A North Carolina appeals court held that an insurer must show prejudice if it is to be relieved of liability to pay a claim where an insured breached the voluntary payments clause in Bond/Tec, Inc. v. Scottsdale Ins. Co., No COA04-1591, 2005 WLK 3286012 (N.C. App. Dec. 6, 2006).

Bond/Tec entered into a contract with Newton-Conover City High School to re-roof the school. Bond/Tec posted a performance bond of $50,000, which was held in escrow until the work was satisfactorily completed.