Insurers took over the defense, then backed away from coverage mid-trial. Now Sunbelt Rentals can pursue them over an $8.9 million carbon monoxide judgment.
In a July 22, 2026 order, the North Carolina Business Court refused to throw out most of Sunbelt Rentals' claims against Niagara Machine, keeping alive a dispute that turns on one line of fine print in a purchase order.
In March 2018, Sunbelt bought a Shot Blaster - a propane-powered concrete resurfacing machine that emits carbon monoxide - from Niagara. In July 2019, Sunbelt rented it to a customer refinishing his business's floors. The next day he died, and a colleague fell seriously ill, from the machine's carbon monoxide emissions, according to the complaint.
Both men's cases named Sunbelt and Niagara over product defects and failure to warn. That set off the coverage fight.
Sunbelt held two policies from the ACE companies: a primary liability policy with a "$1.5 million per-occurrence limit for 'Bodily Injury and Property Damage Liability'" and an umbrella policy with a "$25 million per-occurrence limit." It also leaned on its purchase order with Niagara, which said it was "subject to" terms and conditions posted online. Those terms carried an indemnification clause requiring the seller to defend and indemnify the buyer.
For claims teams, this is the part that stings. Sunbelt says it tendered both suits to Niagara and to the Travelers insurers covering Niagara. According to the complaint, the Travelers claims handlers agreed to "accept defense and indemnity" for both cases with no reservation of rights - then took over the defense, declined to pass along a settlement offer ACE had approved, and went to trial. A jury found Sunbelt liable for negligence, and a judgment of $8,904,430.68 followed.
Only after the case reached the jury, the complaint says, did Travelers signal it would not cover the negligence theory. The ACE insurers and Sunbelt say they put in "millions of dollars" to settle.
Niagara moved to dismiss, arguing the indemnification clause in the unsigned purchase order never became part of the deal. The court disagreed on the central question, holding that "subject to" language can pull linked terms into a contract. It let Sunbelt's breach of contract, declaratory judgment, implied indemnity, and good faith and fair dealing claims proceed.
The court did narrow the case, dismissing standalone claims for restitution and equitable subrogation, plus the punitive damages request, each without prejudice.
The ruling is not final. It decides only Niagara's motion to dismiss, and the facts behind it remain allegations the court accepted as true for that limited purpose.
