A $40.3-million jury verdict against Canadian Indemnity Co. has been reduced to $4.8 million by Los Angeles Superior Court Judge James G. Kolts. Tan Jay International Ltd., a Canadian sportswear firm, won the verdict last June because the insurer refused to honor a business liability policy. Tan Jay was found liable for injuring a man while towing a sailboat for use as an advertising prop near Marina del Rey and had to pay him about $2 million in damages. Kolts said the jury’s award of $5,298,178.71 in compensatory damages and $35 million in punitive damages against the insurance company was excessive and unsupported by the evidence. He reduced the amounts to $4,273,257 in compensatory damages and $500,000 in punitive damages.