A fresh legal battle between Kinsale Insurance and Colony Insurance is shining a spotlight on how insurers share the costs of defending messy construction claims.
Filed on August 19, 2025, in the US District Court for the Southern District of California, the complaint tells a story that’s all too familiar in the insurance world: when a big construction project goes sideways, who pays for the fallout? This time, it’s Kinsale Insurance Company asking Colony Insurance Company to help cover more than $400,000 in defense and settlement costs after a pool project in San Diego led to a drawn-out lawsuit.
Here’s what happened, according to the complaint. On or about October 17, 2018, Dennis and Kimberly Stover entered into a contract with Phoenix Pools & Spas, Inc. for the construction of a new zero edge pool, spa, outdoor structure including a bathroom, retaining wall, pool equipment room, surge tank, and new landscaping at their home in San Diego. Before the project was completed, the Stovers claimed there were issues with the work performed and resulting property damage. On June 9, 2020, the Stovers filed a complaint in San Diego County Superior Court against Phoenix Pools & Spas, Inc. and its owner, Alex Decamp, alleging breach of contract, breach of implied warranty, breach of the covenant of good faith and fair dealing, negligence, accounting, fraud, misrepresentation, fraudulent inducement of contract, violation of Business and Professions Code Section 17200, et seq., and conversion.
Phoenix Pools had insurance coverage. Colony Insurance Company issued a Commercial General Liability Policy, Policy No. 103 GL 0016994-01, for the period March 1, 2018, through March 1, 2019, with an each occurrence limit of $1,000,000. The policy stated that Colony would pay those sums the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which the insurance applies, and would have the right and duty to defend the insured against any “suit” seeking those damages. The policy defined “occurrence” as an accident, including continuous or repeated exposure to substantially the same general harmful conditions, and “property damage” as physical injury to tangible property or loss of use of tangible property.
When the lawsuit was filed, the claim was tendered to Colony for defense and indemnity. Colony denied a defense, taking the position that the project was not completed in its policy period. Kinsale Insurance Company then hired counsel to defend Phoenix Pools, Alex Decamp, and Jake Decamp (who was added as a defendant in a first amended complaint filed February 16, 2022) under a reservation of rights. On February 20, 2024, the parties settled the state court lawsuit for an amount in excess of $400,000.
Kinsale’s complaint alleges that Colony owed a duty to defend and indemnify Phoenix Pools, Alex Decamp, and Jake Decamp in the state court lawsuit. Kinsale claims it expended funds in excess of its equitable share and seeks reimbursement from Colony for the amount paid in excess of its equitable share. The complaint asserts causes of action for equitable contribution for defense and indemnity, and seeks a monetary award, adjudication as to allocation owed by Colony, costs of suit, and pre- and post-judgment interest.
At this stage, the matter remains at the complaint level, with no final decision from the court. The outcome will depend on the specifics of the policy language and the facts as established in court. For insurance professionals, the case is a reminder of the importance of policy terms and timing when it comes to defending and settling claims involving multiple insurers. This dispute, while not yet resolved, underscores the real-world complexities insurers face when construction projects go wrong and the question of “who pays?” lands in federal court.
