transferred after the loss triggering coverage had already
    taken place, rendering the anti-assignment provisions ineffective under New York law.57
    ―As a general matter, New York follows the majority rule that [a no-transfer]
    provision is valid with respect to transfers that were made prior to, but not after, the
    Warren argued that Fluor ―aligned California with the ‗overwhelming majority‘ of American
    jurisdictions that authorize transfers of insurance rights for pre-assignment events.‖ We are not
    persuaded by the Excess Insurers‘ supplemental arguments on appeal for the reasons set forth
    herein.
    54
    See, e.g., TA1123.
    55
    Viking Pump II, 
    2 A.3d at 90
    . While Travelers argues on appeal that Florida law applies, and
    that the Court of Chancery erred, it states that any error would be ―harmless because the laws of
    Florida and New York are in accord on the issues raised in this brief.‖ Travelers Op. Br. 21 n.11.
    56
    Viking Pump II, 
    2 A.3d at 103
    .
    57
    Viking, with whom Warren joins, also contends that the anti-assignment provisions fail to
    defeat the transfer of insurance rights under both New York and Florida law. See Viking Ans.
    Br. 20.
    22
    insured-against loss has occurred.‖58 The principles underlying the majority rule are
    twofold. First, after a loss has occurred, an assignment is not a transfer of the policy
    itself, but rather of a claim for policy proceeds that previously vested against the insurer
    and in favor of the original insured.59 As the United States Court of Appeals for the
    Second Circuit explained, ―[t]he idea behind the majority rule is that, once the insured-
    against loss has occurred, the policy-holder essentially is transferring a cause of action
    rather than a particular risk profile.‖60 Second, when the loss occurs before the transfer of
    insurance coverage rights, ―the characteristics of the [assignee] are of little importance:
    regardless of any transfer[,] the insurer still covers only the risk it evaluated when it
    wrote the policy.‖61 Insurers have a legitimate interest in deciding whether to allow
    58
    Globecon Grp., LLC v. Hartford Fire Ins. Co., 
    434 F.3d 165
    , 170 (2d Cir. 2006) (citing
    Travelers Indem. Co. v. Israel, 
    354 F.2d 488
    , 490 (2d Cir. 1965) (―Although assignment of the
    policy prior to loss [is] ineffective without the consent of the insurer, no such approval [is]
    necessary for an assignment of the right to the proceeds after the loss.‖) (alteration in Globecon
    Grp.)) (citation omitted); see also Arrowood Indem. Co. v. Atl. Mut. Ins. Co., 
    96 A.D.3d 693
    , 694
    (N.Y. App. Div. 2012) (same).
    59
    See 2 COUCH ON INSURANCE § 34:25 (3d ed. 2016) (―While the general rule regards liability
    and indemnity policies as nonassignable personal contracts, assignment is valid following
    occurrence of the loss insured against and is then regarded as chose in action rather than transfer
    of actual policy.‖ (citations omitted)); id. at § 35:8 (―Although there is some authority to the
    contrary, the great majority of courts adhere to the rule that general stipulations in policies
    prohibiting assignments of the policy, except with the consent of the insurer, apply only to
    assignments before loss, and do not prevent an assignment after loss, for the obvious reason that
    the clause by its own terms ordinarily prohibits merely the assignment of the policy, as
    distinguished from a claim arising under the policy, and the assignment before loss involves a
    transfer of a contractual relationship while the assignment after loss is the transfer of a right to a
    money claim.‖ (emphasis added) (citations omitted)).
    60
    Globecon Grp., 
    434 F.3d at 171
    .
    61
    
    Id.
     (quoting N. Ins. Co. of New York v. Allied Mut. Ins. Co., 
    955 F.2d 1353
    , 1358 (9th Cir.
    1992)); see also 17 WILLISTON ON CONTRACTS § 49:126 (4th ed. 2016) (―Policy provisions that
    require the company‘s consent for an assignment of rights are generally enforceable only before
    a loss occurs, however. As a general principle, a clause restricting assignment does not in any
    way limit the policyholder's power to make an assignment of the rights under the policy—
    consisting of the right to receive the proceeds of the policy—after a loss has occurred. The
    23
    assignment of rights under an insurance policy, because the identity of an insured
    determines the extent of an insurer‘s risk, and an assignee may present a greater risk of
    loss to the insurer than the original insured. However, that interest is not impeded by the
    assignment of rights to claims for pre-assignment occurrences since, in such instances,
    the insurer is covering the risk it originally contracted to insure.
    Here, at the time of assignment, the losses triggering the Excess Insurers‘ potential
    liability had already occurred within the policy periods. Warren and Viking therefore
    received Houdaille‘s accrued payment rights, which had vested in Houdaille prior to the
    assignments. Further, Houdaille‘s policies provided occurrence-based coverage, such
    that its claim to payment rights arose at the time of the injurious exposure to conditions
    that resulted in personal injury. Houdaille‘s insurance rights accrued once parties were
    injured by significant exposure to asbestos during the operative policy periods and prior
    to the assignments to Warren and Viking.
    We do not find persuasive the Excess Insurers‘ argument that the anti-assignment
    provisions bar the transfers because ―the asbestos personal-injury claims for which
    Viking and Warren now seek coverage were in no sense ‗fixed‘ or ‗measurable‘ at the
    time of the purported assignments because they had yet to be asserted.‖62 The Excess
    Insurers‘ potential liability arose at the time of injury. That the precise amount of
    reasoning here is that once a loss occurs, an assignment of the policyholder's rights regarding
    that loss in no way materially increases the risk to the insurer. After a loss occurs, the indemnity
    policy is no longer an executory contract of insurance. It is now a vested claim against the
    insurer and can be freely assigned or sold like any other chose in action or piece of property.‖
    (citations omitted)).
    62
    Travelers Op. Br. 27 (citations omitted).
    24
    liability was not identifiable at the time of assignment did not alter the Excess Insurers‘
    obligation to insure the risks for which they contracted.63 As they pertain to the pre-
    assignment, insured-against losses, therefore, the anti-assignment provisions are
    ineffective.64 Under New York law, Houdaille validly assigned the insurance coverage
    rights to Warren and Viking. Accordingly, we affirm the decision of the Court of
    Chancery on these issues.
    B.      The Superior Court Correctly Held that the 1980-1985 Liberty Primary Policies
    Are Exhausted
    The Superior Court held in its Final Judgment that ―[t]he aggregate limits for
    products liability coverage of all primary and umbrella policies that [Liberty] issued to
    Houdaille for time periods collectively covering January 1, 1972 to January 1, 1986 are
    exhausted.‖65 It also held that ―[t]he aggregate limits for products liability coverage of all
    primary and umbrella liability policies that Liberty or Travelers Indemnity Company
    issued to Warren Pumps, Inc. for time periods collectively covering January 1, 1966 to
    December 1, 1972 are exhausted.‖66 Finally, it held that, ―[a]ny aggregate limits for
    products liability coverage of all alleged pre-1966 Liberty primary policies covering
    Warren are deemed exhausted by Warren‘s settlement with Liberty . . . .‖67
    1. Contentions of the Parties
    63
    See also Fluor, 354 P.3d at 334.
    64
    See Globecon Grp., 
    434 F.3d at 170
    ; Travelers Indem. Co., 
    354 F.2d at 490
    ; see also
    Arrowood Indem. Co., 
    96 A.D.3d at 694
    ; see also GreenHomes Am., LLC v. Farm Family Cas.
    Ins. Co., 
    91 A.D.3d 1352
    , 1352-53 (N.Y. App. Div. 2012).
    65
    Final Judgment at JA1864.
    66
    Final Order at JA1864.
    67
    Final Order at JA1864. This Court has omitted reference to the amount of the settlement,
    which has been designated as confidential by Warren.
    25
    Liberty issued primary and umbrella-layer coverage to Houdaille from 1972 to
    1985. Only the primary policies for 1980 through 1985 had deductibles. On appeal, the
    Excess Insurers contend that the Superior Court erred in holding that the Liberty
    coverage for 1980-1985 was exhausted, triggering the Excess Policies, where the Liberty
    policies included a $100,000 per-occurrence deductible. The Excess Insurers‘ appeal
    relates only to Liberty‘s primary policies for 1980 through 1985. We agree with the
    Superior Court that these policies have been exhausted.
    The Excess Insurers do not dispute that Liberty paid the policies‘ full aggregate
    limits. Rather, they claim that Liberty failed to collect the appropriate deductibles.
    Central to their argument is their contention that payments made within the deductible
    amount do not erode Liberty‘s aggregate limits.68 They argue that Viking and Warren
    were motivated to avoid the deductible payments since almost all of their claims have
    settled for under $100,000. The Excess Insurers contend that Liberty was similarly
    motivated to effect a premature exhaustion of the policies since Liberty‘s defense costs
    did not erode policy limits, and once Liberty‘s aggregate limits were reached, its
    obligation to pay defense costs ended.69
    68
    The Excess Insurers offered an example which this Court has modified using fictional numbers
    to preserve as confidential the amount of the policies‘ aggregate limits: Assume Liberty‘s
    aggregate limit was $4,000 for a given year, and there was a $100 per-occurrence deductible. A
    $5,000 covered claim for a single occurrence would exhaust Liberty‘s $4,000 aggregate limit for
    a given year. But 400,000 $90 claims from separate occurrences otherwise entitled to coverage,
    despite adding up to $36 million, would not deplete Liberty‘s $4,000 aggregate limit because
    such payments are below the per-occurrence deductible and therefore do not, in their view, erode
    the aggregate limit.
    69
    The parties do not dispute that defense costs do not erode the limits of the Liberty primary
    policies.
    26
    The Excess Insurers argue that instead of paying the deductible, Warren and
    Viking separately entered into multi–million dollar settlements with Liberty. The Excess
    Insurers disagree with Viking and Warren‘s contention that the deductibles were
    calculated and collected as part of an ―adjusted premium‖ and argue that such a finding
    ignores the meaning of ―deductible‖ under New York law. They claim that the policies‘
    deductible language is clear and that the Superior Court erred in ruling that ―whether or
    not the deductible was appropriately applied on an actual per-occurrence basis is beside
    the point[.]‖70
    Viking and Warren contend that the Superior Court correctly found that Liberty‘s
    1980-85 primary policies are exhausted. They proffer three arguments in response to the
    Excess Insurers‘ challenges. First, they claim the Excess Policies are triggered when the
    underlying insurers pay their full policy limits. They argue that while an excess insurer is
    free to contest coverage under its own policy, it cannot avoid or reduce its liability by
    challenging the propriety of an underlying insurer‘s decision to pay.
    Second, they contend that whether the primary policies had $100,000 per-
    occurrence deductibles is irrelevant since the deductible is part of the policy‘s limits, and
    all payments of loss erode policy limits. Thus, they argue that because it is undisputed
    that Liberty‘s indemnity payments under these policies matched the policies‘ total limits,
    it does not matter who paid the loss (as between Viking and Warren or Liberty). Under
    either scenario, they maintain that the payments exhausted the policies.
    70
    Viking Pump III, 
    2013 WL 7098824
    , at *20.
    27
    Third, they claim that the policies‘ plain language shows that Liberty properly
    calculated and collected deductibles as part of an adjusted premium. The Premium
    Endorsement expressly includes a ―Deductible Expense‖ component. The Superior Court
    found that there was ―substantial evidence‖ supporting the jury‘s finding in favor of
    Viking and Warren‘s contention that the deductible and premium adjustment provisions,
    when read together, provided that the Liberty deductibles were calculated and paid as part
    of the premium adjustment.71
    2.        The Proceedings Below
    In the proceedings below, the parties agreed that, ―as to exhaustion, the policies
    [were] unambiguous and, therefore, there [was] no need for extrinsic evidence.‖ 72 The
    Deductible Endorsement, which provided for a $100,000 per-occurrence deductible,
    reads, in pertinent part:
    1. [Liberty‘s] obligation under Coverage A - Personal Injury Liability and
    Coverage B - Property Damage Liability applies only to the amount of such
    damages and ―allocated loss adjustment expense‖ in excess of a deductible
    amount of $100,000 because of all ―personal injury‖ and ―property
    damage‖ combined, as the result of any one occurrence.
    2. [Liberty] shall be liable only for an amount equal to the ―Personal
    Injury‖ and ―Property Damage‖, ―Each Occurrence‖ limit stated in the
    policy minus the applicable amount of deductible damages (excluding
    allocated loss adjustment expense) under the above Paragraph 1[;] and,
    subject to the foregoing, only for the difference between the ―Personal
    Injury‖ or ―Property Damage‖ aggregate limits stated in the policy and the
    sum of deductible damages (excluding allocated loss adjustment expenses)
    applicable.
    71
    
    Id.
    72
    Id. at *19.
    28
    3. The terms of the policy including those with respect to (a) [Liberty‘s]
    rights and duties with respect to the defense of suits and (b) the insured
    duties in the event of an occurrence apply irrespective of the application of
    the deductible amount.
    ...
    5. [Liberty] may pay any part of all of the deductible amount to effect
    settlement of any claim or suit and, the ―named insured‖ shall promptly
    reimburse [Liberty] for such part of all of the deductible amount as has
    been paid by [Liberty].73
    The Excess Insurers asserted in the trial court that Liberty had ―fail[ed] to properly
    charge and collect a deductible[,]‖ and that therefore, as a matter of law, Viking and
    Warren ―could not prove that the underlying Liberty policies [had been] exhausted.‖74
    They contended that ―Liberty‘s $100,000 deductible must be applied to each claim under
    each policy contributing to the indemnity payment, because each exposure is a separate
    occurrence.‖75 In addition, they claimed that Liberty was ―only liable for claims above
    the $100,000 deductible and below the $500,000 per-occurrence limit.‖76 Finally, the
    Excess Insurers argued that the Premium Endorsement only permitted Liberty to collect a
    ―handling fee.‖77
    For their part, Viking and Warren contended that the Premium Endorsement
    permitted Liberty to collect a ―premium for the expenses of handling deductible losses‖
    73
    Joint App‘x to Warren Opening Br. JA3685 [hereinafter ―JA____‖]. Each 1980-1985 Liberty
    primary policy also includes a $500,000 ―per occurrence‖ limit of liability and a specified
    ―aggregate‖ limit of liability for ―personal injury.‖ Addendum to Excess Insurers Opening Br.
    A-42, -47, -54, -61, -71, -79; see also JA3630; JA3767; JA3923; JA4037; JA4181; JA4311.
    74
    Viking Pump III, 
    2013 WL 7098824
    , at *19.
    75
    
