In New York construction, few issues create more financial damage than misunderstanding additional insured requirements.
Many contractors believe that having liability insurance and providing a certificate is enough. It’s not.
Under New York Labor Law 240, New York Labor Law 241, and New York Labor Law 200, contractors are routinely pulled into lawsuits—even when they did nothing wrong.
And when additional insured coverage isn’t set up properly, that exposure can turn into a six- or seven-figure loss.
What “Additional Insured” Really Means
Being named as an additional insured allows another company’s insurance policy to protect you for claims arising out of their work.
Example:
A general contractor hires a subcontractor
The subcontractor agrees to add the GC as additional insured
If an accident occurs, the subcontractor’s policy may defend the GC
This is the foundation of risk transfer in construction—but it only works if done correctly.
⚠️ Certificates of Insurance Are NOT Coverage
This is one of the biggest (and most expensive) misconceptions in construction.
A certificate of insurance:
Only shows a policy existed on the date issued
Does NOT guarantee coverage
It does not confirm:
Additional insured status is properly added
The correct endorsement is in place
Coverage applies to the specific job
The policy will respond to a Labor Law claim
👉 Claims are paid based on policy wording—not certificates
Why This Matters Under New York Labor Law
New York Labor Law allows injured workers to sue parties beyond their employer, including:
Property owners
General contractors
Construction managers
Subcontractors
Under New York Labor Law 240, owners and general contractors can be held liable for gravity-related injuries—even without negligence.
That’s why contracts require downstream parties to provide additional insured protection upstream.
If that protection fails?
👉 The subcontractor often becomes the financial target.
🚧 The Most Common (and Costly) Mistakes
1. Not reading the contract Insurance requirements are often more demanding than standard policies.
2. Using the wrong endorsement
Ongoing operations only ≠ full protection
Completed operations coverage is often required
3. Missing required parties Owners, GCs, construction managers, lenders, and others may all need to be included.
4. Ignoring policy exclusions Height work, residential work, or trade-specific exclusions can void coverage.
5. Fixing it too late If coverage isn’t correct before work starts, it’s usually too late.
How Claims Actually Play Out
A worker falls from a ladder.
Workers’ comp covers the injury
The worker sues the GC and owner under New York Labor Law 240
The GC tenders the claim to the subcontractor
If the subcontractor’s policy isn’t written correctly:
👉 The claim may be denied
Now the subcontractor could be responsible for:
Legal defense
Settlements
Judgments
This is how a simple mistake becomes a million-dollar problem.
Smart Contractors Do This BEFORE Signing
Before agreeing to any contract:
Confirm your policy allows required endorsements
Make sure limits meet contract requirements
Verify Labor Law exposure is covered
Ensure all parties can be added as additional insured
If something doesn’t work—negotiate it upfront.
Signing first and fixing later is one of the biggest causes of uncovered claims.
Why Your Broker Matters
New York construction insurance is highly specialized.
You need a broker who understands:
Labor Law exposure
Risk transfer strategy
Additional insured wording
Contract review
High-risk trades
Because one mistake can cost more than your entire premium.
How BGES Group Helps
At BGES Group, we specialize in construction insurance for contractors across New York, New Jersey, and Connecticut.
We help:
Review contracts before you sign
Structure proper additional insured coverage
Secure compliant liability policies
Provide workers’ compensation for all trades
Most contractors call after there’s a problem.
Our goal is to make sure that problem never happens.
For contractors and business owners across New York, New Jersey, and Connecticut, few issues create more confusion—and more financial risk—than the distinction between independent contractors and employees. Many business owners assume that issuing a 1099 instead of a W-2 automatically removes their responsibility for Workers’ Compensation coverage. Unfortunately, that assumption is one of the most expensive mistakes you can make.
Misclassifying workers doesn’t just create paperwork problems—it can lead to denied claims, massive audit charges, policy cancellations, and even legal penalties. Understanding how Workers’ Compensation laws treat independent contractors is critical if you want to protect your business and avoid costly surprises.
