A North Carolina appeals court let an insurer walk away from a fatal-crash claim, ruling one product exclusion settled the whole thing.
In a decision filed August 5, 2026, the court sided with Mesa Underwriters Specialty Insurance Company (Mesa) against Henson Novelties, Inc., operator of the Smoke Rings smoke shop chain. Mesa had written a commercial policy for a Smoke Rings store on Hillsborough Street in Raleigh, running from November 2, 2021 to November 2, 2022.
The claim grew out of a crash on the night of January 9, 2022. The underlying lawsuit alleged that two young men it called "obviously intoxicated" bought nitrous oxide cream chargers at the shop and inhaled the gas "for the purpose of intoxication." One then drove head-on into another car, killing both passengers and badly hurting the driver, "less than three miles from" the store.
The driver and the estates of the two who died sued Henson for negligence and gross negligence, saying the shop sold the chargers knowing the buyers would likely inhale them and drive. Henson passed the suit to Mesa in January 2024. Mesa funded a defense under a reservation of rights, denied coverage, and asked a court to confirm it owed nothing.
The policy's products-completed operations hazard exclusion did the work. It said coverage "does not apply to 'bodily injury' . . . included within the 'products-completed operations hazard'" - a category that "[i]ncludes all 'bodily injury' . . . occurring away from premises you own or rent and arising out of 'your product[.]'" A "product" meant anything "sold . . . by" the insured.
Using the "comparison test," the court read the policy against the complaint. The injuries happened miles away and came from a product Henson sold. That triggered the exclusion, wiped out the duty to defend, and, because the duty to pay is narrower, the duty to indemnify with it.
The court affirmed the judgment for Mesa on that exclusion alone, leaving a separate premises endorsement undecided.
