A town’s insurance company can seek indemnification from acontractor over damage to its municipal building, even after thecontractor’s insurer obtained a court order rescinding its policy,the New Jersey Superior Court Appellate Division has ruled.

Travelers Property Casualty Co. of America, theinsurance company for the town of Cliffside Park, had anindependent right to seek relief against the construction company’sinsurer, no matter what occurred in litigation between theconstruction company and its insurer, the appeals court said Dec.29 in Everest Indemnity Insurance v. Tim TigerEnterprises. Everest claimed the judgment against itsinsured, Tim Tiger Enterprises, represented an adjudication of allissues in the case, but Judges Clarkson Fisher Jr., George Leoneand Francis Vernoia said “Nothing could be more absurd.”

The case stems from the October 2012 collapse of a water towerperched atop the Cliffside Park Municipal Building, which caused $2million in property damage. Travelers, which insured CliffsidePark, paid for much of the damage. A few months earlier, Tim TigerEnterprises (TTE) was contracted to replace an old tower on top ofthe building. After the tower collapsed, TTE gave notice of claimto its insurer, Everest Indemnity Insurance Co.

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