The Misconception: “They’re 1099, So I’m Not Responsible”
Let’s start with the most common misunderstanding: if someone is paid as an independent contractor, they are not your responsibility.
From an insurance and legal standpoint, that is often not true.
Workers’ Compensation laws—especially in New York—focus less on how you pay someone and more on the nature of the working relationship. If you control how, when, and where the work is performed, there’s a strong chance that worker will be considered your employee, regardless of whether you issue them a 1099.
This means that if a “1099 contractor” gets injured on your job site, the state or your insurance carrier may determine that they were actually your employee all along. And when that happens, the financial consequences can be severe.
How States Determine Employee Status
Each state has its own criteria, but most look at similar factors when determining whether someone is truly an independent contractor:
Control: Do you dictate how the work is performed, or just the final result?
Tools and Equipment: Who provides the materials and tools?
Exclusivity: Does the worker perform services for multiple companies, or just you?
Payment Structure: Are they paid per project or on a regular schedule like an employee?
Supervision: Are they working independently or under your direct oversight?
In construction, it’s especially difficult to justify independent contractor status because the work is often closely supervised and integrated into your overall project.
Real-World Scenario: The Costly Claim
Imagine this: you hire a subcontractor to perform drywall installation. He doesn’t have his own Workers’ Compensation policy, but he agrees to work under a 1099 arrangement. Everything seems fine—until he falls from a ladder and suffers a serious injury.
He files a claim.
At that point, the insurance carrier investigates and determines:
He worked exclusively for you
You provided the materials
You supervised the job
Result? He’s classified as your employee.
Now you’re facing:
A Workers’ Compensation claim charged against your policy
Increased premiums due to the loss
Potential penalties for uninsured exposure if he wasn’t included in payroll
A possible audit adjustment adding his wages retroactively
What started as a cost-saving decision quickly turns into a financial nightmare.
The Audit Trap
Even if no one gets injured, misclassifying workers can come back to haunt you during a Workers’ Compensation audit.
Insurance carriers routinely review:
Payroll records
1099 payments
Certificates of insurance from subcontractors
If you cannot provide valid certificates of insurance for your independent contractors, the auditor will often include their payments as payroll under your policy.
This means you could be charged premium on money you already paid out—sometimes going back multiple years.
For contractors running tight margins, these surprise audit bills can be devastating.
Certificates of Insurance Are Not Optional
One of the most important protections you have is collecting proper documentation from anyone you classify as an independent contractor.
At a minimum, you should always obtain:
A valid Workers’ Compensation Certificate of Insurance
A General Liability Certificate of Insurance
And don’t just collect them—verify them. Make sure:
The policy is active
The coverage matches the work being performed
The policy belongs to the actual business entity doing the work
If a subcontractor cannot provide a Workers’ Compensation certificate, you should assume you are responsible for covering them.
The Legal and Financial Consequences
Misclassification isn’t just an insurance issue—it can also trigger regulatory action.
Potential consequences include:
State fines and penalties
Stop-work orders
Liability for medical expenses and lost wages
Increased scrutiny from insurance carriers
Difficulty obtaining coverage in the future
In New York especially, enforcement is aggressive. The state actively investigates employers suspected of avoiding Workers’ Compensation obligations, and the penalties can be significant.
Risk Transfer Strategies That Actually Work
The good news is that there are clear, practical steps you can take to protect your business:
1. Require Certificates Before Work Begins Never allow a subcontractor on-site without verified insurance.
2. Use Written Agreements Contracts should clearly define responsibilities, including insurance requirements and indemnification language.
3. Work With Legitimate Subcontractors Avoid individuals who operate without proper business structure or insurance coverage.
4. Maintain Organized Records Keep all certificates, agreements, and payment records easily accessible in case of an audit.
5. Review Your Policy Regularly Make sure your Workers’ Compensation policy properly reflects your operations and risk exposure.
