Every day, thousands of construction workers across New York climb ladders, work on scaffolds, operate heavy equipment, and perform physically demanding tasks that keep our cities growing. While most projects are completed safely, it only takes one serious accident to expose contractors, property owners, and general contractors to potentially devastating financial consequences.
Many contractors believe that if one of their employees is injured on the job, Workers’ Compensation will handle the claim and the matter is over. Unfortunately, in New York, that assumption is often wrong.
One of the greatest financial threats facing contractors today is the Action Over claim. These lawsuits have become one of the primary reasons liability insurance premiums continue to rise, underwriting requirements have become more restrictive, and many contractors struggle to obtain affordable coverage.
Understanding Action Over claims is no longer optional. It is essential for every contractor doing business in New York.
What Is an Action Over Claim?
An Action Over claim begins with a workplace injury.
Normally, an injured employee collects Workers’ Compensation benefits from his or her employer. Workers’ Compensation generally prevents employees from suing their own employer for negligence.
However, New York Labor Laws 240 and 241 often allow the injured worker to sue the property owner, general contractor, or construction manager instead.
Once those parties are sued, they frequently seek indemnification from the injured worker’s employer based upon contractual agreements or insurance requirements.
That process is commonly referred to as an Action Over claim.
Instead of one insurance company paying a Workers’ Compensation claim, multiple insurance companies become involved in defending lawsuits that may last for years and cost millions of dollars.
Why Action Over Claims Are So Expensive
The financial impact extends far beyond paying an injured worker’s medical bills.
An Action Over claim can involve:
- Multi-million-dollar jury verdicts
- Extensive legal defense costs
- Expert witness expenses
- Years of litigation
- Higher insurance premiums
- Difficulty obtaining future coverage
- Larger deductibles or self-insured retentions
- Loss of bidding opportunities due to insurance restrictions
In catastrophic injury cases involving permanent disability, brain injuries, paralysis, or death, damages can easily reach several million dollars.
Labor Law 240 Changes Everything
New York’s Labor Law 240, commonly referred to as the Scaffold Law, is unlike laws in almost every other state.
It applies primarily to gravity-related accidents involving falls from heights or injuries caused by falling objects.
If proper safety devices were not provided or failed to protect the worker, owners and general contractors may face significant legal exposure.
Even when multiple parties contributed to the accident, litigation can become extraordinarily complex and expensive.
This is why Labor Law 240 claims receive so much attention from insurance companies and why Action Over exposure is one of the biggest underwriting concerns for New York construction risks.
Insurance Premiums Continue to Rise
Insurance companies carefully evaluate contractors based upon their Action Over exposure.
Several factors affect pricing, including:
- Percentage of residential work
- Height exposure
- Scaffold work
- Roofing operations
- Exterior façade work
- Demolition
- Structural steel
- Safety history
- Prior claims
- Subcontractor management
Contractors with poor loss histories often experience:
- Non-renewals
- Premium increases
- Reduced policy limits
- Restrictive exclusions
- Difficulty finding replacement coverage
For many businesses, one severe Action Over claim can affect insurance costs for years.
Contracts Matter More Than Most Contractors Realize
Many contractors focus only on obtaining the lowest insurance premium.
Unfortunately, they often overlook the language contained in construction contracts.
These contracts frequently require:
- Additional insured status
- Primary and non-contributory coverage
- Contractual liability coverage
- Indemnification agreements
- Waivers of subrogation
- Specific policy endorsements
If these requirements are not satisfied before work begins, the contractor may face expensive disputes after an accident occurs.
The time to review contracts is before signing—not after someone gets hurt.
Safety Is Still Your Best Defense
Insurance protects your business financially, but preventing accidents remains the most effective strategy.
Successful contractors typically invest heavily in:
- Employee safety training
- Daily toolbox talks
- OSHA compliance
- Fall protection systems
- Scaffold inspections
- Ladder safety
- Personal protective equipment
- Jobsite supervision
- Written safety manuals
- Incident reporting procedures
Insurance companies recognize these efforts during underwriting.
Strong safety programs often result in better pricing and broader coverage options.
More importantly, they help workers return home safely every day.
Documentation Can Save Your Business
Following a serious accident, attorneys may request years of documentation.
Examples include:
- Safety meeting records
- Equipment inspection logs
- Employee training records
- OSHA certifications
- Photographs
- Written jobsite inspections
- Signed acknowledgments
- Incident reports
Good documentation demonstrates that safety procedures were consistently followed.
Poor documentation makes defending claims significantly more difficult.
Choosing the Right Insurance Broker Matters
Construction insurance in New York is among the most complicated types of commercial insurance.
Every contractor has different exposures depending upon:
- Trade
- Payroll
- Job size
- Height exposure
- Residential versus commercial work
- Use of subcontractors
- Geographic territory
A broker unfamiliar with Action Over exposure may unknowingly place a contractor into a policy that contains critical exclusions or inadequate protection.
Price alone should never determine which policy you purchase.
The true value of insurance is discovered after an accident—not before.
Protecting Your Business Before the Claim Happens
The best contractors view insurance as part of an overall risk management strategy.
That includes:
- Reviewing contracts before signing.
- Maintaining strong safety programs.
- Hiring qualified subcontractors.
- Verifying insurance certificates and endorsements.
- Working with experienced legal counsel when necessary.
- Conducting annual insurance reviews.
- Purchasing adequate liability limits.
- Understanding Labor Law exposure.
Waiting until after an accident occurs is simply too late.
The cost of prevention is almost always far less than the cost of litigation.
BGES Group—Helping New York Contractors Protect Their Businesses
At BGES Group, construction insurance isn’t just one of the services we offer—it’s our specialty. For more than 45 years, Gary Wallach has helped contractors throughout New York, New Jersey, and Connecticut navigate the complex world of construction insurance and risk management.
We understand the challenges contractors face every day, from Action Over claims and Labor Law exposure to Workers’ Compensation audits, contractual insurance requirements, and obtaining affordable, comprehensive coverage.
BGES Group represents more than 50 insurance companies, allowing us to compare multiple options to help contractors secure the protection they need. We provide General Liability, Umbrella Liability, Workers’ Compensation, Commercial Auto, Builders Risk, Inland Marine, Bid and Performance Bonds, Group Health Insurance, New York State Disability Benefits, and many other specialized coverages.
Whether you’re a general contractor, subcontractor, or specialty trade contractor, we’ll review your current insurance program, identify potential gaps, and help you build a stronger risk management strategy that protects both your business and your bottom line.
If you’d like a complimentary review of your current insurance program or have questions about Action Over exposure, we’d be happy to help.
Contact – Gary Wallach
Phone:914-806-5853
Email: bgesgroup@gmail.com
Website: www.bgesgroup.com