    Id.
    76
    
    Id.
    77
    
    Id.
    29
    and governed the calculation of premiums based on ―deductible amounts incurred.‖ 78
    ―Deductible amounts incurred‖ is defined in the Premium Endorsement to encompass ―all
    losses and ‗allocated loss adjustment expenses‘ actually paid and reserves for ‗unpaid
    losses‘ and ‗allocated loss adjustment expenses‘ as estimated by the company and which
    are reimbursed or to be reimbursed by the named insured [in addition to] . . . payments
    made directly by the named insured for all losses and ‗allocated loss adjustment expense‘
    falling within the deductible.‖79
    Additionally, Viking and Warren argued that their settlements to Liberty had
    satisfied the deductible premium. They argued further that even if they had not paid the
    deductible, Liberty remained obligated to indemnify up to the policy limits and therefore
    would have exhausted the policies regardless. According to the plaintiffs at trial, insurers
    generally ―reduce indemnity payments by the applicable deductible amount, eroding total
    limits regardless of whether a deductible is paid.‖80 Plaintiffs argued that ―the question
    of whether any portion of the amounts paid were true deductibles does not change the
    fact that those payments count towards the exhaustion of the policy limits, and those
    payments are sufficient as a matter of law to exhaust the 1980-85 Liberty primary
    policies.‖81
    78
    
    Id.
     (internal quotation marks omitted).
    79
    JA4079; see also JA3827.
    80
    Viking Pump III, 
    2013 WL 7098824
    , at *19.
    81
    
    Id.
     (internal quotation marks omitted).
    30
    At trial, plaintiffs presented testimony from Carl Brigada, Liberty‘s managing
    consultant responsible for coverage determinations.82 Brigada had been with Liberty for
    36 years. He ―testified that Liberty‘s deductibles are based on a policy endorsement.‖ 83
    Rather than requiring payment of a deductible when each claim is made, Liberty charged
    the deductible in three stages—the advanced premium, the deductible premium, and the
    excess premium—as a way for the insured to defer premiums over time.84 He maintained
    that the deductible was ―nothing more than a device that‘s used to calculate the amount of
    the premium,‖85 and that deductibles had ―no bearing on a policy‘s exhaustion.‖86 He
    testified that Viking and Warren satisfied their deductibles for the relevant policies by
    way of their settlement with Liberty.
    Brigada‘s responsibilities at Liberty also included determining whether and when
    exhaustion occurred on the Viking and Warren accounts. He testified that the relevant
    policies were exhausted after Liberty made substantial indemnity payments to all the
    Houdaille policies‘ insureds.
    Theresa Carpenter, a senior claims specialist for International and Century,
    testified for the Excess Insurers.      She ―testified that Liberty‘s 1980-1984 and 1986
    policies contained a $100,000 per-occurrence deductible, and Liberty‘s failure to capture
    82
    See, e.g., App‘x to Viking‘s Ans. Br. VB60-100 [hereinafter ―VB___].
    83
    Viking Pump III, 
    2013 WL 7098824
    , at *8.
    84
    
    Id.
    85
    
    Id.
     (internal quotation omitted).
    86
    
    Id.
    31
    Plaintiffs‘ deductible payment would artificially erode the indemnity limits.‖87 Based
    upon her calculations, Liberty was still obligated under the Liberty Policies.
    The jury rejected the Excess Insurers‘ contentions and found that Liberty‘s
    deductibles were ―paid through the premium adjustment endorsement,‖88 and not on a
    per-occurrence basis.
    Based on the jury verdict and its own analysis, the Superior Court ruled that the
    Liberty Policies were exhausted. The Superior Court observed that paragraph 3 of the
    Deductible Endorsement requires that all parties thereto ―fulfill their obligations under
    the policies, regardless of the application of the deductible amount.‖89 Additionally,
    ―paragraph 5 permits Liberty to pay the deductible itself in order to effectuate
    settlements.‖90
    Taking those points into consideration, the Superior Court held that ―it is clear that
    whether or not the deductible was appropriately applied on an actual per-occurrence basis
    is beside the point; the policy allows the parties to continue the underlying litigation
    without the complicated per-occurrence deductible payments urged by [d]efendants.‖91
    Further, the court held that ―the deductible endorsement clearly permits Liberty to accept
    the deductible later, which is what the . . . settlement between Liberty and plaintiffs
    represented, . . . [and that] although [p]laintiffs‘ argument regarding the deductible as a
    premium calculation is not in accord with the endorsements‘ language, the deductible
    87
    Id. at *9 (internal citations omitted).
    88
    JA1480.
    89
    Viking Pump III, 
    2013 WL 7098824
    , at *20 (internal quotation marks omitted).
    90
    
    Id.
    91
    
    Id.
    32
    endorsement nonetheless permits Liberty to cover the deductible and later seek
    reimbursement, presumably in the form of a premium payment.‖92 The Superior Court
    concluded that Liberty‘s decision to collect the deductible in this manner was legal and
    permitted under the terms of the relevant policies.93
    The jury agreed with Warren and Viking. The Superior Court found that ―the jury
    had an evidentiary basis to find, as it did, that Liberty‘s deductibles were part of a
    premium plan, and that Warren and Viking satisfied any outstanding payment . . . .‖94
    Because the trial court found that this aspect of the verdict was ―supported by substantial
    evidence,‖ it concluded that there was ―no basis for overturning the jury‘s finding as to
    Liberty‘s exhaustion.‖95
    3.     Standard of Review
    This Court reviews the Superior Court‘s conclusions of law de novo and applies
    the clearly erroneous standard to findings of fact.96 In addition, where supported by the
    evidence, the verdict of a jury is conclusive.97
    4.     Discussion
    92
    
    Id.
    93
    
    Id.
    94
    
    Id.
    95
    
    Id.
    96
    DV Realty Advisors LLC v. Policemen’s Annuity & Benefit Fund of Chicago, 
    75 A.3d 101
    , 108
    (Del. 2013).
    97
    Storey v. Camper, 
    401 A.2d 458
    , 465 (Del. 1979) (citing DEL. CONST. art. IV, § 11(1)(a)
    (―[O]n appeal [in civil cases] from a verdict of a jury, the findings of the jury, if supported by
    [the] evidence, shall be conclusive.‖)) (citations omitted).
    33
    We agree with Viking and Warren that the Liberty coverage for 1980-1985 was
    exhausted. The Excess Insurers‘ challenge is largely dependent upon their erroneous
    view that the $100,000 deductibles do not erode Liberty‘s aggregate limits.
    The policies‘ Deductible Endorsements state that the policies‘ aggregate limits
    (and not just per-occurrence limits) are reduced by payments within the deductible:
    The company shall be liable only for an amount equal to the ―Personal
    Injury‖ and ―Property Damage‖, ―Each Occurrence‖ limit stated in the
    policy minus the applicable amount of deductible damages (excluding
    allocated loss adjustment expense) under the above Paragraph 1. and,
    subject to the foregoing, only for the difference between the ―Personal
    Injury‖ or ―Property Damage‖ aggregate limits stated in the policy and the
    sum of deductible damages (excluding allocated loss adjustment expenses)
    applicable.98
    Thus, whether an amount paid in settlement of a claim fell within the $100,000
    deductible or not, its payment counted toward satisfaction of the aggregate policy limit.
    It is undisputed that Liberty paid the full aggregate policy limits of each of the policies on
    account of asbestos claims against Warren or Viking.99 In fact, Liberty overpaid limits in
    certain instances in order to honor settlement commitments that exceeded the limits. 100 In
    addition, Liberty paid approximately twice that amount pursuant to its defense
    obligations, which did not erode limits. We agree with the parties and the trial court that
    98
    See, e.g., JA3685, ¶ 2.
    99
    See, e.g., JA1907-08, ¶¶ 76-77 (setting forth as an established fact for submission to the jury
    that ―[t]he total amount of indemnity payments‖ documented as being made by Liberty under its
    umbrella and primary policies exceeded the ―total aggregate policy limits for products liability
    claims under‖ those policies).
    100
    VB88.
    34
    the Deductible Endorsement is unambiguous.             As such, if a policy ―on its face is
    reasonably susceptible of only one meaning, a court is not free to alter the contract.‖101
    We agree with the Superior Court that under the policies, Liberty, under paragraph
    5 of the Deductible Endorsement, ―may pay any part [or] all of the deductible amount to
    effect settlement of any claim or suit . . . .‖102 Thus, exhaustion does not depend upon
    who pays the deductible. Liberty settled a dispute over the deductibles with Warren and
    Viking, retroactively billing them for the deductibles under the 1980-85 Liberty primary
    policies and collecting them as part of Liberty‘s adjusted premiums.103 The trial court
    correctly held that this provision of the Deductible Endorsement ―allow[ed] the parties to
    continue the underlying litigation without the complicated per-occurrence deductible
    payments urged by [the d]efendants.‖104 We agree with the Superior Court‘s conclusion
    101
    Appleby v. Chicago Title Ins. Co., 
    80 A.D.3d 546
    , 549 (N.Y. App. Div. 2011) (quoting White
    v. Cont’l Cas. Co., 
    9 N.Y.3d 264
    , 267 (N.Y. 2007) (citations omitted); see also BLGH Holdings
    LLC v. enXco LFG Holding, LLC, 
    41 A.3d 410
    , 414 (Del. 2012) (―Where, as here, the plain
    language of a contract is unambiguous i.e., fairly or reasonably susceptible to only one
    interpretation, we construe the contract in accordance with that plain meaning and will not resort
    to extrinsic evidence to determine the parties‘ intentions.‖) (citation omitted).
    102
    JA3685, ¶ 5.
    103
    VB65-67; VB74; VB96-100. International and Century‘s claims handler, Theresa Carpenter,
    (the sole witness for the Excess Insurers on the issue of Liberty‘s deductibles), agreed that
    Viking‘s payment to Liberty was sufficient under the Premium Endorsement to satisfy the
    deductibles for Viking‘s asbestos claims:
    Q. . . . The payment made that Viking and Liberty take the position was a
    deductible payment, you cannot sit here today and dispute that that was a
    sufficient amount of pay-out deductibles up to the date that the payment was
    made; correct?
    A. Up to the date that payment was made, I can‘t dispute that.
    VB102.
    104
    Viking Pump III, 
    2013 WL 7098824
    , at *20.
    35
    that ―Liberty‘s method of collecting the deductible after-the-fact . . . was legal . . . [and
    that] [n]othing in the policy prevents it.‖105
    Although we need not reach the issue, the Excess Insurers‘ construction of the
    Premium Endorsement as simply a tool for calculating the cost of Liberty‘s handling
    claims that fall within the per-occurrence deductibles ignores key features of the
    Premium Endorsement. Among these features is the ―Deductible Expense‖ premium
    which is calculated using the ―deductible amounts incurred,‖ which in turn includes
    ―payments made directly by the named insured for all losses and ‗allocated loss
    adjustment expense‘ falling within the deductible.‖106            If the Premium Endorsement
    merely dealt with calculating a premium for Liberty‘s handling of losses within the
    deductible, it would make little sense to include in the endorsement a premium related to
    the insured‘s payments within the deductible. But, even if the Excess Insurers‘ reading
    were reasonable, the jury sided with Viking and Warren, and its verdict is supported
    amply by Brigada‘s testimony.107 The jury was entitled to credit Brigada‘s testimony that
    the settlement figure Liberty charged to Viking and Warren in 2008 satisfied any
    obligation owed to Liberty relating to the deductibles.
    105
    
