Kinsale Insurance Sues Colony Over $400K Construction Lawsuit Costs in San Diego Pool Dispute
By Laura Bennett
August 24, 2025
San Diego, CA – Kinsale Insurance Company has filed a federal lawsuit against Colony Insurance Company, seeking to recover over $400,000 in defense and settlement costs tied to a contentious construction lawsuit stemming from a botched pool project in San Diego. The case, lodged on August 19, 2025, in the U.S. District Court for the Southern District of California, highlights the complexities of insurance coverage disputes in construction defect litigation and underscores ongoing tensions between insurers over shared responsibilities.
The Underlying Dispute
The conflict traces back to a 2018 contract between Dennis and Kimberly Stover and Phoenix Pools & Spas, Inc., for the construction of a zero-edge pool, spa, and related outdoor structures at their San Diego home. According to court documents, issues with the work led to property damage, prompting the Stovers to file a lawsuit on June 9, 2020, in San Diego County Superior Court against Phoenix Pools, its owner Alex Decamp, and later Jake Decamp, alleging breach of contract, negligence, fraud, and other claims.
Phoenix Pools held a Commercial General Liability Policy from Colony Insurance, effective from March 1, 2018, to March 1, 2019, with a $1 million per-occurrence limit. The policy covered damages for “bodily injury” or “property damage” arising from an “occurrence,” defined as an accident, including continuous exposure to harmful conditions. When the Stovers’ lawsuit was tendered to Colony, the insurer denied a defense, arguing that the project was not completed within its policy period.
Kinsale Insurance, which also insured Phoenix Pools, stepped in to defend the company and the Decamps under a reservation of rights, hiring counsel and ultimately contributing to a settlement exceeding $400,000 on February 20, 2024. Kinsale now claims that Colony wrongfully refused to defend or indemnify, alleging it is entitled to equitable contribution for covering more than its fair share of the costs.
Legal Claims and Stakes
Kinsale’s complaint asserts that Colony had a duty to defend and indemnify Phoenix Pools and the Decamps, as the alleged property damage occurred during Colony’s policy period. The lawsuit seeks reimbursement for the excess funds Kinsale paid, along with costs of suit and pre- and post-judgment interest. “This case is about ensuring insurers uphold their obligations,” said a Kinsale representative, emphasizing the principle of equitable contribution in multi-insurer disputes.
The case remains at the complaint stage, with no court ruling yet. Its outcome hinges on the interpretation of policy terms, particularly the timing of the alleged damage and Colony’s coverage obligations. Insurance Business America reported that such disputes are common in construction litigation, where overlapping policies and unclear timelines often lead to battles over who pays.
Broader Implications
The Kinsale-Colony dispute reflects a growing trend of insurance conflicts in the construction sector, where defective work can trigger costly legal battles. A similar case, Acuity v. Kinsale (2024), highlighted the complexities of multi-insurer coverage for construction defects spanning multiple policy periods, with courts often relying on subrogation and contribution principles to allocate responsibility.
On X, reactions to the case vary. One user posted, “Kinsale’s right to go after Colony—why should they foot the bill alone?” Another questioned, “If Colony’s policy didn’t cover the project’s completion, why are they on the hook?” The debate underscores the intricate nature of insurance law and its impact on construction firms and homeowners.
Looking Ahead
As the case progresses, it could set a precedent for how insurers handle shared liability in construction disputes, particularly in California, where rising construction costs and litigation are straining the industry. The California Construction Cost Index reported a 7.2% increase in building costs in 2025, amplifying the financial stakes of such lawsuits.
For now, Kinsale’s pursuit of over $400,000 from Colony highlights the high-stakes world of insurance coverage disputes. The outcome will likely influence how insurers approach similar cases, with ripple effects for contractors and policyholders navigating the fallout of construction gone wrong.
Trending Tags: #KinsaleVsColony, #ConstructionLawsuit, #InsuranceDispute, #SanDiegoPoolCase, #EquitableContribution, #PropertyDamage
Laura Bennett is an insurance and legal affairs reporter covering litigation and industry trends.