The Bottom Line
Trying to save money by classifying workers as independent contractors instead of employees is a gamble that rarely pays off. In today’s regulatory environment—especially in the construction industry—the risk far outweighs the reward.
The reality is simple: if a worker looks like your employee, acts like your employee, and works under your direction, there’s a strong chance the state and your insurance carrier will treat them as your employee.
And when something goes wrong, it’s your business that will be held responsible.
Taking the time to properly classify workers, collect documentation, and implement risk transfer strategies isn’t just good practice—it’s essential for protecting your company’s financial future.
BGES Group is one of New York, New Jersey, and Connecticut’s Construction Insurance Specialists representing 25+ companies, including all the BEST general & umbrella liability programs. We offer all the coverage needed, including property, builders’ risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers’ compensation, N.Y.S. disability, and group health. Our commitment to you goes beyond the policies we provide. We are always just a call, text, or email away, ready to assist you, even on weekends. We understand the importance of your business and are here to help you navigate any insurance challenges.
BGES Group are Workers’ Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being canceled, losses causing difficulty getting coverage, in the middle of an audit dispute, misclassified payrolls, or whatever your issue. We can help! We have special programs for Auto Services, Contractors (especially in New York), Limousine Services, Logistics Companies, Manufacturers, Recyclers, and Truckers; we can help ANY tri-state business owner. We are considered “Preferred Agents” for this one program that, if we can get you into, their pricing is excellent, offers long-term coverage stability, and can cover multi-state operations. The program takes the hassle out of doing annual audits, too.
If you are a contractor working in New York, there is one law that can create more financial damage than almost anything else on a job site. That law is
New York Labor Law 240 commonly known as the Scaffold Law.
Many contractors believe that if they carry workers’ compensation and general liability insurance, they are protected. Unfortunately, that is not always true in New York. Labor Law 240 is one of the strictest construction laws in the country, and it can make contractors, subcontractors, property owners, and general contractors responsible for injuries even when the worker caused the accident.
Understanding how this law works is critical for anyone working in construction, renovation, demolition, roofing, drywall, concrete, or any trade where work is performed at heights.
⸻
What Is New York Labor Law 240?
Labor Law 240 applies to accidents involving gravity-related risks. This includes situations where a worker falls from a height or is struck by a falling object.
Common examples include:
• Falling from a ladder
• Falling from scaffolding
• Falling from a roof
• Falling from a lift
• Being hit by falling materials
• Improperly secured equipment
• Unsafe work platforms
Under this law, the responsibility for safety does not fall only on the worker. Instead, the law places responsibility on:
• Property owners
• General contractors
• Subcontractors
• Construction managers
If proper safety devices were not provided, those parties can be held liable even if the worker made a mistake.
⸻
Why Labor Law 240 Is So Dangerous for Contractors
Unlike many other states, New York applies what is called absolute liability under Labor Law 240.
This means that if a worker is injured in a gravity-related accident, the contractor or owner may be responsible even if:
• The worker ignored instructions
• The worker used equipment incorrectly
• The worker was partially at fault
• The accident happened very quickly
• Safety rules were posted
Courts often rule that if proper protection was not in place, the contractor can still be liable.
Because of this, one ladder accident can turn into a lawsuit worth hundreds of thousands or even millions of dollars.
⸻
Workers’ Compensation Does NOT Stop Labor Law Lawsuits
Many contractors believe that workers’ compensation protects them from lawsuits. That is only partially true.
Workers’ compensation usually prevents the employee from suing their own employer directly, but under Labor Law 240 the worker can still sue:
• The property owner
• The general contractor
• Other subcontractors
• Construction managers
Once that lawsuit starts, the general contractor or owner may bring the subcontractor into the case through indemnification clauses in the contract.
This means a contractor who thought they were protected by workers’ compensation can suddenly be facing a major liability claim.