    Id.
     As the New York Court of Appeals stated in its Certification Opinion, ―parties to an
    insurance arrangement may generally ‗contract as they wish and the courts will enforce their
    agreements without passing on the substance of them.‘‖ Viking Pump V, 52 N.E.3d at 1151
    (quoting J.P. Morgan Sec. Inc. v. Vigilant Ins. Co., 
    992 N.E.2d 1076
    , 1081 (N.Y. 2013)).
    106
    E.g., JA4079.
    107
    Additionally, New York courts commonly employ the contra proferentem rule and resolve
    ambiguities against the issuer. See, e.g., Tonkin v. Cal. Ins. Co. of San Francisco, 
    62 N.E.2d 215
    , 216 (N.Y. 1945) (noting the ―well settled principle ‗that if a policy of insurance is written in
    such language as to be doubtful or uncertain in its meaning, all ambiguity must be resolved in
    favor of the policy holder and against the company‘‖) (citation omitted) (quoting Hartol Prods.
    Corp. v. Prudential Ins. Co. of Am., 
    47 N.E.2d 687
    , 690 (N.Y. 1943)).
    36
    For these reasons, we affirm the Superior Court‘s findings and conclusions with
    respect to the exhaustion of the relevant Liberty policies.
    C.      We Affirm in Part and Reverse in Part the Superior Court’s Rulings With
    Respect to Defense Costs
    1. Contentions of the Parties
    The Superior Court held that 33 of the Excess Policies at issue in this appeal
    provide coverage to Viking and Warren for their defense costs.108 In deciding whether
    the Excess Policies provide coverage for defense costs within or in addition to policy
    limits, the Superior Court divided the policies into six categories, four of which we have
    assigned to Groups for ease of reference in this discussion: (a) true follow-form; (b)
    follow-form by endorsement; (c) ―coverage‖ and ―conditions‖ (―Group One‖); (d)
    108
    See Viking Pump III, 
    2013 WL 7098824
    , at *29 (holding that 32 of the Excess Policies
    provide for coverage of defense costs; two of these were later resolved by the parties, leaving 30
    Excess Policies at issue); Viking Pump IV, 
    2014 WL 1305003
    , at *2-3 (acknowledging that three
    policies were ―inadvertently omitted‖ from the Superior Court‘s Opinion in Viking Pump III and
    holding that all three of those policies ―provide full defense obligations in addition to policy
    limits‖). To summarize, the 33 Excess Policies at issue in this appeal are (1) Fidelity Policy No.
    SRX1889565; (2) National Union Policy No. 9601115; (3) Commercial Union Policy No.
    CY9502120; (4) Republic Policy No. CDE0835; (5) Vanguard Policy No. CDE1462; (6) Puritan
    Policy No. ML652652; (7) Aetna Policy No. 06XN243WCA; (8) Aetna Policy No.
    06XN194WCA; (9) London Policy No. K25878; (10) London Policy No. 881/UHL0395; (11)
    London Policy No. 881/UKL0340; (12) London Policy No. 881/UKL0341; (13) London Policy
    No. 881/UKL0342; (14) Lexington Policy No. CE5504779; (15) Central National Policy No.
    CNZ141951; (16) Central National Policy No. CNZ141989; (17) Century Indemnity Policy No.
    CIZ425741; (18) Granite State Policy No. 62790163; (19) Old Republic Policy No. OZX11405;
    (20) Puritan Policy No. ML651258; (21) Lexington Policy No. GC403427; (22) Lexington
    Policy No. CE5503312; (23) London Policy No. CX5026; (24) London Policy No. K24961; (25)
    London Policy No. 881/UGL0160; (26) London Policy No. 881/UGL0162; (27) California
    Union Policy No. ZCX003889; (28) INA Policy No. XCP156562; (29) INA Policy No.
    XCP145194; (30) Lexington Policy No. 5510143; (31) International Policy No. 5220113076;
    (32) International Policy No. 5220282357; and (33) International Policy No. 5220489339.
    37
    ―assistance‖ and ―cooperation‖ (―Group Two‖); (e) ―assistance and cooperation [with]
    consent‖ (―Group Three‖); and (f) those that define ―ultimate net loss‖ (―Group Four‖).109
    The Excess Insurers argue that the Superior Court erred for two principal reasons.
    First, the Excess Insurers contend that Liberty has no duty to defend Viking‘s and
    Warren‘s claims pursuant to the underlying policies. Second, the Excess Insurers assert
    that certain Excess Policies contain express defense exceptions disclaiming liability for
    defense costs. Specifically, the Excess Insurers urge that certain of the Excess Policies
    ―expressly disclaim any duty to provide defense costs,‖110 ―contain assistance and
    cooperation clauses that give the insurer the right, but not the obligation, to assume the
    defense,‖111 or incorporate definitions of ―loss‖ or ―ultimate net loss‖ that ―exclude any
    obligation to pay defense costs.‖112
    Joined by Viking, Warren responds by arguing that the Superior Court correctly
    concluded that all of the Excess Policies at issue in this matter provide coverage for
    defense costs. First, Warren contends that the Liberty umbrella policies cover defense
    costs. Second, Warren asserts that the Excess Policies all incorporated the obligation to
    cover defense costs set forth in the underlying Liberty umbrella policies.
    In its appeal, Warren contends that the Superior Court erred in holding that
    sixteen of the Excess Policies count the payment of defense costs against their policy
    limits. In response, the Excess Insurers raise two principal arguments. First, they assert
    109
    See Viking Pump III, 
    2013 WL 7098824
    , at *24-28.
    110
    Excess Insurers Op. Br. 44.
    111
    Id. at 46.
    112
    Id. at 48.
    38
    that the policies do not pay defense costs at all. Second, they urge that if the Excess
    Policies do provide for defense costs, such payments are limited to the relevant policy
    limits.
    2.        Standard of Review
    This Court reviews the Superior Court‘s construction and interpretation of
    insurance policies de novo.113
    3.        Discussion
    i.     Liberty Has Defense Obligations Under Its Umbrella Policies
    The Excess Insurers urge that the Superior Court erred by concluding that the
    Liberty umbrella policies create defense obligations on behalf of the insurer. They
    contend that Liberty has defense obligations only for claims not covered by underlying
    insurance. Thus, the Excess Insurers argue that if Liberty has no duty to defend, the
    Excess Insurers likewise have no duty to defend. In response, Warren asserts that the
    Liberty policies contain a duty to pay defense costs.
    Under New York law, ―[a]n insurance agreement is subject to principles of
    contract interpretation.‖114 ―When construing insurance policies, the language of the
    ‗contracts must be interpreted according to common speech and consistent with the
    113
    Phillips Home Builders, Inc. v. Travelers Ins. Co., 
    700 A.2d 127
    , 129 (Del. 1997); see also
    Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 
    616 A.2d 1192
    , 1195 (Del. 1992)
    (―The proper construction of any contract, including an insurance contract, is purely a question
    of law. Accordingly, we review de novo for legal error the Superior Court‘s decision.‖ (internal
    citations omitted)).
    114
    Universal Am. Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 
    37 N.E.3d 78
    , 80 (N.Y.
    2015).
    39
    reasonable expectation of the average insured.‘‖115 A reviewing court ―must construe the
    policy in a way that affords a fair meaning to all of the language employed by the parties
    in the contract and leaves no provision without force and effect.‖116 ―New York applies
    ‗a functional analysis to separate lines of insurance, and an insurance policy should be
    read in light of the role it is to play.‘‖117 Further, ―while ambiguities in an insurance
    policy are to be construed against the insurer, a contract is not ambiguous if the language
    it uses has a definite and precise meaning, unattended by danger of misconception in the
    purport of the [agreement] itself, and concerning which there is no reasonable basis for a
    difference of opinion.‖118
    The Liberty umbrella policies provide:
    INVESTIGATION, DEFENSE, SETTLEMENT, ASSISTANCE AND
    COOPERATION
    With respect to personal injury . . . covered under this policy (or which
    would be covered but for the Insured’s retention as stated in the
    declarations), but not covered under any underlying policy or any other
    insurance, the company will
    (1) defend any suit against the Insured seeking damages on account thereof,
    even if such suit is groundless, false, or fraudulent; . . .
    (2) pay all expenses incurred by the company, all costs taxed against the
    Insured in any suit defended by the company and all interest on the
    entire amount of any judgment therein . . . ;
    115
    Viking Pump V, 52 N.E.3d at 1151 (quoting Dean v. Tower Ins. Co. of N.Y., 
    979 N.E.2d 1143
    ,
    1145 (N.Y. 2012)).
    116
    
    Id.
     (citation omitted) (internal quotation marks omitted).
    117
    Jefferson Ins. Co. of N.Y. v. Travelers Indem. Co., 
    703 N.E.2d 1221
    , 1226 (N.Y. 1998)
    (quoting Graphic Arts Mut. Ins. Co. v. Bakers Mut. Ins. Co. of N.Y., 
    382 N.E.2d 1347
    , 1350
    (N.Y. 1978)).
    118
    Viking Pump V, 52 N.E.3d at 1151 (internal citations omitted) (internal quotation marks
    omitted) (alterations in Viking Pump and added).
    40
    *      *      *
    (4) pay all reasonable expenses incurred by the Insured at the company’s
    request in assisting the company in the investigation or defense of any
    claim or suit . . . ;
    and the amounts so incurred, except settlement of claims and suits, are not
    subject to the insured‘s retention as stated in the declarations and are
    payable by the company in addition to the applicable limit of liability of
    this policy.119
    Based upon the foregoing contractual language, the Excess Insurers assert that use
    of the term ―covered‖ in the Liberty umbrella policies ―should be construed as referring
    to whether the primary policy provides coverage and not to whether it is collectible.‖120
    They argue further that, ―even if the primary policies were fully exhausted, the
    underlying asbestos claims would remain ‗covered‘ by the primary policy so that Liberty
    would have no defense obligations under its umbrella policies.‖121
    In construing the agreements as a whole, the first section of the Liberty umbrella
    policies, entitled ―Coverage—Excess Liability,‖ provides:
    The company will pay on behalf of the Insured all sums in excess of the
    retained limit which the Insured shall become legally obligated to pay, or
    with the consent of the company, agrees to pay, as damages, direct or
    consequential, because of: (a) personal injury . . . .122
    The policy defines ―retained limit‖ as follows:
    ―retained limit‖ means as to each occurrence with respect to which
    insurance is afforded under this policy:
    119
    E.g., JA3721-22 (emphasis added).
    120
    Excess Insurers Op. Br. 43 (quoting Am. Safety Indem. Co. v. 612 Realty LLC, 
    2009 WL 2407822
    , at *5 (N.Y. Sup. Ct. Aug. 4, 2009)) (internal quotation marks omitted).
    121
    Id. at 43-44 (footnote omitted).
    122
    JA3721.
    41
    (1) if any underlying policy is also applicable or would be applicable
    but for breach of policy conditions; the relevant ―each person‖,
    ―each accident‖, ―each occurrence‖ or similar limit of liability
    stated therein (less any reduction thereof by reason of an over-
    riding aggregate limit of liability) plus all amounts payable under
    other insurance, if any;
    (2) if any underlying policy otherwise applicable is inapplicable by
    reason of exhaustion of an aggregate limit of liability; all
    amounts payable under other insurance, if any . . . .123
    ―For purpose of determining the retained limit,‖ Section V states that ―‗other insurance‘
    means any other valid and collectible insurance (except under an underlying policy)
    which is available to the Insured, or would be available to the Insured in the absence of
    this policy . . . .‖124 The definition of ―retained limit‖ continues by observing that ―the
    intention‖ of the policy is that it ―shall not apply under or contribute with‖ such other
    ―valid and collectible‖ insurance.125
    The plain language of the Liberty umbrella policies suggests that the policies were
    intended to provide coverage ―if any underlying policy . . . [was] inapplicable by reason
    of exhaustion.‖126 The Liberty umbrella policies were purchased to provide coverage in
    123
    JA3723.
    124
    JA3723.
    125
    JA3723. Throughout this litigation, the Excess Insurers have relied upon Pergament
    Distributors, Inc. v. Old Republic Insurance Company, 
    128 A.D.2d 760
     (N.Y. App. Div. 1987),
    in support of their contention that the terms ―covered‖ and ―not covered‖ refer ―to whether the
    policy insures against a certain risk[,] not whether the insured can collect on an underlying
    policy.‖ Viking Pump III, 
    2013 WL 7098824
    , at *23 (alteration in original) (citation omitted)
    (internal quotation marks omitted). The Superior Court rejected the Excess Insurers‘ argument,
    reasoning that ―[t]he policy discussed in Pergament differs, however, from the Liberty[] policies
    here. Pergament examined a policy‘s language to determine whether an umbrella policy must
    drop down to provide primary coverage where the primary carrier was insolvent. Moreover,
    Pergament, itself, is limited to the policy ‗at bar,‘ in that case‘s context.‖ 
    Id.
     (citations omitted).
    On that basis, the Superior Court concluded that Pergament was inapposite. We agree.
    126
    JA3723.
    42
    excess of any exhausted primary coverage. A reading of ―covered‖ to refer to whether
    the primary policy provides coverage, and not whether it is collectible, distorts the actual
    purpose of the Liberty umbrella policies. Even assuming, arguendo, the terms ―covered
    under‖ and ―not covered‖ are ambiguous,127 the jury found that that Liberty‘s umbrella
    policies maintain defense obligations.128 The Jury Verdict Form asked the jury: ―Did
    Plaintiffs prove that Liberty was obligated under its umbrella policies to pay defense
    costs for asbestos claims once the underlying Liberty primary policies were
    exhausted?‖129 The jury answered in the affirmative.130 Thus, in the context of this
    multi-layered, comprehensive insurance coverage program, and considering the general
    127
    The policy associates the term ―cover‖ both with risks assumed by the insurer and with
    payment obligations maintained by the insured. Compare JA3721 (―With respect to personal
    injury, property damage or advertising injury or damage covered under this policy . . . but not
    covered under any underlying policy or any other insurance . . . .‖) (emphasis added), with 
    id.
    (―which would be covered but for the Insured‘s retention‖) (emphasis added). But, in other
    instances, the policy uses the term ―payable under‖ when referencing funds available pursuant to
    underlying policies or other valid and collectible insurance. For example, the policy defines
    ―defense expenses‖ as follows:
    ―defense expenses‖ means all reasonable expenses (other than the amount
    of any settlement) incurred by the named insured in discharging the named
    insured‘s obligations in Section II with respect to investigation, defense or
    settlement of claims or suits, except . . . any such expenses payable under
    an underlying policy or any other valid and collectible insurance.
    JA3722 (emphasis added). Under New York law, if we were to conclude that the Liberty
    umbrella policies were ambiguous, that ambiguity must be resolved in favor of the insured.
    Viking Pump V, 52 N.E.3d at 1151 (quoting Dean, 979 N.E.2d at 1145) (―[A]mbiguities in an
    insurance policy are to be construed against the insurer[.]‖).
    128
    Notably, Warren observes, and the Excess Insurers acknowledge, that Liberty has defended
    the asbestos claims at issue in this case. The Superior Court‘s ruling is consistent with Liberty‘s
    own application of the umbrella policies for more than two decades. Regardless of this extrinsic
    evidence, the plain language of the umbrella policies compels the conclusion that the insurer has
    defense obligations.
    129
    JA1481.
    130
    Id.; see also Viking Pump III, 
    2013 WL 7098824
    , at *24.
    43
    purpose of the Liberty umbrella policies, the reasonable expectation of the average
    insured would be that ―covered under‖ concerns whether the underlying insurance is
    collectible.131   We affirm the Superior Court‘s conclusion that Liberty has defense
    obligations under its umbrella policies.
    ii.    Liberty’s Defense Obligations under Its Umbrella Policies Are Paid in Addition to
    Policy Limits
    The Liberty umbrella policies unambiguously provide that Liberty has a duty to
    pay defense costs in addition to policy limits.                As set forth above, under
    ―INVESTIGATION,            DEFENSE,          SETTLEMENT,            ASSISTANCE            AND
    COOPERATION,‖ the umbrella policies provide that Liberty will pay defense costs and
    that such costs ―are not subject to the insured‘s retention . . . and are payable by the
    company in addition to the applicable limit of liability of this policy.‖132 Thus, the
    underlying policies require Liberty to pay defense costs in addition to the applicable
    policy limits. Consequently, as the Superior Court held, the Excess Policies that are truly
    follow form or follow form by endorsement have a corresponding duty to pay defense
    costs in addition to the relevant policy limits.133
    131
    See Jefferson Ins. Co. of N.Y., 703 N.E.2d at 1226 (quoting Graphic Arts Mut. Ins. Co., 382
    N.E.2d at 1350) (noting that ―an insurance policy should be read in light of the role it is to
    play‖); Viking Pump V, 52 N.E.3d at 1151 (quoting Dean, 979 N.E.2d at 1145) (stating that the
    language of insurance contracts must be interpreted ―consistent with the reasonable expectation
    of the average insured‖).
    132
    JA3721-22 (emphasis added).
    133
    The Superior Court found that the Excess Policies that truly followed form and followed form
    by endorsement had full defense obligations in addition to the policy limits. Viking Pump III,
    
