In a closely watched insurance dispute, a New York appellate court ruled on April 29, 2025, that Colony Insurance Company must defend and cover Sandy Clarkson LLC, a property owner, in a personal injury lawsuit stemming from a construction site accident - even though Sandy Clarkson had no direct contract with the subcontractor insured by Colony.
The case, Catlin Insurance Company et al. v. Colony Insurance Company, arose from a lawsuit filed after a worker was injured at a construction site. Kingstone Builders Inc., the subcontractor on the project, had obtained liability insurance from Colony. Under its subcontract with general contractor McAlpine Contracting Co., Kingstone was required to name both McAlpine and Sandy Clarkson as additional insureds under its insurance policies.
When the injured worker sued, Sandy Clarkson and McAlpine were among those named as defendants. Their insurer, Catlin Insurance Company, stepped in to defend them, then sought a court order requiring Colony to assume the defense and reimburse the legal costs already incurred.
Colony denied coverage, pointing out that there was no written contract between its insured—Kingstone—and Sandy Clarkson. But the Appellate Division, First Department, reversed a lower court’s ruling and held that Colony was indeed obligated to defend and reimburse Sandy Clarkson.
The key issue was the wording of Colony’s additional insured endorsement. The policy extended coverage to:
“All persons or organizations as required by written contract with the Named Insured,” but only for liability caused, “in whole or in part,” by the named insured’s acts or the acts of those working on its behalf.
That language, the court said, was broad enough to include Sandy Clarkson - even without a direct contract—because the subcontract between Kingstone and McAlpine specifically required Sandy Clarkson to be named as an additional insured. The court emphasized the “plain and ordinary meaning” of the endorsement and found that it applied to anyone Kingstone was required to cover by written contract, regardless of whether that party had signed the contract directly.
The court further held that the allegations in the injury lawsuit were enough to trigger Colony’s duty to defend. Because Colony’s policy was primary to Catlin’s, and explicitly required noncontributory coverage, Colony must now cover Sandy Clarkson’s legal defense moving forward and reimburse Catlin for prior defense costs.
However, the judges left one issue unresolved: whether Colony must also indemnify McAlpine Contracting. That question, they said, is premature and depends on the outcome of the ongoing personal injury lawsuit. In a prior decision related to that case (Gamez v Sandy Clarkson LLC, 222 AD3d 482 [1st Dept 2023]), the court found there were still factual questions about Kingstone’s responsibility for the accident—questions that need to be answered before indemnification can be addressed.
The decision offers a clear reminder to insurers and construction professionals alike: policy language requiring coverage for parties designated in a contract - even indirectly - can trigger defense obligations. It also reinforces the broad reach of additional insured provisions in the context of layered construction agreements, where many players may not be in direct contractual relationships but are still connected through project-level obligations.
Catlin and its co-plaintiffs were represented by James Quinn of Gallo Vitucci Klar LLP. Colony Insurance Company was represented by Lester Chanin of Farber Brocks & Zane LLP.
Though the case doesn’t involve a headline-grabbing settlement or national brand, it has strong implications for insurers navigating risk transfer and policy interpretation in construction projects - where who covers whom, and when, is often the most hotly contested issue after an accident occurs.
