New York contractors operate in one of the most heavily regulated, high-risk construction environments in the country. Between strict labor laws, aggressive claim activity, rising premiums, and contract requirements that can make or break a job, contractors constantly face insurance challenges that threaten their profitability — and sometimes their survival.
Below are the five biggest business insurance concerns New York contractors deal with every single day… and what you can do to stay protected.
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1. Out-of-Control Workers’ Compensation Costs
Workers’ compensation in New York is notoriously expensive — especially for construction classes. Many contractors see premiums increase year after year, even when they have no large losses. Common reasons include:
• Misclassified payroll
• Carriers increasing rates for specific construction trades
• Experience modification factors (“mods”) rising unfairly
• Poorly documented subcontractor certificates
• Carriers unwilling to write or renew coverage
A huge concern is unexpected audits. Contractors often get hit with large additional premiums because payroll didn’t match estimates, the carrier changed classification codes, or subcontractor documentation was missing.
Solution: Work with a specialist who manages classification, audit preparation, subcontractor tracking, and compliance so your costs stay predictable.
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2. Labor Law Exposure — The Silent Killer
New York Labor Law §§ 240(1), 241(6), and 200 create strict liability for contractors and property owners when a worker falls or is injured on the job. This means:
• Even if the contractor isn’t directly responsible, they may still be held liable.
• Claims regularly reach seven-figure payouts.
• Many insurance carriers avoid New York construction risks because of this alone.
Contractors constantly worry whether their General Liability policy truly covers them — and whether exclusions like Action Over, Height Work, or Subcontractor Injury will gut their protection.
Solution: Ensure your GL policy specifically covers Labor Law exposure, has no harmful subcontractor exclusions, and is placed with a carrier that truly understands New York construction.
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3. Incomplete or Incorrect Additional Insured Coverage
This is one of the top reasons contractors lose jobs or face lawsuits they thought they were protected from.
General contractors and property owners require:
• Additional Insured status
• Primary & Non-Contributory wording
• Waivers of Subrogation
• Completed Operations coverage
• Ongoing Operations coverage
• Specific endorsements aligned with the contract
If a contractor fails to meet these exact requirements, they may be kicked off the job… or forced to pay a claim that should have been covered.
Solution: Have your insurance specialist review every contract before you sign it, and ensure endorsements match contractual language line-by-line.
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4. Subcontractor Risk — The Hidden Landmine
Most lawsuits involving contractors begin with something a subcontractor did — or failed to do. Common problems include:
• Uninsured or underinsured subs
• Subs providing fraudulent certificates
• Policies with dangerous exclusions
• Subs cancelling policies mid-job
• Lack of contractual hold-harmless agreements
If a subcontractor injures someone and they don’t have the right insurance, the general contractor is usually held responsible, even if the GC had nothing to do with the accident.
This becomes even more dangerous because many insurance carriers will deny coverage if subcontractors are not properly insured and documented.
Solution: Use a strict subcontractor verification system and never allow a sub on-site without full documentation and contract compliance.
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5. Builder’s Risk Confusion — Who Covers the Project?
Contractors constantly face questions like:
• Who insures the project — the owner or contractor?
• Does the policy cover materials stored off-site?
• Are tools and equipment included?
• Does the policy cover soft costs like permits or engineering?
• Will the lender accept the policy?
Builder’s Risk is one of the most misunderstood coverages, and a mistake can mean a contractor absorbs a six-figure loss.
Solution: Have your insurance advisor clearly outline who carries the policy, what’s covered, what’s excluded, and whether contract documents support your position.
Where Contractors Go Wrong
Many New York contractors simply buy insurance from brokers who don’t specialize in construction — and that is where major problems start. Construction is a unique, high-risk, highly regulated segment that requires deep knowledge of Labor Law, contract risk transfer, workers’ compensation, GL exclusions, and carrier appetite.
This is why the broker you choose matters as much as the policy itself.
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BGES Group — New York’s Premier Construction Insurance Specialists
At BGES Group, construction insurance is all we do. We understand the real-world challenges you face because we deal with them every single day.
Contractors work with us because:
• We know the carriers that want New York construction
• We eliminate harmful exclusions before policies are issued
• We prep contractors for audits so they avoid surprise bills
• We review contracts to protect you from upstream liability
• We manage certificates, subcontractors, and compliance
• We aggressively shop renewals so you never overpay
• We solve problems quickly — usually the same day
• We become your “insurance department” so you can focus on building
Our job is simple: Keep New York contractors protected, compliant, and profitable.
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Contact BGES Group Today
If you’re a contractor working in New York, you deserve an insurance specialist who understands your world and fights for you.
BGES Group — Construction Insurance Specialists
📍 Serving New York & the Entire Tri-State Area
📞 Gary Wallach: 914-806-5853