    2013 WL 7098824
    , at *24-25. Those included the following eight policies: Fidelity Policy No.
    SRX1889565; National Union Policy No. 9601115; Commercial Union Policy No. CY9502120;
    Republic Policy No. CDE0835; Vanguard Policy No. CDE1462; Puritan Policy No. ML652652;
    and Aetna Policy Nos. 06XN243WCA and 06XN194WCA. Without reference to specific policy
    44
    iii.    The Group One Policies Pay Defense Costs Within Policy Limits
    The Group One policies contain what the Superior Court referred to as ―coverage‖
    and ―conditions‖ provisions.134       The relevant provisions in each of the Group One
    policies are substantially similar to the following:
    I. COVERAGE
    The Company hereby agrees, subject to the limitations, terms and
    conditions hereinafter mentioned, to indemnify the insured for all sums
    which the insured shall be obligated to pay by reason of the liability . . . (a)
    imposed upon the insured by law or (b) assumed under contract or
    agreement by the Named Insured . . . for damages, direct or consequential
    and expenses on account of . . . (i) Personal injuries . . . caused by or arising
    out of each occurrence . . . and arising out of the hazards covered by and as
    defined in the Underlying Umbrella Policies . . . .
    II. LIMIT OF LIABILITY – UNDERLYING LIMITS
    It is expressly agreed that liability shall attach to the Company only after
    the Underlying Umbrella Insurers have paid or have been held liable to pay
    the full amount of their respective ultimate net loss liability . . . and the
    Company shall then be liable to pay only the excess thereof up to a further
    [specified monetary sum] ultimate net loss in all in respect of each
    occurrence – subject to a limit of [a specified monetary sum] in the
    language, the Excess Insurers argue that each of these policies—excluding the Aetna policies—
    has no defense obligation. Excess Insurers Op. Br. 43-44 n.9. Because we conclude that Liberty
    maintains defense obligations under its umbrella policies, we reject this contention. Cf. Excess
    Insurers‘ Mem. of Law in Support of their Renewed Mot. for J. as a Matter of Law Pursuant to
    R. 50(b) at 25, Viking Pump, Inc. v. Century Indem. Co. (No. N10C-06-141 FSS) (Jan. 31, 2013)
    [hereinafter ―Excess Insurers JMOL Mem. at JA____‖], available at JA1550-95 (―A few Excess
    Policies do not contain defense carve-outs and therefore follow form to the Liberty umbrella
    policy defense obligations.‖) (citations omitted).
    134
    See Viking Pump III, 
    2013 WL 7098824
    , at *25-26. The Group One policies include Central
    National Insurance Company of Omaha Policy Nos. CNZ141951 and CNZ141989; Century
    Indemnity Company Policy No. CIZ425741; First State Policy Nos. FB000022 and 929817;
    Granite State Policy No. 62790163; Old Republic Policy No. OZX11405; Puritan Policy No.
    ML651258; and Lexington Policy Nos. GC403427 and CE5503312. We conclude, however,
    that the analysis applicable to the Group Four policies—not the Group One policies—is
    applicable to Lexington Policy No. CE5503312. Further, the First State policies are not before
    this Court, as the disputes concerning those policies settled since the Superior Court‘s decision.
    45
    aggregate for each annual period during the currency of this Policy . . .
    separately in respect of Personal Injury (fatal or non-fatal) by Occupational
    Disease sustained by any employees of the insured.
    CONDITIONS
    *      *       *
    2. MAINTENANCE OF UNDERLYING UMBRELLA INSURANCE
    This Policy is subject to the same terms, definitions, exclusions and
    conditions (except as regards the premium, the amount and limits of
    liability and except as otherwise provided herein) as are contained in or as
    may be added to the Underlying Umbrella Policies . . . prior to the
    happening of an occurrence for which claim is made hereunder.135
    Concluding that these policies covered defense costs, the Superior Court found
    that the Group One policies paid expenses subject to policy limitations, ―meaning
    aggregate limits.‖136     The Superior Court relied principally upon the Maintenance
    Provision in holding that the Group One policies pay defense costs within policy limits.
    Warren contends that the ―amount and limits‖ language in the Maintenance
    Provisions of the Group One policies ensures only that each such policy has its own
    stated limits, without reference to the type (e.g., ―each occurrence‖ or ―aggregate‖) or
    amount of the underlying policy limits. Warren argues further that, even if the Group
    One policies did not incorporate Liberty‘s obligation to pay defense costs in addition to
    policy limits, such policies independently provide for payment of defense costs on that
    basis. The Excess Insurers urge that the Group One policies pay defense costs within
    135
    JA3746 (emphasis added). For convenience, we refer to the ―coverage‖ clause and similar
    language as the ―Coverage Provision;‖ the ―limit of liability‖ clause and similar language as the
    ―Limit of Liability Provision;‖ and the ―maintenance of underlying umbrella insurance‖ clause
    and similar language as the ―Maintenance Provision.‖
    136
    Viking Pump III, 
    2013 WL 7098824
    , at *25.
    46
    policy limits, to the extent that such policies cover defense costs at all. Before the
    Superior Court, however, the Excess Insurers conceded that the Group One policies
    ―have limited obligations to reimburse defense costs within limits for covered damages
    only.‖137
    Under New York law, ―whenever an insurer wishes to exclude certain coverage
    from its policy obligations, it must do so ‗in clear and unmistakable‘ language.‖138 In
    order to be enforced, ―exclusions or exceptions from policy coverage must be specific
    and clear . . . .‖139 ―They are not to be extended by interpretation or implication, but are
    to be accorded a strict and narrow construction.‖140 The insurer bears the burden of
    ―establishing that the exclusions or exemptions apply in the particular case, and that they
    are subject to no other reasonable interpretation.‖141           Accordingly, ―[i]f there is
    uncertainty concerning its meaning, a policy is construed to embrace coverage.‖142
    We agree with the Superior Court‘s ultimate conclusion that the Group One
    policies pay within policy limits, but find instead that the more pertinent limitation is
    contained in the Coverage Provision of such policies. The Group One policies limit the
    scope of indemnification for damages and expenses, making them subject to the policy
    137
    Excess Insurers JMOL Mem. at JA1583 (emphasis removed).
    138
    Seaboard Sur. Co. v. Gillette Co., 
    476 N.E.2d 272
    , 275 (N.Y. 1984) (quoting Kratzenstein v.
    W. Assurance Co., 
    22 N.E. 221
    , 223 (N.Y. 1889)) (citation omitted).
    139
    
    Id.
    140
    
    Id.
     (citations omitted).
    141
    
    Id.
     (internal citations omitted).
    142
    Avondale Indus., Inc. v. Travelers Indem. Co., 
    887 F.2d 1200
    , 1207 (2d Cir. 1989) (citations
    omitted).
    47
    limits.143   By contrast, the Liberty umbrella policies treat damages and expenses
    differently. The Liberty policies provide coverage for damages subject to limits of
    liability, but provide coverage for expenses in addition to the limits of liability.144
    Expenses on account of personal injuries caused by or arising out of each occurrence,
    under the Group One policies, are payable by the insurer, according to the Coverage
    Provision, ―subject to the limitations, terms[,] and conditions‖ of the agreement.145 Thus,
    the Group One policies speak to damages and expenses in a similar manner: Because
    indemnification for damages is limited to policy limits, so too are all sums payable for
    expenses.146 Accordingly, the Coverage Provision contained in the Group One policies
    makes clear that the parties intended that the insurer would, within the limits specified by
    the policy, indemnify the insured for both damages and expenses as they relate to
    personal injury claims.
    We do not find persuasive Warren‘s argument that the use of the term ―ultimate
    net loss‖ in the Group One policies independently requires payment of expenses in
    addition to the relevant policy limits. Warren contends that ―ultimate net loss‖ is not
    defined, and the policies do not otherwise state that expenses fall within ―ultimate net
    loss.‖ As used in the Group One policies, the undefined term ―ultimate net loss‖ does not
    create an independent duty to pay defense expenses outside the policy limits. Rather, the
    Group One policies employ ―ultimate net loss‖ to establish a limit that the insurer is
    143
    See, e.g., JA3746.
    144
    See, e.g., JA3722.
    145
    See, e.g., JA3746.
    146
    See, e.g., JA3746 (―damages, direct or consequential and expenses on account of (i) Personal
    injuries . . . .‖) (emphasis added).
    48
    obligated to pay, and such limit is inclusive of expenses. The Group One policies fail to
    exclude defense costs from the limit of covered ultimate net loss.
    The Superior Court‘s conclusion that the Group One policies pay defense costs
    within policy limits is affirmed.
    iv.    The Group Two Policies Pay Defense Costs Within Policy Limits
    The four London policies constituting Group Two utilize ―assistance and
    cooperation‖ clauses.147 The relevant provisions in each of the Group Two policies are
    substantially similar to the following:
    I. COVERAGE
    Underwriters hereby agree, subject to the limitations, terms and conditions
    hereinafter mentioned, to indemnify the Assured for ultimate net loss which
    the Assured may sustain by reason of the liability imposed upon the
    Assured by law, or assumed by the Assured under contract for damages on
    account of: (a) Personal Injury Liability . . . Arising out of the hazards
    covered by and as defined in the Underlying Umbrella Policy issued by the
    Liberty Mutual Insurance Company . . . .
    II. LIMIT OF LIABILITY – UNDERLYING LIMIT
    It is expressly agreed that liability shall attach to the Underwriters only
    after the Underlying Umbrella Insurers have paid or have been held liable
    to pay the full amount of their respective ultimate net loss liability . . . and
    the Underwriters shall then be liable to pay only the excess thereof up to a
    further [specified monetary sum] ultimate net loss in all respect of each
    occurrence – subject to a limit of [a specified monetary sum] in the
    aggregate for each annual period during the currency of this Policy in
    respect of each hazard insured with an aggregate limit in the Underlying
    Umbrella Policy.
    CONDITIONS
    1. MAINTENANCE OF UNDERLYING UMBRELLA INSURANCE
    147
    The policies constituting Group Two include London Policy Nos. CX5026, K24961,
    UGL0160, and UGL0162.
    49
    This Policy is subject to the same terms, definitions, exclusions and
    conditions (except as regards the premium, the amount and limits of
    liability, and except as otherwise provided herein) as are contained in or as
    may be added to the said Underlying Umbrella Policy prior to the
    happening of an occurrence for which claim is made hereunder.
    *      *       *
    3. ASSISTANCE AND COOPERATION OF THE ASSURED148
    The Underwriters shall not be called upon to assume charge of the
    settlement of defense of any claim made, suit brought or proceeding
    instituted against the Assured but the Underwriters shall have the right and
    shall be given the opportunity to associate with the Assured or the
    Assured‘s underlying insurers, or both, in the defense and control of any
    claim, suit or proceeding relative to an occurrence where the claim or suit
    involves or appears reasonably likely to involve the Underwriters, in which
    event the Assured and the Underwriters shall cooperate in all things in the
    defense of such claim, suit or proceeding.149
    148
    For convenience, we refer to the ―assistance and cooperation‖ clause and similar language as
    the ―Assistance Provision.‖
    149
    See, e.g., JA2395-96. The Excess Insurers state that the Group Two policies provide as
    follows: ―The [insurers] shall not be called upon to assume charge of the settlement or defense
    of any claim made, suit brought or proceeding instituted against the insured . . . .‖ See Excess
    Insurers Op. Br. 46 (emphasis in original and removed) (alterations in original and added).
    However, the Assistance Provisions incorporated in all of the Group Two policies provide that
    the insurers ―shall not be called upon to assume charge of the settlement of defense of any claim
    made, suit brought or proceeding instituted against the Assured . . . .‖ E.g. JA2396. Based upon
    our independent review of the Excess Policies, we also observe that at least one additional
    policy, London Policy No. 881/UHL0395, provides that ―[t]he Underwriters shall not be called
    upon to assume charge of the settlement of defense of any claim made, suit brought or
    proceeding instituted against the Assured . . . .‖ JA3073 (emphasis added).
    The Superior Court apparently assumed the word ―of‖ should have been ―or,‖ as it quoted
    the relevant language as ―assume charge of the settlement of [sic] defense . . . .‖ Viking Pump
    III, 
    2013 WL 7098824
    , at *26. None of the briefing addressed whether the Group Two policies
    contain a typographical error in the phrase ―settlement of defense.‖ Both the parties and the
    Superior Court have treated the Group Two policies as if they contain the phrase ―settlement or
    defense,‖ and we decline to proceed on an alternative basis in the first instance. We sympathize
    with the Superior Court in its review of each of the Excess Policies in this matter—the poor
    quality of the reproductions and voluminous record have complicated the review process for this
    Court as well.
    50
    In view of the Maintenance Provisions contained in the Group Two policies, the
    Superior Court held that such clauses limited defense costs to within policy limits.
    Warren challenges this holding and relies upon its arguments asserted with respect to
    Group One.      Warren contends that Group Two Maintenance Provisions function to
    ensure only that each such policy has its own stated limits and that those provisions do
    not alter the Excess Insurers‘ obligation to provide coverage for the same risks in the
    same manner as the underlying insurer. Warren also asserts that the Group Two policies
    independently provide for payment of defense costs in addition to policy limits.
    The Excess Insurers raise two arguments with respect to the Group Two policies.
    First, they contend that the Group Two policies clearly disclaim coverage for defense
    costs.150 Second, the Excess Insurers urge that the policies follow form to the underlying
    policies, except as regards the ―amount and limits of liability.‖
    The Group Two policies follow form to the underlying umbrella policies,
    maintaining both a duty to defend and a duty to pay defense expenses absent clear
    contradictory language. The Group Two Excess Insurers opted out of any duty to
    150
    The Excess Insurers rely upon In re September 11th Liability Insurance Coverage Cases, 
    458 F. Supp. 2d 104
     (S.D.N.Y. 2006), for the proposition that the Group Two policies disclaim
    coverage of defense costs. There, certain excess policies incorporated standard forms absolving
    them of the obligation to provide a defense, and, as discovery established, the underlying
    primary and umbrella carriers (to which they followed form) had refused to provide defense cost
    coverage in the absence of adequate loss history data. The court found that the evidence was
    overwhelming that Zurich (provider of the primary and umbrella policies) refused, in the absence
    of adequate loss history, to issue a policy that included defense cost coverage. In re Sept. 11th
    Liab. Ins. Coverage Cases, 
    458 F. Supp. 2d 104
    , 199, 121 (S.D.N.Y. 2006). We agree with the
    reasoning of the United States Court of Appeals for the Second Circuit in Stonewall Insurance
    Company v. Asbestos Claims Management Corporation, 
    73 F.3d 1178
     (2d Cir. 1995), modified
    on other grounds, 
    85 F.3d 49
     (2d Cir. 1996), and reject the notion that the Assistance Provisions
    in the Excess Policies ―clearly disclaim coverage for defense costs.‖ See infra note 151.
    51
    ―assume charge‖ of ―the settlement of defense of any claim‖ in the foregoing Assistance
    Provision.151 Notably, the Liberty policies treat the duty to defend and the duty to pay
    defense expenses as being separate and distinct, addressing the duties in separate portions
    of the agreement.152 Although the Excess Insurers disclaimed their duty to defend, they
    failed to effectively exclude the obligation to reimburse defense costs.153
    As to whether the Group Two policies cover defense costs within policy limits, the
    Group Two policies provide that they cover the ―ultimate net loss‖ relative to personal
    151
    See Stonewall, 73 F.3d at 1218. In Stonewall, the United States Court of Appeals for the
    Second Circuit recognized two distinct duties: the duty to defend and a duty to reimburse
    defense costs. There, a portion of the policies in question provided that the insurer would have
    the option to assume charge of the defense, but would not be obligated to do so. Id. (setting forth
    policy language providing that the insurer ―‗may, at the sole option of the company, assume
    charge of the . . . defense,‘ . . . [but] the Company shall not be obligated to assume‘ [the]
    defense‖ (alteration in original and added) (emphasis in original)). Applying Texas law, the
    Second Circuit held that while language substantially similar to that of the Assistance Provisions
    at issue in the instant matter negates the duty to defend claims, it has no impact on the duty to
    reimburse the insured for the cost of defending claims covered by the insurance policy. Id.
    (―[The insured] argues that the Texas Endorsement, while negating the duty to assume defense of
    the Texas claims, does not in any way limit the Insurers‘ obligation to reimburse defense costs
    incurred. We agree.‖). See also In re WorldCom, Inc. Sec. Litig., 
    354 F. Supp. 2d 455
    , 464 n.11
    (S.D.N.Y. 2005) (citations omitted).
    152
    E.g., JA3721-22; JA3851-52; JA3993-94; JA4108-09.
    153
    See Stonewall, 73 F.3d at 1218. The Excess Insurers rely upon M.H. Lipiner & Son, Inc. v.
    Hanover Ins. Co., 
    869 F.2d 685
     (2d Cir. 1989), for the proposition that courts applying New
    York law when interpreting assistance and cooperation clauses have found that insurers have no
    duty to defend. There, the plaintiff, a jewelry business, brought a declaratory judgment action
    that imposed a responsibility on the insurer to defend and indemnify the company following an
    alleged ―misdelivery‖ of precious stones. The United States District Court for the Southern
    District of New York concluded that the insurer ―properly relied on a specific exclusion clause in
    the insurance policy‖ when it disclaimed ―any obligation to defend or indemnify.‖ 
    Id. at 686
    .
    On appeal, the United States Court of Appeals for the Second Circuit affirmed, ―agree[ing] that
    the insurance policy in question d[id] not provide the insurance coverage claimed‖ by the
    plaintiff. 
    Id.
     The Second Circuit held that, ―[u]nder such circumstances, an insurer is entitled to
    judgment declaring that it need not defend the insured.‖ 
    Id.
     at 688 (citing Lionel Freedman, Inc.
    v. Glens Falls Ins. Co., 
    267 N.E.2d 93
    , 94 (N.Y. 1971) (―[I]f we can determine that no basis for
    recovery within the coverage of the policy is stated in the complaint, we may sustain defendant‘s
    refusal to defend.‖)). The exclusion of coverage in M.H. Lipiner distinguishes it from the facts
    of this case.
    52
    injury claims.154 The policies state that the insurers ―agree, subject to the limitations,
    terms and conditions‖ of the insurance contract, ―to indemnify the Assured for ultimate
    net loss which the Assured may sustain by reason of the liability imposed upon the
    Assured by law, or assumed by the Assured under contract for damages on account of . . .
    Personal Injury Liability . . . .‖155 The term ―ultimate net loss‖ is not defined in the
    Group Two policies. Absent a definition of the term, ―ultimate net loss‖ includes all
    sums an insurer is obligated to pay to the insured pursuant to an insurance policy, free
    from any deductions. ―Ultimate net loss,‖ in the Group Two policies, is used to establish
    a capped limit that the insurer is obligated to pay—and such limit is inclusive of expenses
    within this contractual framework. Stated otherwise, the Group Two policies do not
    exclude defense costs from the limit of covered ultimate net loss.156 The Group Two
    policies thus indicate that the parties intended that the insurer would, within the limits
    specified by the policy, indemnify the insured for expenses. Accordingly, the Superior
    Court‘s conclusion that the Group Two policies pay defense costs within policy limits is
    affirmed.
    v.     The Group Three Policies Pay Defense Costs In Addition to Policy Limits, with
    Consent of the Insurer
    154
    See, e.g., JA2395.
    155
    See, e.g., JA2395.
    156
    Compare Stonewall, 73 F.3d at 1218 (citing Home Ins. Co. v. Am. Home Prods. Corp., 
    902 F.2d 1111
    , 1113-14 (2d Cir. 1990) (holding that definition of ―ultimate net loss,‖ which was
    amended to delete reference to ―expenses,‖ ―unambiguously include[d] only damages and not
    defense costs‖)). In contrast to the undefined term ―ultimate net loss‖ in the Group Two policies,
    the defined term ―ultimate net loss‖ in the Group Four policies leads us to a different result. See
    infra at II.C.3.vi.
    53
    The Group Three policies utilize assistance, cooperation, and consent clauses
    together as an exception to their follow-form obligations, requiring the insurer‘s consent
    before the insured may obligate the insurer to provide a defense.157               The relevant
    provisions in each of the Group Three policies are substantially similar to the following:
    B. NOW, this certificate is to indemnify the Insured in accordance with the
    applicable insuring agreements, exclusions and conditions of the primary
    insurance for excess loss . . . .
    C. The insurance afforded by this certificate shall follow that of the
    primary insurance except:
    (1) anything in this certificate or the primary insurance to the contrary
    notwithstanding, [the insurer] shall not be obligated to assume charge of the
    settlement or defense of any claim or suit brought or proceeding instituted
    against the Insured, but [the insurer] shall have the right and be given the
    opportunity to associate with the Insured in the defense or control of any
    claim, suit or proceeding which appears reasonably likely to involve [the
    insurer], in which event the Insured and [the insurer] shall cooperate in all
    things in the defense or control of such claim, suit or proceeding, but no
    obligation shall be incurred on behalf of [the insurer] without its consent
    being first obtained . . . ; (2) the insurance afforded by this certificate shall
    not apply to any expenses for which insurance is provided in the primary
    insurance . . . . 158
    The Superior Court found that the Group Three policies follow form to the
    underlying Liberty policies. But it concluded that the Group Three policies do not create
    a duty for the Excess Insurers to ―lead the defense,‖ and that they instead enable the
    insurers to ―affiliate‖ with the defense. Further, the Superior Court determined that these
    157
    The Group Three policies include: California Union Policy No. ZCX003889; INA Policy
    Nos. XCP156562 and XCP145194; and Lexington Policy No. 5510143. We conclude, however,
    that the analysis applicable to the Group Four policies—not the Group Three policies—is
    applicable to Lexington Policy No. 5510143.
    158
    See, e.g., JA4421. For convenience, we refer to the clause requiring the insurer‘s consent and
    similar language as the ―Consent Provision.‖ We note that the Group Three policies, in contrast
    to the Group Two policies, use the phrase ―assume charge of the settlement or defense . . . .‖
    54
    policies do not exempt the Excess Insurers from paying ―defense costs upon the
    primary‘s exhaustion. The ‗associate‘ and ‗consent‘ clauses are otherwise silent as to
    defense costs.‖159 The Superior Court held that while the Group Three policies ―clearly
    state[ that] the insurer shall not incur an obligation without its consent, and that its
    insurance does not cover costs provided by someone else, the policy does not ‗clearly and
    unmistakably‘ exclude defense costs, especially after the primary‘s exhausted.‖160
    Nevertheless, as to the Group Three policies, the Superior Court ultimately concluded
    that they cover ―reasonable defense costs‖ within the policy‘s applicable limits.161
    Warren contends that the Group Three policies contain independent language that
    confirms the existence of a defense payment obligation and omit any language negating
    their follow-form defense payment obligations. The Excess Insurers respond by arguing
    that each of the Group Three policies ―explicitly provides that it does not cover defense
    costs at all‖ and that the argument advanced by Warren is ―beside the point.‖162
    159
    Viking Pump III, 
    2013 WL 7098824
    , at *27.
    160
    
