In a recent legal development, a New York appellate court ruled that Colony Insurance Company must provide defense and coverage for Sandy Clarkson LLC in a personal injury lawsuit linked to a construction site accident. This decision, made on April 29, 2025, has significant implications for how insurance coverage is interpreted in the construction industry.
The case, titled Catlin Insurance Company et al. v. Colony Insurance Company, stems from an incident where a worker was injured at a construction site managed by McAlpine Contracting Co. The subcontractor for the project, Kingstone Builders Inc., had liability insurance through Colony. As part of their contract, Kingstone was required to add both McAlpine and Sandy Clarkson as additional insured parties under its insurance policy.
When the injured worker filed a lawsuit, Sandy Clarkson and McAlpine were named as defendants. Catlin Insurance Company, which insured them, stepped in to manage their defense and sought a court order for Colony to take over and reimburse the legal costs already incurred.
Colony Insurance initially denied coverage, arguing there was no direct contract between Kingstone and Sandy Clarkson. However, the appellate court disagreed, reversing a lower court’s ruling. The judges emphasized that the language in Colony’s additional insured endorsement was broad enough to include Sandy Clarkson, despite the lack of a direct contract. They noted that the contract between Kingstone and McAlpine explicitly required Sandy Clarkson to be named as an additional insured.
The court highlighted the importance of the endorsement’s wording, which extended coverage to any parties required by a written contract with the named insured. This meant that Sandy Clarkson was covered because of the contractual obligation that Kingstone had to include her.
Furthermore, the court determined that the allegations in the injury lawsuit were sufficient to trigger Colony’s duty to defend. Because Colony’s policy was primary to Catlin’s and required noncontributory coverage, Colony is now responsible for covering Sandy Clarkson’s legal defense and reimbursing Catlin for previous defense costs.
However, the judges did not resolve whether Colony must also indemnify McAlpine Contracting. They stated that this question is premature and depends on the outcome of the ongoing personal injury lawsuit, as there are still unresolved factual questions regarding Kingstone’s responsibility for the accident.
This ruling serves as a reminder for insurers and construction professionals about the importance of policy language. It shows that coverage can extend to parties indirectly named in contracts, which can lead to complex situations in construction projects where many parties are involved.
The legal team for Catlin and its co-plaintiffs included James Quinn from Gallo Vitucci Klar LLP, while Colony Insurance was represented by Lester Chanin of Farber Brocks & Zane LLP. Although this case may not attract national headlines, its implications for insurance practices in construction are significant, especially regarding who is responsible for coverage after an accident occurs.