Colonial Indemnity Insurance Company was incorporated in New York as the Charter Indemnity Company on September 13, 1961 and commenced business on August 24, 1962.  It adopted its present name on March 10, 1986.

The Company was placed into rehabilitation and the New York Superintendent of Insurance was appointed as Rehabilitator on September 6, 2007, by order of the Supreme Court of the State of New York.

An order of liquidation was entered against Colonial Indemnity Insurance Company on July 7, 2009, by order of the Supreme Court of the State of New York.