    Id.
     (citing Breed v. Ins. Co. of N. Am., 
    385 N.E.2d 1280
    , 1282 (N.Y. 1978)) (―Well
    recognized is the general rule that ambiguities in an insurance policy are to be construed against
    the insurer, particularly when found in an exclusionary clause.‖ (citation omitted))).
    161
    Id. at *28.
    162
    Excess Insurers Ans. Br. 49. The Excess Insurers argue that California Union Policy No.
    ZCX003889 ―expressly disclaim[s] any duty to provide defense costs.‖ Excess Insurers Op. Br.
    44, 44 n.10. That argument is undermined by the policy‘s terms, which provide:
    [T]he Company shall not be obligated to assume charge of the settlement or
    defense of any claim or suit brought or proceeding instituted against the insured,
    but the Company shall have the right and be given the opportunity to associate
    with the insured in the defense or control of any claim, suit or proceeding which
    appears reasonably likely to involve the Company, in which event the insured and
    the Company shall cooperate in all things in the defense or control of such claim,
    suit or proceeding, but no obligation shall be incurred on behalf of the Company
    without its consent first being obtained . . . .
    55
    The Consent Provisions in the Group Three policies modify the duty to defend,
    making it a right or option to defend. These Excess Policies state that ―no obligation
    shall be incurred on behalf of [the insurer] without its consent being first obtained . . . .‖
    The Group Three policies, however, do not define the term ―obligation.‖ We believe
    that, under New York law, an insurer‘s duty to pay defense costs and its duty to defend
    are separate and distinct.163 A duty requiring an insurer to pay costs, including defense
    costs, may properly be understood as an ―obligation.‖164 Ultimately, the Group Three
    policies fail to exclude coverage for defense costs using clear and unmistakable language,
    and follow form to the underlying Liberty policies.
    The Group Three policies are silent with respect to whether payment of defense
    costs erodes policy limits. This ambiguity is to be resolved against the insurer, and the
    JA3622. The policy provides further that ―the insurance afforded by this Certificate shall [not]
    apply to any expenses for which insurance is provided in the [primary] insurance . . . .‖ Id.
    None of the foregoing policy language expressly disclaims the duty to pay defense costs. We
    also reject the Excess Insurers‘ contention that INA Policy Nos. XCP145194 and XCP15652
    expressly disclaim any duty to pay defense costs, as those policies employ provisions
    functionally identical to those in California Union Policy No. ZCX003889. See JA4165;
    JA4421.
    163
    See In re WorldCom, Inc. Sec. Litig., 354 F. Supp. at 464 n.11 (―In contrast to a duty to pay
    defense costs, the duty to defend customarily includes an insurer‘s right to choose the attorney
    and control the litigation strategy.‖ (citations omitted)). This Court has not identified—and the
    parties do not cite—a decision of the New York Court of Appeals making plain that the duty to
    defend and the duty to pay defense costs are two distinct obligations. We believe, however, that
    the New York Court of Appeals, like the courts of other jurisdictions, would embrace this notion.
    See, e.g., Stonewall, 73 F.3d at 1218 (applying Texas law). Regardless, the Excess Policies
    generally follow form to the underlying Liberty umbrella policies, which policies contain distinct
    duties to defend and to pay costs in separately numbered paragraphs. See, e.g., JA3721-22.
    164
    BLACK‘S LAW DICTIONARY (10th ed. 2014) (―obligation‖) (―1. A legal or moral duty to do or
    not do something. . . . 2. A formal, binding agreement or acknowledgement of a liability to pay
    a certain amount or to do a certain thing for a particular person or set of persons; esp., a duty
    arising by contract.‖).
    56
    Group Three policies therefore incorporate the default follow-form duty to pay defense
    costs as reflected in the underlying policies. Consequently, the Group Three policies pay
    defense costs in addition to policy limits. But, as a result of the clause setting forth that
    ―no obligation shall be incurred on behalf of [the insurer] without its consent being first
    obtained[,]‖165 the duties to defend and pay are made contingent upon consent.166
    The Superior Court‘s conclusion that the Group Three policies have a duty to pay
    defense costs is affirmed, but its decision that these payments erode policy limits is
    reversed. Instead, we conclude that the Excess Insurers have a duty to pay defense costs,
    contingent upon consent, and that such costs must be paid in addition to policy limits.
    vi.    The Group Four Policies Generally Exclude Defense Costs Except Upon Written
    Consent of the Insurer
    Each of the Group Four policies provides that the insurer will indemnify the
    insured for the ―ultimate net loss‖ resulting from personal injuries.167 The relevant
    provisions in the Group Four policies are substantially similar to the following:
    165
    See, e.g., JA4421.
    166
    See Stonewall, 73 F.3d at 1219.
    167
    The Group Four policies include Lexington Policy No. CE5504779 and London Policy Nos.
    K25878; 881/UHL0395; 881/UKL0340; 881/UKL0341; and 881/UKL0342. As to the Coverage
    Provisions in the Group Four policies, each such insurance contract employs substantially
    identical language, with the exception of London Policy No. K25878. While the remaining
    Group Four policies ―indemnify the Assured for ultimate net loss,‖ London Policy No. K25878
    provides that the insurer will ―indemnify the Assured for all sums which the Assured shall be
    obligated to pay by reason of the liability imposed upon the Assured by law, or assumed by the
    Assured under contract for damages on account of: (a) Personal Injury Liability . . . .‖ JA2595.
    The policy contains the same definitions of ―ultimate net loss‖ and ―costs‖ that appear in the
    other Group Four policies. The parties do not argue that the analysis for Policy No. K25878
    should differ from that applicable to the other Group Four policies. Accordingly, we treat it
    within our analysis of the Group Four policies. Further, as set forth above, Lexington Policy No.
    CE5503312 is also included among the Group Four policies. We also separately address
    Lexington Policy No. CE5504779 below.
    57
    I. COVERAGE
    Underwriters hereby agree, subject to the limitations, terms and conditions
    hereinafter mentioned, to indemnify the Assured for ultimate net loss which
    the Assured may sustain by reason of the liability imposed upon the
    Assured by law, or assumed by the Assured under contract for damages on
    account of: (a) Personal Injury Liability . . . Arising out of the hazards
    covered by and as defined in the Underlying Umbrella Policies issued by
    the Liberty Mutual Insurance Company, Underwriters at Lloyd‘s, London,
    and certain Insurance Companies . . . .
    II. LIMIT OF LIABILITY – UNDERLYING LIMITS
    It is expressly agreed that liability shall attach to the Underwriters only
    after the Underlying Umbrella Insurers have paid or have been held liable
    to pay the full amount of their respective ultimate net loss liability . . . and
    the Underwriters shall then be liable to pay only the excess thereof up to a
    further [specified monetary sum] ultimate net loss in all in respect of each
    occurrence – subject to a limit of [a specified monetary sum] in the
    aggregate for each annual period during the currency of this Policy in
    respect of each hazard insured with an aggregate limit in the Underlying
    Umbrella Policies.
    DEFINITIONS
    1. ULTIMATE NET LOSS
    The words ―ultimate net loss‖ shall be understood to mean the amount
    payable in settlement of the liability of the Assured after making deductions
    for all recoveries and for other valid and collectible insurances, excepting
    however the policies of the Underlying Insurers, and shall exclude all
    expenses and Costs.
    2. COSTS
    The word ―Costs‖ shall be understood to mean interest accruing after entry
    of judgment, investigation, adjustment and legal expenses (excluding,
    however, all office expenses of the Assured, all expenses for salaried
    employees of the Assured and general retainer fees for counsel normally
    paid by the Assured).
    CONDITIONS
    1. INCURRING OF COSTS
    58
    In the event of claim or claims arising which appear likely to exceed the
    Underlying Limit, no Costs shall be incurred by the Assured without the
    written consent of the Underwriters.
    *      *       *
    3. MAINTENANCE OF UNDERLYING UMBRELLA INSURANCE
    This Policy is subject to the same terms, definitions, exclusions and
    conditions (except as regards the premium, the amount and limits of
    liability and except as otherwise provided herein) as are contained in or
    may be added to the said Underlying Umbrella Policies prior to the
    happening of an occurrence for which claim is made hereunder.
    *      *       *
    4. ASSISTANCE AND COOPERATION OF THE ASSURED
    The Underwriters shall not be called upon to assume charge of the
    settlement of defense of any claim made, suit brought or proceeding
    instituted against the Assured but the Underwriters shall have the right and
    shall be given the opportunity to associate with the Assured or the
    Assured‘s underlying insurers, or both, in the defense and control of any
    claim, suit or proceeding relative to an occurrence where the claim or suit
    involves or appears reasonably likely to involve the Underwriters, in which
    event, the Assured and the Underwriters shall cooperate in all things in the
    defense of such claim, suit or proceeding.168
    The Superior Court held that the Group Four policies require the Excess Insurers
    to pay defense costs in addition to policy limits. The Excess Insurers raise two arguments
    with respect to the Group Four policies. First, the Excess Insurers contend that the
    Assistance Provisions give the insurer the right, but not the obligation, to assume the
    168
    See, e.g., JA3071-73. The Assistance Provisions in the Group Four policies only eliminate
    the duty to defend, giving the insurer the option to join the defense of the insured. They do not
    exclude the duty to pay defense costs. Accordingly, we also reject any argument that the
    Assistance Provisions in the following policies disclaim responsibility to pay defense costs:
    Lexington Policy No. 5510143; California Union Policy No. ZCX003889; International Policy
    Nos. 5220113076, 5220282357, and 5220489339; and INA Policy Nos. XCP145194 and
    XCP156562. See Excess Insurers Op. Br. 46.
    59
    defense. Second, the insurers assert that the Group Four policies define ―ultimate net
    loss‖ to exclude all expenses and ―Costs‖ and that the policies define ―Costs‖ as ―interest
    accruing after entry of judgment, investigation, adjustment and legal expenses . . . .‖
    Warren urges that the Assistance Provisions do not negate the obligation to pay
    defense costs, and that the duty to conduct the defense is separate and apart from the duty
    to fund that defense. Further, Warren argues that both the jury and the Superior Court
    correctly held that the Excess Policies that exclude costs or expenses from the definition
    of ―ultimate net loss‖ or ―loss‖ do not negate the Excess Insurers‘ promise to follow form
    to the Liberty defense payment obligation.
    The Group Four policies state that they are ―subject to the same terms, definitions,
    exclusions and conditions (except as regards the premium, the amount and limits of
    liability and except as otherwise provided herein) as are contained in or as may be added
    to the said Underlying Umbrella Policies . . . .‖169 They further provide that the Excess
    Insurers are liable to pay only amounts in excess of the underlying insurers‘ ultimate net
    loss liability ―up to a further [specified monetary sum] ultimate net loss in all in respect
    of each occurrence – subject to a limit of [a specified monetary sum] in the aggregate for
    each annual period during the currency of this Policy in respect of each hazard insured
    with an aggregate limit in the Underlying Umbrella Policies.‖170 As previously observed,
    the Group Four policies define the term ―ultimate net loss‖ to exclude expenses and
    ―[c]osts,‖ which, in turn, includes ―interest accruing after entry of judgment,
    169
    See, e.g., JA3073 (emphasis added).
    170
    See, e.g., JA3071.
    60
    investigation, adjustment and legal expenses (excluding, however, all office expenses of
    the Assured, all expenses for salaried employees of the Assured and general retainer fees
    for counsel normally paid by the Assured).‖171
    The New York Court of Appeals has emphasized that when interpreting insurance
    policies, a reviewing court ―must construe the policy in a way that affords a fair meaning
    to all of the language employed by the parties in the contract and leaves no provision
    without force and effect.‖172 Read as a whole and giving effect to the Maintenance and
    Limit of Liability Provisions,173 the Group Four policies use the term ―ultimate net loss‖
    to mean that the insurer is liable to the insured only for those losses that fall within the
    definition of ―ultimate net loss.‖174 And ―ultimate net loss‖ unambiguously excludes
    defense costs from the insurer‘s indemnity obligations.175             We conclude that these
    171
    See, e.g., JA3072 (emphasis added).
    172
    Viking Pump V, 52 N.E.3d at 1151 (quoting Roman Catholic Diocese of Brooklyn v. Nat’l
    Union Fire Ins. Co. of Pittsburgh, Pa., 
    991 N.E.2d 666
    , 671-72 (N.Y. 2013)) (internal quotation
    marks omitted).
    173
    See Home Ins., 
    902 F.2d at 1113
     (―As the plain language of the [second-level excess] policy
    makes clear, however, the [second-level excess] policy follows the terms of the [first-level]
    excess policy only to the extent that the [first-level] policy is consistent with the [second-level]
    policy. The [second-level excess] policy states that it is ‗subject to the same warranties, terms
    and conditions (except as otherwise provided herein) as are contained in . . . the [u]nderlying
    [c]overage . . . .‖ (emphasis in original) (alterations in original and added)).
    174
    Maryland Cas. Co. v. W.R. Grace & Co., 
    1996 WL 306372
    , at *9 (S.D.N.Y. June 7, 1996).
    175
    Home Ins., 
    902 F.2d at 1113-14
    ; see also Stonewall, 73 F.3d at 1218 (―The original insuring
    agreement required the insurers to indemnify [the insured‘s] ‗ultimate net loss,‘ including
    damages and expenses that [the insured] became obligated to pay. The ‗New York Amendatory
    Endorsement‘ amended the definition of ‗ultimate net loss‘ in the insuring agreement by deleting
    the reference to ‗expenses.‘ Notwithstanding [the insured‘s] efforts in the District Court and on
    appeal to rely on the legislative history of the New York Amendatory Endorsement, the District
    Court properly found that the term ‗ultimate net loss,‘ as amended, unambiguously includes only
    damages and not defense costs.‖ (citing Home Ins., 
    902 F.2d at 1113-14
    )).
    In Home Insurance, the United States Court of Appeals examined policy language similar
    to that of the Group Four policies. There, a second-level excess insurer provided insurance for
    61
    policies exclude an obligation to pay defense costs, except upon written consent. In so
    holding, we give effect to the express differences in the defined term ―ultimate net
    loss[,]‖ which excludes expenses and costs.            These differences lead to a different
    outcome from policies that do not define the term ―ultimate net loss.‖
    The Group Four policies generally follow form to the underlying insurance and are
    silent as to whether defense costs incurred with consent of the insurer erode policy limits.
    This ambiguity is to be resolved against the insurers.176 The policies pay defense costs in
    addition to policy limits, but only upon written consent of the insurers. The Superior
    Court‘s conclusion that the Group Four policies provide coverage for defense costs is
    reversed.
    vii.    The International Policies Cover Defense Costs in Addition to Policy Limits, with
    Consent of the Insurer
    The Excess Insurers challenge the Superior Court‘s ruling in its second post-trial
    decision regarding three Excess Policies issued by the International Insurance Company
    ―bodily injury in excess of that provided by the [first-level] excess policy, up to $11.5 million
    ultimate net loss. ‗Ultimate net loss‘ [wa]s defined under the policy as ‗the amount payable in
    settlement of the liability of [the insured] . . . exclud[ing] all expenses and Costs.‘‖ Home Ins.,
    
