New York Appeals Court Rules in Favor of Catskill Barbeque in Insurance Dispute
A New York appellate court has ruled in favor of Catskill Barbeque, LLC in its insurance claim dispute with Mid-Hudson Co-Operative Insurance Company, allowing the restaurant to pursue its claim for over $2 million in lost business income. The decision, issued on April 24, 2025, by the Appellate Division, Third Department, reverses the insurer’s attempt to dismiss the case.
Case Background
The dispute originated from a fire that damaged Catskill Barbeque’s property in Fallsburg, Sullivan County. Following the incident, the restaurant filed a claim with Mid-Hudson Co-Operative Insurance, seeking compensation for its losses. The insurer paid $175,000, asserting this amount represented the maximum coverage under the policy. Catskill Barbeque contested this interpretation and filed a lawsuit for breach of contract.
Policy Language at Issue
The court’s decision centered on inconsistencies in the insurance policy documentation:
- The main declarations page made no mention of business income coverage limits
- A supplemental page referenced 12 months of coverage without specifying monetary limits
- A limitation of $175,000 for three months of coverage appeared on page 73 of the policy
Court’s Rationale
The appellate judges determined that significant coverage limitations must be clearly stated in the declaration pages where policyholders would reasonably expect to find them. Burying such limitations deep within the policy created ambiguity, which under insurance law must be interpreted in favor of the policyholder. The court also noted that Mid-Hudson had abandoned its argument that the complaint failed to state a valid legal claim.
Implications of the Ruling
This decision reinforces several important principles in insurance law:
- Insurers must present critical limitations prominently in policy documents
- Ambiguous policy language will be construed against the insurance company
- Policyholders have legal recourse when insurers fail to meet their obligations
The case continues as Catskill Barbeque seeks full compensation for its claimed losses.
Final Thoughts
This ruling emphasizes the need for clear insurance policies and thorough policy reviews. Businesses should scrutinize all policy details and be ready to dispute unfair denials, while insurers must present terms transparently to avoid legal challenges. The case continues as Catskill Barbeque pursues its full claim.
