P.S. Marcato Elevator Company, Inc. faced a significant setback when the Appellate Division of the Supreme Court of the State of New York ruled against its insurance claims in the case against Scottsdale Insurance Company. The court's decision, made on May 12, 2026, clarified the limits of coverage under the insurance policies in question. This ruling affects Marcato, which sought indemnification for certain lawsuits, and sets important precedents for how insurance policies are interpreted in construction-related disputes.

The case, documented under Index No. 655259/19 and Appeal No. 6604, stemmed from a dispute over insurance coverage related to construction projects. Marcato, an elevator company, sought coverage for claims arising from its work on various construction projects. Scottsdale Insurance Company and National Union Fire Insurance Company were named as defendants in the case, as they provided the insurance policies that Marcato relied upon for coverage. The lower court had previously ruled in favor of the insurance companies, prompting Marcato to appeal.

Marcato's contention revolved around the interpretation of specific endorsements in its insurance policies. The company argued that the language in the Scottsdale policy should provide broader coverage for its construction projects. However, the insurance companies maintained that the policies clearly limited coverage and that Marcato's claims did not meet the requirements for indemnification. The case was reviewed by the Appellate Division, which examined the language of the insurance policies and the arguments presented by both sides.

The court ruled in favor of Scottsdale Insurance Company and National Union Fire Insurance Company. It affirmed the lower court’s decision, which stated that Scottsdale had no further duty to indemnify Marcato concerning certain underlying lawsuits. The court noted that the Construction Project endorsement in the Scottsdale policy was unambiguous. It stated, "the phrase 'all projects' cannot be read in isolation from the heading 'Designated Construction Projects(s),' and the phrase therefore refers only to plaintiff's construction projects." This assertion underscored the court's interpretation that the policies were limited in scope and did not cover all of Marcato's projects.

In its ruling, the court emphasized that a contrary reading would render the term 'construction' meaningless. Additionally, the court stated that "extrinsic evidence is not admissible to determine the meaning of the endorsement, as it is unambiguous on its face." This ruling highlights the importance of clear language in insurance contracts and sets a precedent for how similar cases may be interpreted in the future.

The court also addressed Marcato's request for reformation of the primary Scottsdale policy. It found that Marcato did not present the "clear, positive and convincing evidence" needed to show that reformation was appropriate. The court stated that reformation based on mutual mistake requires evidence of an oral agreement, which Marcato failed to provide. This aspect of the ruling further reinforced the idea that parties must be diligent in their understanding and agreement on policy terms.

Furthermore, the court ruled that Marcato was not entitled to indemnification based on exclusions in both the Scottsdale and National Union policies. The court pointed out that the Employer's Liability exclusion in the National Union policy clearly excluded coverage for employers with workers' compensation policies that provided unlimited coverage for grave injuries. This ruling echoed previous decisions by the court that have consistently upheld similar exclusions in insurance policies.

The implications of this ruling are significant for P.S. Marcato Elevator Company, as it limits the company's ability to seek indemnification for legal claims related to its construction projects. This decision also impacts other construction companies and contractors who rely on similar insurance policies for coverage. The ruling serves as a reminder of the importance of understanding the specific terms and conditions laid out in insurance contracts, particularly in the construction industry.

This case may set a precedent for future disputes involving insurance coverage for construction projects. The court's emphasis on the clarity of policy language may encourage insurance companies to draft more precise contracts, while also prompting policyholders to carefully review their agreements before relying on them for coverage. The decision also reinforces the idea that courts will uphold the terms of insurance policies as they are written, without allowing for broad interpretations that could lead to expanded coverage.

Looking ahead, Marcato may consider appealing the court's decision to a higher court. However, it remains to be seen whether there are grounds for such an appeal, as the Appellate Division's ruling was based on clear interpretations of the policy language. Details regarding any potential appeal were not available in the court filing. The outcome of this case could also influence similar cases pending in the appellate courts, as legal principles established in this ruling may be applied to other insurance disputes.