    902 F.2d at 1113
     (emphasis in original) (alterations in original and added). Further, ―Costs‖ was
    defined as ―interest accruing after entry of judgment, investigation, adjustment and legal
    expenses (excluding, however, all office expenses of [the insured], all expenses for salaried
    employees of [the insured] and general retainer fees for counsel normally paid by [the insured]).‖
    
    Id.
     (internal quotation marks omitted). The Court of Appeals for the Second Circuit agreed with
    the insurer‘s ―interpretation that post-judgment interest and legal expenses (in particular outside
    counsel fees) [we]re excluded under the plain language of the policy.‖ 
    Id. at 1114
    .
    176
    See Stonewall, 73 F.3d at 1216-17 (―Stonewall‘s policies are silent on the consequences of
    cancellation, making this another ambiguity to be resolved against the insurer.‖ (citations
    omitted)).
    62
    (the ―International Policies‖).177 The International Policies ―apply in like manner as the
    underlying insurance,‖ ―except with respect to . . . any obligation to investigate or defend
    any claim or suit[.]‖178 The three policies also contain Assistance Provisions, which
    provide:
    The company shall not be called upon to assume charge of the settlement or
    defense of any claim made or proceeding instituted against the insured; but
    the company shall have the right and opportunity to associate with the
    insured in the defense and control of any claim or proceeding reasonably
    likely to involve the company. In such event the insured and the company
    shall cooperate fully.179
    Further, two of the policies180 expressly contemplate the treatment of legal expenses:
    Loss and legal expenses incurred by the insured with the consent of the
    company in the investigation or defense of claims, including court costs and
    interest, shall be borne by both the company and the insured in the
    proportion that each party‘s share of loss bears to the total amount of such
    loss. . . . Expenses thus paid by the company shall be paid in addition to
    the limit of liability . . . .181
    The Superior Court held that the International Policies ―provide full defense
    obligations in addition to policy limits.‖182 Two of the policies,183 the court concluded,
    follow form by endorsement.184 The trial court observed that the third policy185 did ―not
    177
    The three policies include International Policy Nos. 5220113076, 5220282357, and
    5220489339. The Superior Court inadvertently omitted addressing the International Policies in
    its October 31, 2013 decision. See Viking Pump IV, 
    2014 WL 1305003
    , at *2.
    178
    See, e.g., JA4429.
    179
    See, e.g., JA4429.
    180
    International Policy Nos. 5220113076 and 5220282357.
    181
    See JA4000; JA4117. The third International Policy employs a Loss Expense Endorsement
    that conforms its treatment of legal expenses to the provisions in the two follow-form
    International Policies. Compare JA4000, and JA4117, with JA4433.
    182
    Viking Pump IV, 
    2014 WL 1305003
    , at *3.
    183
    International Policy Nos. 5220113076 and 5220282357.
    184
    Viking Pump IV, 
    2014 WL 1305003
    , at *3. The endorsements provide: ―Notwithstanding
    anything contained herein to the contrary, it is understood and agreed that this Insurance covers
    63
    include a follow-form endorsement,‖186 but maintained a ―Loss Expense Endorsement‖
    providing that ―[l]oss expense includes . . . legal expenses incurred by the Insured with
    the consent of the company in the investigation or defense of claims, including court
    costs and interest. . . . Expenses thus paid by the company shall be paid in addition to the
    limit of liability . . . .‖187
    The Excess Insurers contend that the International Policies ―expressly except
    defense payments by providing: ‗except with respect to (1) any obligation to investigate
    or defend any claim or suit . . . the insurance afforded by this policy shall apply in like
    manner as the underlying insurance . . . .‘‖188 Further, the Excess Insurers assert that to
    the extent that the International Policies are found to be obligated to pay defense, any
    such obligation should be subject to aggregate limits because that is how the Superior
    Court adjudicated the defense obligations of the other policies containing ―Assistance and
    Cooperation with Consent‖ language.189 Warren responds by arguing that each of the
    International Policies either adopts the Liberty defense obligation or sets forth an express
    promise to pay defense costs.
    In the context of the International Policies, the Assistance Provision eliminates any
    obligation to ―assume charge‖ of the defense. The clause fails to exclude the duty to pay
    the same Named Assured and is subject to the same terms, definitions, exclusions and conditions
    (except as regards the premium and the amount and limits of liability) as are contained in or may
    be added to the first layer Umbrella of the Liberty Mutual Insurance Company Policy No. To Be
    Advised.‖ See JA4005; JA4120.
    185
    International Policy No. 5220489339.
    186
    Viking Pump IV, 
    2014 WL 1305003
    , at *3.
    187
    JA4433.
    188
    Excess Insurers Op. Br. 45 (emphasis removed) (citations omitted).
    189
    
