Let’s walk through a real-world example that could easily happen to a New York contractor.
You’re an HVAC contractor. Your Commercial General Liability (CGL) policy is written through a surplus lines carrier (meaning it’s not a standard admitted policy). On top of that, your policy includes a Contractors Limitation Endorsement — which means your liability coverage is restricted to specific types of work listed on your policy. In your case, the endorsement says you are covered for HVAC work only.
Now, you subcontract out some sheetrock work on a project. You hire a reputable sheetrock contractor, and per your contract, they add you as an additional insured on their liability policy.
But here’s the question… if your subcontractor causes an accident — let’s say they damage property or injure someone — and you get sued along with them, will your own CGL policy step in to defend you?
The Short Answer: Probably Not
Here’s why: The Contractors Limitation Endorsement in your surplus lines policy says you are only covered for the type of work listed — in this case, HVAC. If the claim involves sheetrock work (or any trade not listed), your insurer will likely deny coverage.
It doesn’t matter if you weren’t swinging the hammer yourself. If the accident arises from work outside your covered classification, the insurer can argue that it’s not part of your insured operations.
But You’re an Additional Insured on the Subcontractor’s Policy
This is where your contract with the sheetrock subcontractor becomes critical. If you were properly added as an additional insured on their liability policy, that policy should respond to claims arising out of their work — including defending you in the lawsuit.
However, there are some catches:
1. Policy Language – Some additional insured endorsements only cover you for “ongoing operations,” not completed work. If the claim happens after the sheetrock is done, you could be out of luck.
2. Exclusions – If their policy excludes certain work or has its own subcontractor restrictions, you could still face denial.
3. Carrier Solvency – A certificate of insurance is only as good as the actual policy behind it.
The Bottom Line for New York Contractors
If you’re operating with a surplus lines CGL policy and a Contractors Limitation Endorsement, you must be extremely careful about what work you subcontract. Always:
• Review the limitation endorsement to understand exactly what’s covered.
• Require subcontractors to add you as an additional insured and provide the actual endorsement, not just a certificate.
• Work with an insurance specialist who can identify dangerous gaps before a claim exposes them.
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About BGES Group
BGES Group is a specialist insurance agency focused on protecting contractors throughout New York, New Jersey, and Connecticut. We understand the complex, high-risk nature of the construction industry and how policy endorsements, exclusions, and subcontractor relationships can make or break your coverage.
Whether you’re an HVAC contractor, general contractor, or specialty trade, we’ll review your current policies, identify dangerous gaps, and recommend programs that actually respond when you have a claim — not just when you pay your premiums.
We represent top carriers, including those with broad coverage for subcontracted work, strong additional insured provisions, and fewer “gotcha” endorsements that can leave you exposed.
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📞 Contact BGES Group Today
• Gary Wallach – Workers’ Compensation & Contractor Liability Specialist
• Phone: 914-806-5853
• Email: bgesgroup@gmail.com
• Website: http://www.bgesgroup.com
BGES Group — Protecting Contractors, Closing Coverage Gaps, and Fighting for You When It Matters Most.