Travelers Loses Clothing Company Appeal Over Burned Goods

A New York apparel company won its appeal against a Travelers Companies, Inc. unit after the Second Circuit said the parties’ insurance contract was ambiguous and must be read in favor of the policyholder.

Travelers Indemnity Co. must pay the full $600,000 policy limit to Ezrasons, Inc. for garments damaged by fire in a North Carolina warehouse, said the US Court of Appeals for the Second Circuit Tuesday. The appeals court vacated the lower court’s decision siding with the insurer and sent the case back to the district court for further proceedings.

“New York law dictates that the ambiguity should ...