    Id.
     at 46 n.11 (citation omitted).
    64
    defense costs. But the clauses contemplating the treatment of expenses in two of the
    International Policies and the Loss Expense Endorsement to the third do address payment
    of legal expenses. These provisions contemplate the payment of defense costs contingent
    upon ―consent of the [insurer] . . . .‖190 Thus, provided the insurer consents to the
    incurrence of expenses, it is obligated to pay defense costs in addition to the policy limits.
    The Superior Court‘s conclusion that the International Policies pay defense costs
    in addition to policy limits is affirmed, but payment is contingent upon consent.
    viii.   Lexington Policy No. CE5504779 Generally Excludes Defense Costs, Except
    Those Jointly Incurred by Mutual Consent
    Pursuant to Lexington Policy No. CE5504779, the insurer ―agree[d] to indemnify
    the insured, in accordance with the applicable insuring agreements of the Primary
    Insurance, against loss subject to the limits stated [in the declarations].‖191           Under
    Lexington Policy No. CE5504779, the term ―primary insurance‖ means ―the policy
    (policies) described in Item 4.‖192 Item 4, in turn, states that the primary insurance is
    ―Liberty Mutual, Policy Number To Be Agreed.‖193               Further, under the insurance
    contract, ―loss‖ is defined as follows:
    The word ―loss‖ shall be understood to mean the sums paid in settlements
    of losses for which the insured is liable after making deductions for all
    other recoveries, salvages and other insurences (other than recoveries under
    the policy/ies of the Primary Insurer), whether recoverable or not, and shall
    exclude all expense and costs.194
    190
    See, e.g., JA4000.
    191
    JA2906.
    192
    JA2906.
    193
    JA2905.
    194
    JA2906 (emphasis added).
    65
    ―Costs‖ is also defined by the policy:
    The word ―costs‖ shall be understood to mean interest on judgments,
    investigations, adjustment and legal expenses (excluding, however, all
    expense for salaried employees and retained counsel of and all office
    expense of the insured).195
    Lexington Policy No. CE5504779 also contains a section setting forth the
    conditions of the insurance contract. In relevant part, the conditions set forth in the
    policy are as follows:
    1. It is agreed that this policy, except as herein stated, is subject to all
    conditions, agreements and limitations of and shall follow the Primary
    Insurance in all respects, including changes by endorsement . . . .
    2. Notice of any accident, which appears likely to involve this policy, shall
    be given to the [insurer], which at its own option, may, but is not
    required to, participate in the investigation, settlement or defense of any
    claim or suit. In the event expense and/or costs in connection with any
    claim or suit is incurred jointly by mutual consent of the [insurer] and
    of the Insured or Primary Insurer, the [insurer], in addition to its limits
    of liability as expressed in Item 6, Section 1 of the Declarations, shall
    be liable for no greater proportion of such expense and/or costs than
    the amount payable by the [insurer] under this Policy bears to the total
    loss payment.196
    Attached to Lexington Policy No. CE5504779 is a ―Following Form Clause‖
    endorsement, which provides that it ―is subject to the exclusions, conditions and other
    terms of Policy Number to be advised issued by Lloyds [sic] Underwriters.‖197 The
    endorsement continues by stating that ―this insurance differs from the policy which it
    follows in the following particulars and any other amendments attaching to and forming
    195
    JA2906 (emphasis added).
    196
    JA2913 (emphasis added).
    197
    JA2911.
    66
    part of the undermentioned policy number.‖198 The Following Form Clause endorsement
    then provides that Lexington Policy No. CE5504779 differs from the policy to which it
    follows form with respect to notices of occurrences and cancellation of the policy.199
    Lexington Policy No. CE5504779 does not, on its face, identify the specific
    Lloyd‘s policy to which it follows form. Warren urges, however, that Lexington Policy
    No. CE5504779 contains a ―typewritten endorsement[] that conform[s]‖ its language to
    that of another Excess Policy that the Superior Court held provides coverage for defense
    costs.200 Warren then asserts in a footnote that ―Lexington Policy [N]o. CE5504779 and
    Lloyd‘s/London Policy [N]o. 881/UGL0160 . . . cover the same time period at the same
    attachment point and participate in a ‗quota-sharing‘ arrangement pursuant to which
    those policies contribute stated percentages to the same covered losses.‖201 The Excess
    Insurers do not address Warren‘s follow-form contentions regarding the Lloyd‘s policy.
    It does not appear to this Court, based upon the record before us, that Warren raised this
    argument below.202 In any event, the argument was not addressed by the Superior Court.
    Thus, this Court is left with a follow-form argument that has only been obliquely raised
    on appeal by one party, has not been addressed by the Excess Insurers, and was not
    considered by the Superior Court. Under these circumstances, and given the complexities
    198
    JA2911.
    199
    JA2911.
    200
    Warren Ans. Br. 49.
    201
    Warren Ans. Br. 49 n.42 (citations omitted). On appeal, the sum total of the argument
    regarding the degree to which Lexington Policy No. CE5504779 follows form to London Policy
    No. 881/UGL0160 is a sentence within a footnote of Warren‘s Answering Brief.
    202
    See Del. Supr. Ct. R. 8 (―Only questions fairly presented to the trial court may be presented
    for review; provided, however, that when the interests of justice so require, the Court may
    consider and determine any question not so presented.‖).
    67
    that arise from attempting to discern which provisions of the unspecified Lloyd‘s policy
    might apply, it would be hazardous for this Court to rule in the first instance on which
    Lloyd‘s policy is being referred to and the impact of any provision that might arguably
    conflict with the Lexington policy. Instead, we conclude that this issue has not been
    adequately raised on appeal and has been waived.
    Thus, we turn to the terms of Lexington Policy No. CE5504779. The Superior
    Court incorporated the policy in its holding with respect to the Group Four policies. The
    trial court held that the policy follows form to the underlying insurance, carries full
    defense obligations, and pays defense costs in addition to policy limits.203 The Excess
    Insurers argue that Lexington has no duty to pay defense costs under the insurance
    contract. They also contend that, under New York law, there is no obligation to pay
    defense costs when a policy excludes expenses and costs from the term ―loss.‖
    Because Lexington Policy No. CE5504779 provides indemnification for ―loss
    subject to the limits stated [in the declarations],‖ the definition of ―loss‖ ―exclude[s] all
    expense and costs,‖ and ―costs‖ includes ―interest on judgments, investigations,
    adjustment and legal expenses (excluding, however, all expense for salaried employees
    and retained counsel of and all office expense of the insured),‖204 we conclude that the
    insurer is liable to the insured only for ―loss,‖ which unambiguously excludes defense
    costs.     Further, Lexington Policy No. CE5504779 is silent with respect to whether
    payment of defense costs erodes policy limits. This ambiguity is to be resolved in favor
    203
    Viking Pump III, 
    2013 WL 7098824
    , at *29.
    204
    JA2906.
    68
    of the insured. Thus, where expenses or costs in connection with any claim or suit are
    incurred jointly by mutual consent of the insurer205 and of the insured or underlying
    insurer, defense costs incurred are paid in addition to policy limits. But where mutual
    consent of the insurer and of the insured or underlying insurer has not been obtained,
    Lexington Policy No. CE5504779 does not provide coverage for defense costs. The
    Superior Court‘s conclusion that Lexington Policy No. CE5504779 covers defense costs
    in addition to policy limits is reversed.
    ix.    Lexington Policy No. 5510143 Generally Excludes Defense Costs Except Upon
    Consent
    As to Lexington Policy No. 5510143, Warren argues that the Superior Court erred
    particularly in holding that it provides for the payment of defense costs within limits,
    because that policy, by endorsement, expressly follows form to another excess policy that
    the Superior Court held does provide for the payment of defense costs in addition to the
    policy limits. Warren contends that the specific policy to which the Lexington policy
    follows form is London Policy No. UKL0340. The Excess Insurers argue that to the
    extent Lexington Policy No. 5510143 follows form to London Policy No. UKL0340, it
    provides no defense cost coverage.
    The Superior Court did not address the issue of the policy to which Lexington
    Policy No. 5510143 follows form.206 London Policy No. UKL0340 is a Group Four
    205
    Compare Stonewall, 73 F.3d at 1219 (―The consent provision does not require the insurer to
    indemnify [the insured] for defense costs unless the parties mutually agree beforehand to this
    arrangement.‖).
    206
    Unlike Lexington Policy No. CE5504779, there appears to be no dispute as to the policy to
    which Lexington Policy No. 5510143 follows form. See Excess Insurers Ans. Br. 49 n.10.
    69
    policy that generally excludes defense costs except upon the written consent of the
    insurer. Because Lexington Policy No. 5510143 follows form to London Policy No.
    UKL0340 and otherwise protects against ―loss‖ while defining ―loss‖ to exclude all
    expenses and costs, this Lexington policy excludes coverage for defense costs. In the
    event that the insurer consents, however, the insurer must pay ―expenses incurred by the
    [i]nsured with the approval of the [insurer].‖207 Lexington Policy No. 5510143 is silent
    with respect to whether payment of defense costs erodes policy limits. This ambiguity is
    to be resolved against the insurer, and the policy thus pays defense costs incurred by the
    insured with the ―approval‖ of the insurer in addition to policy limits.
    The Superior Court‘s conclusion that Lexington Policy No. 5510143 pays defense
    costs within policy limits is reversed.
    4.       Conclusion
    To summarize our holding concerning defense costs, we agree with the Superior
    Court that Liberty has defense obligations under its umbrella policies in addition to
    policy limits. We also agree with the Superior Court‘s conclusions that the Group One
    and Group Two policies pay defense costs within policy limits. However, our reasoning
    with respect to the Group One policies differs based on the language of the policy, and
    we reclassify Lexington Policy No. CE5503312 within Group Four instead of Group
    One. In addition, we agree that the International Policies pay defense costs in addition to
    policy limits, although we conclude that such payments are contingent on consent. These
    portions of the Superior Court‘s decision are affirmed.
    207
    JA3372.
    70
    We reverse in part the Superior Court‘s decision with respect to the Group Three
    policies. Although we agree that the Group Three policies have a duty to pay defense
    costs contingent on the insurer‘s consent, we conclude that such payments do not erode
    policy limits. Additionally, we reclassify Lexington Policy No. 5510143 to Group Four
    rather than Group Three.
    Finally, the Superior Court‘s decisions with respect to the Group Four policies and
    Lexington Policy Nos. CE5504779 and 5510143 are reversed.
    D.      The Superior Court Erred With Respect to the Trigger of Coverage
    1.        Contentions of the Parties
    Warren contends that the Superior Court erred as a matter of law in paragraph 9 of
    the Final Judgment, which states:
    As to a person who ultimately develops lung cancer, mesothelioma or non-
    malignant asbestos-related disease, bodily injury first occurs, for policy
    purposes, upon cellular and molecular damage caused by asbestos
    inhalation, and such cellular and molecular damage occurs during each and
    every period of asbestos claimant‘s significant exposure to asbestos. The
    duty to defend is based on the possibility of coverage, reflected in the
    pleadings‘ allegations. The duty to indemnify derives from whether the
    basis for Warren or Viking‘s liability to the injured claimant is actually
    covered by the policy.208
    Warren contends that this language suggests that the Excess Policies are triggered
    not by injury during the policy period, but only by injury during the period of significant
    exposure. Warren claims that this language fundamentally alters and eviscerates the
    jury‘s verdict and effectively eliminates much of the coverage for Warren‘s claims.209
    208
    Final Judgment at JA1868.
    209
    Viking has taken no position with respect to Warren‘s filings on the trigger of coverage issue.
    71
    Warren claims that the Superior Court then compounded its error by denying
    Warren‘s motion for clarification and refusing to amend the Judgment to provide that all
    Excess Policies from the first significant exposure until diagnoses are triggered. The
    Superior Court justified its denials on the grounds that (i) Warren‘s suggested language
    would have been inconsistent with an ―injury-in-fact‖ trigger; and (ii) the trial had
    focused solely on when injury first takes place—as opposed to how it proceeds. Warren
    contends that both conclusions constitute reversible error.
    The Excess Insurers contend that the jury was asked to decide only one aspect of
    trigger, namely, whether initial cellular or molecular damage was ‗bodily injury‘ within
    the meaning of the policies. The jury concluded it was. They contend that the jury did
    not decide whether that or any other injury continued over multiple policy periods
    because Warren and Viking elected not to submit that issue to the jury. The Excess
    Insurers maintain that Warren and Viking instead elected to address the timing and
    duration of injury post-trial and sought a ruling from the Superior Court that bodily injury
    occurred at the time of significant exposure and continued uninterrupted through disease
    diagnoses.    The Superior Court agreed that bodily injury occurred at the time of
    significant exposure but twice rejected Warren‘s request to find that bodily injury
    continued through disease diagnoses.       The Excess Insurers argue that the Superior
    Court‘s finding is supported by the medical testimony at trial and was not an abuse of
    discretion or clear error.
    2.     Standard of Review
    72
    The proper interpretation and construction of an insurance contract is subject to de
    novo review.210 We will defer to the Superior Court‘s findings of fact ―if substantial
    evidence supports them and they are not clearly wrong.‖211
    3.     Relevant Procedural Background
    Throughout the pre-trial proceedings, Warren urged that bodily injury occurs upon
    significant exposure to asbestos and continues thereafter. For example, at the September
    12, 2012 Pre-Trial Conference, Warren‘s counsel stated that its medical expert would
    opine that ―injury begins on the date of first exposure all the way up to [the] date of the
    claim.‖212 Warren‘s proposed jury verdict form asked the jury to find that bodily injury
    takes place at or soon after significant exposure and ―continues thereafter.‖213        The
    Superior Court rejected this approach.
    The Excess Insurers‘ position at trial was that bodily injury first occurred when the
    first malignant cell was formed. However, the Excess Insurers did not offer their own
    expert on the development of asbestos-related cancers, which represented the vast
    majority of Warren‘s costs. Instead, they proffered Dr. David Weill, who testified as to
    ―the timing and mechanism of how nonmalignant disease [specifically, asbestosis] occurs
    in the human lungs.‖214 Warren, meanwhile, maintained its position that bodily injury
    first occurred upon the first significant exposure to asbestos. In support of this position,
    Warren and Viking presented the testimony of Dr. Edward Gabrielson, who testified
    210
    See Phillips Home Builders, 
    700 A.2d at 129
     (citation omitted).
    211
    Bay City, Inc. v. Williams, 
    2 A.3d 1060
    , 1061-62 (Del. 2010) (citations omitted).
    212
    JA1094 (Tr. 20:12-14).
    213
    WA579.
    214
    WA518 (Tr. 51:18-22).
    73
    concerning the progression of the disease, beginning with cellular changes at the time of
    initial inhalation.215
    At oral argument before this Court, the Excess Insurers acknowledged that, during
    the trial phase, they had agreed that once bodily injury (consisting, in their view, of
    formation of a malignant cell) commenced, it continued.          Similarly, the plaintiffs‘
    position at trial was that once bodily injury (consisting of significant exposure to
    asbestos) occurred, it continued thereafter. Thus, although the opposing parties had
    different starting points as to when bodily injury first occurred, both agreed that, as to
    their respective starting point, the injury continued thereafter. The parties also accepted
    on appeal that if a claimant had significant exposure, then there was bodily injury to
    which the policies would have to respond.
    The jury instructions were based upon the Excess Insurers‘ suggested language,
    since the Superior Court had rejected the plaintiffs‘ version. These instructions told the
