Sourcing New York Construction Liability Insurance

New York General Contractor Insurance Explained

From Long Island to Staten Island, construction projects are almost a mainstay of New York’s biggest cities. That’s good news for general contractors, who are reaping the rewards of this booming sector. But these contractors also have some unique insurance needs due to local labor laws. In this article, we’ll break down the special construction insurance circumstances for general contractors in New York. We’ll also look at how insurance agents can source niche policies for these unique conditions. 

What Makes Construction Insurance in New York Different?

New York State is known for having strict labor laws. According to the local Industrial Code, general contractors can be held fully liable for any damages caused by the negligent acts of their employees or subcontractors. Because of this, basic liability insurance may not meet the coverage needs of these clients. Insurance agents can help fill these gaps with supplemental insurance policies, which we’ll discuss later in the article.

Required Policies for General Contractors in New York

First, let’s review the basics. There are the policies that general contractors working in New York are required to have, and thus are easier for insurance agents to source:

• General Liability Insurance: NYC requires this of contractors so that they’re protected in the event of construction site accidents that could lead to damage of client property or even the client themselves as long as these accidents resulted from business operations.
• Worker’s Compensation Insurance: Worker’s compensation insurance helps construction businesses cover the financial cost of employees injured on the job.
• Commercial Auto Insurance: A policy can provide coverage for expenses related to vehicle theft, vandalism, or weather damage, as well as vehicular accidents, such as medical bills or property damage.
• Disability Benefits Insurance: New York State is one of only a few in the country that require employers to provide disability benefits for off-the-job injury and illness, and this policy can help cover that cost.

However, these standard policies can leave gaps in coverage. Let’s look at some specialty insurance products that can meet these needs, the circumstances that might necessitate them, and how agents can source them.

Common Supplemental Policies for General Contractors in New York

Commercial Umbrella Insurance

It’s common for general liability to be supplemented with commercial umbrella insurance. These policies provide additional protection beyond that offered by the limits of general liability. That means that if a general contractor’s liability coverage reaches its limit, excess payments can be covered by the umbrella policy. This offering can also be used to supplement commercial auto insurance and worker’s compensation insurance.

Builder’s Risk Insurance

Builder’s risk insurance protects buildings while they are under construction. General contractors may want to invest in a builder’s risk policy to protect against the cost of potential damage done to an ongoing construction project. This includes damage caused by factors that are usually outside a general contractor’s control, including:

• Vandalism
• Theft
• Fire
• Explosions
• Hail
• Lightning
• Theft
• "Acts of God," such as natural disasters

Professional Liability Insurance

Professional liability insurance can cover legal expenses resulting from professional errors. This includes being sued by stakeholders for missing a deadline, professional negligence, or errors that caused the client financial damage.

Special Cases Where High Insurance Coverage is Required

Special scenarios may arise for New York general contractors that necessitate higher levels of coverage than what might be included under the standard policies, such as:

Projects that use tower cranes

These projects are at higher risk due to the operation of heavy machinery at great heights. For example, a 1999 accident in Milwaukee, WI, involving the collapse of a “Big Blue” Lampson LTL-1500 Transi-Lift crane led to the deaths of three workers. The construction firms involved were held liable for over $99 million in damages.

Scaffold Law

New York projects that involve scaffolding may need additional liability coverage. This is because of the 1885 Scaffold Law, which holds construction companies fully liable for employee injuries caused by falls while working at high elevations without sufficient safety equipment.

High-rise construction

High-rise construction projects may also require additional liability coverage. These projects tend to have a greater risk of property damage and worker injury, primarily due to the great heights involved.

Historical property

Historical properties have special protections and regulations in most American states, and New York is no different. In NYC, obtaining a work permit for historical buildings requires going through the Landmarks Preservation Commission. Violating LPC regulations or damaging a historic property can incur heavy fines beyond those typically encountered on a construction project, thus necessitating additional coverage.

Where to Source Specialty New York Contractor Insurance

Connecting with wholesale insurance brokers is a good way to streamline the entire process of getting specialized insurance for clients. Wholesale brokers can help customize contracts to meet the needs of your clients, find an insurance carrier willing to take on the financial risk, and connect you with other clients looking for similar types of insurance.

Here are some things to consider when choosing a wholesaler:

• Experience with industry and specialty insurance line expertise
• Types of wholesale products available and their pricing
• Quality of customer service
• Extent of the insurance network
• Quality of the claims process

New York Construction Insurance With Novatae

Having the right construction insurance is crucial for general contractors working in New York. It can provide coverage for unexpected as well as standard risks. 

At Novatae, we combine the services of wholesale insurance brokers and MGAs. If you’re looking for specialty coverage, our teams of industry experts can connect you with policies for all of your clients’ specific needs. 

For more information about New York construction insurance, or to get started with a free quote, contact us.

This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.