As a contractor operating in New York, understanding the nuances of general liability coverage is critical to safeguarding your business. One of the most crucial elements of this coverage involves claims related to New York’s unique Labor Laws, particularly Labor Law 240 and 241. These laws make project owners and general contractors strictly liable for injuries sustained by workers due to falls from heights or other specific construction-related accidents, even if the contractor wasn’t directly responsible for the incident.
If your general liability policy excludes labor law claims, your business could be left financially vulnerable. Let’s explore the consequences of such exclusions through three real-world examples.
What Happens if Labor Law Claims Are Excluded?
When a contractor’s general liability policy excludes labor law claims, the contractor is not covered in the event of an accident that triggers a Labor Law 240 or 241 claim. Without this crucial coverage, the costs of defending the claim and any subsequent settlements or judgments would fall directly on the contractor. This could mean hundreds of thousands or even millions of dollars in liability—jeopardizing your business’s future.
Example 1: A Worker Falls from Scaffolding
Scenario: A subcontractor’s employee is working on a project that requires him to work on scaffolding 15 feet off the ground. Unfortunately, the scaffolding collapses, and the worker falls, sustaining serious injuries.
Claim Type: The injured worker files a lawsuit against the general contractor under Labor Law 240, which is also known as the “Scaffold Law.” This law imposes strict liability for falls from heights, regardless of the precautions taken.
Why There Is No Coverage: If the general contractor’s liability policy excludes labor law claims, the contractor will be responsible for paying the legal defense costs and the full amount of any judgment or settlement. Even if the contractor had taken every reasonable safety precaution, they would still be held liable under Labor Law 240. Without proper coverage, the contractor could be responsible for a significant financial loss.
Example 2: A Worker Is Injured by Falling Debris
Scenario: A worker is standing at ground level when a heavy object falls from an upper level of the construction site, striking him and causing serious injuries.
Claim Type: The injured worker sues the project owner and general contractor under Labor Law 241(6), which covers safety violations at construction sites, including injuries caused by falling debris.
Why There Is No Coverage: Labor Law 241(6) holds contractors accountable for failing to maintain a safe work environment. If the contractor’s general liability policy excludes labor law claims, they would have no financial protection for legal fees or settlements. This leaves the contractor personally liable for the costs associated with the claim, which could quickly escalate to hundreds of thousands or millions of dollars.
Example 3: A Ladder Accident Results in a Serious Injury
Scenario: A subcontractor’s employee is using a ladder to install wiring at a construction site. The ladder malfunctions, causing the worker to fall and suffer multiple fractures.
Claim Type: The worker files a Labor Law 240 claim against the general contractor, holding them responsible for the faulty ladder and the resulting injury, even though the ladder was provided by the subcontractor.
Why There Is No Coverage: Even though the general contractor may not have been directly responsible for the ladder’s malfunction, under Labor Law 240, they are held strictly liable. If labor law claims are excluded from their general liability policy, the contractor would be fully responsible for the cost of the lawsuit and any damages awarded, which could bankrupt smaller firms or severely impact the financial health of larger ones.
Why Labor Law Coverage Is Essential for New York Contractors
As these examples show, New York’s Labor Laws can expose contractors to significant financial risk. Even if your company follows all safety protocols and regulations, you can still be held liable for worker injuries under Labor Law 240 and 241. Without labor law coverage as part of your general liability insurance, a single claim could cause severe financial strain, damage your business’s reputation, and in some cases, lead to the shutdown of your operations.
How BGES Group Can Help
Navigating the complexities of New York labor law and securing comprehensive liability insurance coverage can be challenging. That’s why partnering with a construction insurance expert like BGES Group is crucial. At BGES Group, we specialize in helping New York contractors find the best liability insurance coverage at competitive rates, ensuring that labor law claims are included and your business is protected.
Our team has deep expertise in the insurance needs of construction professionals, and we work closely with you to tailor a policy that fits your business. Don’t leave your business exposed to the risks of labor law claims—let BGES Group provide the coverage and peace of mind you need.
Contact BGES Group Today
If you need help securing comprehensive general liability insurance, including coverage for New York Labor Law claims, reach out to BGES Group today. As one of New York’s leading construction insurance specialists, we are here to assist you with all your insurance needs.
Contact Gary Wallach
Phone: 914-806-5853
Email: bgesgroup@gmail.com
Protect your business with the right coverage—contact BGES Group today to learn how we can help you secure the insurance you need.