    jury that, by resolving the question of when the first injury occurred, the jury would
    resolve the trigger issue as a whole:
    For an underlying claim to be covered, Plaintiffs must show by a
    preponderance of the evidence that the claimant suffered “bodily injury”
    during the policy period of an Excess Policy.
    Specifically, you must decide whether, with respect to non-malignancy[,]
    asbestos-related bodily injury first occurs:
    1. upon cellular or molecular damage caused by asbestos inhalation; OR
    2. when the inhalation of asbestos is sufficient to overwhelm the bodies‘
    defense mechanisms and cause fibrosis; OR
    215
    WA390-391.
    74
    3. when the claimant‘s lung function is impaired.216
    The jury instruction reflects the parties‘ understanding that a person who develops
    an asbestos-related disease suffers an injury from the time the injury process begins until
    the time the disease becomes manifest. The trial judge had made clear that only disputed
    facts were to be put to the jury. The parties‘ Established Facts For Submission to Jury
    did not include a stipulation that injury occurred after exposure through diagnosis.217
    Warren contends that it did not include any medical experts‘ opinions or testimony on
    their list of undisputed facts since it planned to have Dr. Gabrielson testify as to when the
    bodily injury first took place.
    Over plaintiffs‘ objections, the Superior Court used the Excess Insurers‘ draft jury
    interrogatories as the template for the jury verdict form.218 Plaintiffs had proposed that
    the jury be asked whether the plaintiffs proved that ―bodily injury takes place at or soon
    after‖ significant exposure to asbestos and ―continues thereafter.‖219 In contrast, the
    Excess Insurers‘ proposed verdict form required the jury to select from among five
    choices an event constituting the ―first injury.‖220 No counsel, prior to the Superior
    Court‘s October 31, 2013 ruling, suggested that any disputed fact would remain
    unresolved under the verdict forms presented.221 Our review of the record reveals that the
    216
    JA1462 (emphasis added).
    217
    See JA1892-1929.
    218
    WA586-87.
    219
    WA136.
    220
    WA143-44.
    221
    In its October 31, 2013 decision on Plaintiffs‘ Motion for Final Judgment and Defendants‘
    Renewed Motion for Judgment as a Matter of Law, the Superior Court ruled that the jury‘s
    acceptance of Plaintiffs‘ expert‘s view that injury first occurs after ―significant exposure‖ was
    consistent with New York law. Viking Pump III, 
    2013 WL 7098824
    , at *17 (―As a matter of
    75
    Excess Insurers‘ proposed instructions then reflected their understanding that the
    determination of what event ―first‖ constituted injury would resolve the trigger issue for
    all Excess policies.
    The jury resolved this question in the final verdict form by circling answer ―a‖ for
    each of the two questions presented below:
    11. With respect to a person who ultimately develops lung cancer or
    mesothelioma as a result of inhalation of asbestos, did the Plaintiffs
    prove that bodily injury first occurs (check one):
    a. upon cellular and molecular damage caused by asbestos inhalation?
    b. when the first cancer cell is created?
    c. when the cancer impairs lung function?
    12. With respect to a person who ultimately develops a non-malignant
    asbestos-related disease as a result of inhalation of asbestos, did the
    Plaintiffs prove that bodily injury first occurs (check one):
    a. upon cellular and molecular damage caused by asbestos inhalation?
    b. when inhalation of asbestos fibers is sufficient to overwhelm the
    bodies‘ defense mechanisms and cause fibrosis?
    c. when the claimant‘s lung function is impaired?222
    New York law, therefore, New York accepts dates of substantial exposure as an ‗injury-in-fact‘
    trigger.‖). Accordingly, it held that ―[a]s a matter of law and fact, the verdict stands as to injury-
    in-fact.‖ Id. at *18. In its June 9, 2014 letter Order, the Superior Court reiterated that ―New
    York accepts dates of substantial exposure as an injury-in-fact trigger.‖ Letter Order at 3, Viking
    Pump, Inc. v. Century Indem. Co., No. N10C-06-141 FSS (Del. Super. June 9, 2014), available
    at JA1876-79 [hereinafter ―Letter/Order at JA____‖]. The Excess Insurers, for purposes of this
    appeal, accept that significant exposure to asbestos constitutes bodily injury under New York
    law.
    222
    JA1482-83.
    76
    In an April 16, 2014 letter to the Superior Court, Warren addressed paragraph 9 of
    the proposed final judgment order. Warren‘s proposed version of paragraph 9 was as
    follows:
    With respect to a person who ultimately develops lung cancer,
    mesothelioma or non-malignant asbestos-related disease, bodily injury first
    begins with cellular and molecular damage caused by asbestos inhalation,
    and such cellular and molecular damage begins upon an asbestos claimant‘s
    first significant exposure to asbestos.223
    In a competing letter, the Excess Insurers favored the following language:
    An Excess Policy is triggered when the underlying claimant suffered bodily
    injury during the period of that policy. For purposes of trigger, bodily
    injury first occurs upon cellular and molecular damage caused by
    significant exposure to asbestos that is attributable to the insured seeking
    coverage.224
    Warren argued that the Excess Insurers‘ version did not comport with the jury‘s
    conclusion that for ―claimants who develop an asbestos-related disease, bodily injury
    begins upon inhalation at the first significant exposure to asbestos.‖225 Anticipating that
    the Excess Insurers would contend that the ―ultimate asbestos-related disease did not
    develop as part of a continuous process after [the] first significant exposure[,]‖226 Warren
    offered two responses. First, the narrow issue identified by the parties with respect to the
    trigger of coverage was limited to the definition of ―‗bodily injury‘ and when a given
    claimant‘s asbestos-related injuries begin (or ‗first occur‘).‖227 Second, Warren argued
    223
    JA1803.
    224
    JA1844.
    225
    JA1805.
    226
    JA1805.
    227
    JA1805.
    77
    that there was never any dispute that ―every asbestos-related disease results from a long-
    term, continuous, and uninterrupted process.‖228
    The Excess Insurers objected to Warren‘s proposal for various reasons.229 First,
    they argued that it suggested, contrary to the jury verdict and the evidence, that ―bodily
    injury occurs after every inhalation of asbestos.‖230 Second, they maintained that ―the
    trial addressed (as concerns trigger) when bodily injury occurs.‖231 Further, they claimed
    that ―[p]laintiffs bore the burden of proving that bodily injury occurs within a particular
    policy period, . . . [but] never sought a jury finding that bodily injury occurs continuously
    from inhalation until disease diagnoses, or that this period coincides with any Excess
    Policy[,]‖232 and the evidence at trial did not support such a finding. The Excess Insurers
    argued that the plaintiffs were now seeking ―to end-run around their own decision not to
    seek a ruling from the jury as a matter of scientific evidence and ask the Court to enter a
    Final Order that bodily injury occurs continuously from the date of first exposure (a
    ‗continuous trigger‘).‖233    Finally, they pointed out that the Court of Chancery had
    ―explicitly distinguished New York‘s operative injury-in-fact trigger from the continuous
    trigger theory [p]laintiffs now advance.‖234
    228
    JA1806.
    229
    JA1844-45. The Excess Insurers‘ April 16, 2014 letter objected to Warren‘s version for
    additional reasons less relevant to this dispute, including that Warren‘s proposal raised ―for the
    very first time a distinction between defense and indemnity obligations related to trigger.‖
    JA1845.
    230
    JA1845.
    231
    JA1846.
    232
    JA1846.
    233
    JA1846.
    234
    JA1846.
    78
    On June 9, 2014, the Superior Court entered the Final Judgment Order After
    Trial.235 In a letter order dated June 9, 2014, the Superior Court deemed both of the
    parties‘ proposals ―unacceptable.‖236         Because ―[n]either proposal accurately or
    completely encompasse[d] the rule of the case, and the law[,]‖ the Superior Court
    ―drafted its own provision.‖237 The Court explained:
    The order‘s ―trigger‖ language must encompass three things: definition of
    injury, timing of injury, and the distinction between the duties to defend
    and indemnify. Viking II unequivocally held New York‘s ―injury-in-fact‖
    standard applies. The jury then determined injury first occurs ―upon
    cellular and molecular damage caused by asbestos inhalation.‖ The court
    further clarified ―New York accepts dates of substantial exposure as an
    ‗injury-in-fact‘ trigger.‖ Therefore, in sum, under the policies, each
    substantial exposure is deemed to have caused bodily injury, defined as
    cellular and molecular damage.238
    The Superior Court gave the parties leave to respond by filing a motion pursuant to
    Superior Court Rule 59.
    Plaintiffs filed a motion under Superior Court Rule 59. In a letter dated July 11,
    2014, the trial court observed that ―[d]efendants‘ recent appeal is interlocutory‖ in view
    of the pending motion, which it ―was preparing to deny . . . .‖239 It observed that ―the
    trial focused almost exclusively on when bodily injury first occurs, rather than on the
    illness‘s course.‖240 It stated further that although it ―would have acknowledged the
    235
    Final Judgment at JA1862-75.
    236
    Letter/Order at JA1877.
    237
    Letter/Order at JA1878.
    238
    Letter/Order at JA1878 (citations omitted).
    239
    Letter at 1, Viking Pump, Inc. v. Century Indem. Co., No. N10C-06-141 FSS (Del. Super.
    July 11, 2014), available at JA1880-81 [hereinafter ―Letter at JA____‖].
    240
    Letter at JA1880. In their Answering Brief before this Court, the Excess Insurers describe
    this as a ―comment‖ by the Superior Court and argue that although ―Warren elevates the
    correctness of this comment to a ‗question presented,‘ the statement is not a ruling and does not
    79
    similarity some courts see (and others do not), between injury-in-fact and continuous
    trigger in asbestos cases, [it] was unwilling to equate the terms as a matter of law at this
    late hour.‖241
    In a Final Order dated August 14, 2014, the Superior Court denied Viking and
    Warren‘s motions for costs and closed the case.242 It stated further that, ―[i]f the parties
    file reargument again, the Prothonotary SHALL reject any filing.‖243
    4.     Discussion
    The parties agreed during the course of the lengthy proceedings that, under New
    York law, a policy is triggered if the claimant suffered some ―injury in fact‖ during the
    policy period.244 The record supports Warren‘s contention that this case was presented to
    the jury with the understanding that resolution of the issue of when bodily injury first
    occurred was all that was necessary because the parties agreed that bodily injury would
    continue until diagnoses.
    Both sides‘ experts testified that a person who ultimately develops asbestosis has
    undergone a continuous process from a person‘s first significant exposure to asbestos that
    present an appealable issue.‖ Excess Insurers‘ Ans. Br. 36. Our review of the record suggests
    that the Superior Court‘s observation was incorrect—which perhaps explains the Excess
    Insurers‘ attempt to diminish its significance.
    241
    Letter at JA1880-81.
    242
    Final Order, Viking Pump, Inc. v. Century Indem. Co., No. N10C-06-141 FSS (Del. Super.
    Aug. 14, 2014), available at JA1882-88 [hereinafter ―Final Order at JA____‖].
    243
    Final Order at JA1886 (emphasis in original).
    244
    See, e.g., Stonewall, 73 F.3d at 1194-96 (applying New York Law); Cont’l Cas. Co. v. Rapid-
    Am. Corp., 
    177 A.D.2d 61
    , 65-66 (N.Y. 1992) (applying New York law); Am. Home Prods.
    Corp. v. Liberty Mut. Ins. Co., 
    748 F.2d 760
    , 764-66 (2d Cir. 1984) (applying New York law).
    80
    continued until diagnosis.245 At trial, they differed only as to when bodily injury first
    occurs.246 This dispute was resolved by the jury in Warren‘s favor, and the Excess
    Insurers did not appeal that factual finding by the jury.247
    Moreover, the Excess Insurers‘ position in this appeal is inconsistent with its prior
    positions in that, previously, they contended that the claimants did not suffer injury until
    each claimant suffered detectable bodily impairment—years after the excess policy
    periods. On appeal, however, they contend that only those policies in place while the
    claimant was actually exposed to asbestos are triggered. Graphically, Warren aptly
    summarizes the Excess Insurers‘ inconsistent positions as follows:248
    245
    Dr. David Weill, for the Excess Insurers, testified regarding the disease process for non-
    malignant lung disease, specifically asbestosis. WA518 (Tr. 51:17-22); WA546 (Tr. 79:15-16).
    He agreed that the latency period for asbestosis is generally considered to be twenty years or
    more from a person‘s first occupational exposure to asbestos through the time of clinical
    diagnosis of the disease. WA527 (Tr. 60:5-10). He agreed that individuals who have been
    diagnosed with clinical asbestosis have latent or subclinical phases of their disease before it
    causes symptoms and can be clinically diagnosed. WA527 (Tr. 60:16-20). He also agreed that
    every non-malignant asbestos-related disease, including asbestosis, begins with an inflammatory
    response. WA561-62 (Tr. 94:23-95:7).
    246
    Dr. Weill agreed that asbestos fibers would likely cause some cellular injury in lung tissue at
    the time of a claimant‘s first significant exposure to asbestos ―[a]s long as it overwhelms the
    defense mechanisms.‖ WA533-34 (Tr. 66:23-67:5). He testified that ―damage to the lung
    architecture itself, that requires the persistence and the overwhelming of the lung defense
    mechanisms‖ and that ―the cellular changes that are occurring don‘t actually damage the lung
    tissue until the defense mechanisms are overwhelmed.‖ WA534 (Tr. 66:11-17).
    247
    Indeed, for twenty-three years, Liberty, the umbrella insurer, indemnified the Houdaille
    policies‘ insureds for asbestos claims under each of its policies from the claimants‘ first injuries
    until 1986.
    248
    Warren Supp. Br. on Trigger Issues 7. Thus, the Excess Insurers seek to convert the jury‘s
    finding that bodily injury first occurs upon a claimant‘s significant exposure to asbestos into a
    finding that bodily injury only occurred during a claimant‘s significant exposure to asbestos.
    81
    We agree with Warren that the Superior Court‘s application of an ―exposure‖
    trigger is inconsistent with New York law.            We also reject the Excess Insurers‘
    contention that Warren is essentially seeking a ―continuous trigger‖ as opposed to New
    York‘s operative injury-in-fact trigger.249 Plaintiffs did not rely on a presumption that
    asbestos-related injuries take place from exposure through manifestation. Rather, they
    presented to the jury expert medical testimony that the cellular and molecular damage
    that leads to asbestos-related disease is a continuous process that is triggered after there is
    an injury-in-fact, i.e., the claimant‘s first significant exposure to asbestos. The parties
    acknowledged at oral argument before this Court that every asbestos claim involves a
    249
    See, e.g., Stonewall, 73 F.3d at 1195 (applying New York law) (explaining that ―triggering by
    successive injuries, proven to have occurred,‖ is not the same as a continuous trigger).
    82
    claimant who ultimately developed an asbestos-related disease.                  Both sides
    acknowledged that asbestos-related diseases result from gradual and continuous injurious
    processes. Accordingly, we conclude that the Superior Court erred, and paragraph 9
    should be revised to read:
    As to a person who ultimately develops lung cancer, mesothelioma, or non-
    malignant asbestos-related disease, bodily injury first occurs, for policy
    purposes, upon cellular and molecular damage caused by asbestos
    inhalation, and such cellular and molecular damage occurs during each and
    every period of an asbestos claimant‘s significant exposure to asbestos and
    continues thereafter. The duty to defend is based on the possibility of
    coverage, reflected in the pleadings‘ allegations. The duty to indemnify
    derives from whether the basis for Warren or Viking‘s liability to the
    injured claimant is actually covered by the policy.
    III.   CONCLUSION
    With respect to the issues identified in the parties‘ Joint Stipulation, we conclude
    as follows:
    (i)     The Court of Chancery correctly held that there were valid assignments of
    insurance rights to Warren and Viking under the Excess Policies.
    (ii)    The Superior Court correctly held that the 1980-1985 Liberty Primary
    Policies are exhausted.
    (iii)   The Superior Court is affirmed in part and reversed in part with respect to
    its determination of the Excess Policies‘ coverage for defense costs.
    (iv)    The Superior Court erred with respect to the trigger of coverage under the
    Excess Policies.
    83
    

Document Info

Docket Number: 518, 2014; 523, 2014; 525, 2014; 528, 2014

Citation Numbers: 148 A.3d 633, 2016 Del. LEXIS 474

Judges: Holland, Valihura, Vaughn, Walls, Ryan

Filed Date: 9/12/2016

Precedential Status: Precedential

Modified Date: 10/26/2024

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