If you’re a New York contractor relying on surplus lines for your Commercial General Liability (CGL) insurance, beware: these policies often contain serious limitations that can leave you dangerously exposed when claims arise.
Here are 10 of the most frequent and costly pitfalls we see:
1️⃣ Labor Law 240/241 Exclusions
Also known as the Scaffold Law, these are among the most expensive claims in NY construction. Many surplus lines policies exclude or heavily limit this coverage—putting contractors at major financial risk.
2️⃣ Action-Over Exclusions
If an injured employee sues a property owner or GC, and that party turns around and sues the contractor, coverage is often denied under these exclusions—leaving contractors to cover huge legal bills.
3️⃣ Height & Depth Work Restrictions
Coverage may not apply to:
- Work above a certain height (e.g., 3 stories / 20 feet)
- Work below a specific depth (e.g., 5–10 feet)
Ignoring these can result in denied claims.
4️⃣ Subcontractor Warranty Endorsements
Many policies require:
- Proof of insurance from all subs
- Specific limits, AI status, Waiver of Subrogation
Failure to comply = no coverage for sub-related claims.
5️⃣ Designated Operations Only
Coverage is often limited to specifically listed work. Any operations outside of that = no coverage.
6️⃣ Completed Operations Limitations
Some policies limit or exclude claims after a project is done—critical exposure given the long-tail nature of construction liability.
7️⃣ Limited Additional Insured Coverage
Many AI endorsements only apply:
- During ongoing operations
- Not to the AI’s sole negligence
This can jeopardize contract compliance with GCs and owners.
8️⃣ High Deductibles / SIRs
Expect deductibles or self-insured retentions of $10K–$50K per occurrence. That’s out-of-pocket before the insurer even gets involved.
9️⃣ Poor Claims Handling
Claims are often managed by TPAs unfamiliar with NY labor laws—leading to delays, denials, and expensive mismanagement.
🔟 Policy Endorsements That Limit Coverage
Policies typically contain numerous subtle endorsements that restrict coverage. Many contractors only find out after a claim—when it’s too late.
✅ How BGES Group Protects NY Contractors
We help you stay protected by:
✔️ Reviewing your current policies for dangerous exclusions
✔️ Securing proper Labor Law 240/241 & action-over coverage
✔️ Providing full completed ops & AI protection
✔️ Offering policies with fewer height, depth, and subcontractor restrictions
✔️ Working only with A-rated carriers who understand NY construction
✔️ Ensuring claims are handled by pros familiar with NY labor law
📞 Let’s Talk:
Gary Wallach
📱 914-806-5853
📧 bgesgroup@gmail.com
🌐 www.bgesgroup.com
🛡️ Your trusted insurance partner for New York contractors.