⸻
Real Job Site Situations That Trigger Labor Law 240
Here are real situations that commonly lead to claims:
• A painter falls off a ladder while doing touch-up work
• A roofer slips while installing shingles
• A drywall worker falls from a scaffold
• A laborer is hit by falling debris
• A worker falls through an opening
• A lift tips over
• Materials fall from above
Even small jobs can lead to big lawsuits. Labor Law 240 does not only apply to large construction projects. It can apply to residential, commercial, and renovation work.
⸻
Why Insurance Must Be Structured Correctly
Because of Labor Law 240, contractors in New York must have the right insurance structure, not just a policy.
Important coverages may include:
• Workers’ Compensation
• General Liability with proper limits
• Excess / Umbrella Liability
• Additional insured endorsements
• Primary and non-contributory wording
• Contractual liability coverage
• Waiver of subrogation when required
Many contractors buy insurance based only on price, not realizing their policy may not respond properly in a Labor Law claim.
In New York construction, the difference between the right policy and the wrong policy can mean the difference between staying in business or losing everything.
⸻
Contracts Make the Risk Even Bigger
Most construction contracts today contain strong indemnification clauses.
These clauses often say the subcontractor must defend and indemnify the general contractor or owner if an accident happens.
That means even if the subcontractor did not cause the accident, they may still be responsible for paying legal costs or damages.
This is why it is critical to review contracts before signing them and to make sure your insurance matches what the contract requires.
Too many contractors sign agreements without understanding the exposure they are taking on.
⸻
Why New York Is Different From Other States
Many contractors who come from other states are shocked when they work in New York.
In most states:
• Fault matters
• Workers cannot easily sue third parties
• Liability is more limited
In New York, Labor Law 240 makes construction much more risky.
That is why insurance companies are very strict when insuring New York contractors, and why gaps in coverage or incorrect policies can create serious problems.
⸻
How BGES Group Helps New York Contractors Protect Themselves
At BGES Group, we specialize in helping contractors understand and protect themselves from the risks created by New York labor laws, including Labor Law 240.
We work with contractors in:
• Construction
• Drywall
• Roofing
• Demolition
• Concrete
• Carpentry
• Mechanical trades
• All subcontractor classifications
We help make sure your insurance is structured correctly so that if an accident happens, you are not left exposed.
We also help review contracts, check coverage requirements, and make sure your policies meet what general contractors and property owners require.
Many contractors come to us after a problem starts. Our goal is to help you avoid the problem before it happens.
If you are working in New York, you cannot afford to guess when it comes to Labor Law coverage.
If you’re a contractor working in New York, you’ve likely heard the term “Action Over Claim” tossed around by insurance brokers, attorneys, or project owners. But many contractors don’t fully understand what it means—until it becomes a serious and expensive problem. In a state known for its strict labor laws and high litigation rates, Action Over claims can significantly impact your business, your insurance costs, and even your ability to win future jobs.
Let’s break down what Action Over claims are, why they matter, and how they can affect your operation as a New York contractor.
What Is an “Action Over” Claim?
An Action Over claim arises when an injured worker sues a third party (usually a property owner or general contractor), and that third party then “actions over” against the injured worker’s employer—typically a subcontractor—to recover damages.
Here’s the key point: Even though workers’ compensation laws generally prevent employees from suing their own employer directly, New York’s Labor Law creates exceptions that allow other parties to bring the employer back into the lawsuit.
This is most common under New York Labor Law Sections 200, 240(1), and 241(6)—especially Labor Law 240, often referred to as the “Scaffold Law,” which imposes absolute liability on owners and general contractors for gravity-related injuries.
Why Action Over Claims Are a Big Deal
For contractors, Action Over claims can be devastating for several reasons:
Circumvents Workers’ Comp Protection: Normally, workers’ compensation is your exclusive remedy. But Action Over claims reopen liability exposure.
Triggers General Liability Policies: These claims often fall under your General Liability (GL) or Umbrella policies, not Workers’ Comp.
Drives Up Insurance Costs: Carriers view Action Over exposure as high risk, especially in New York.
Contractual Risk Transfer: Many contracts require subcontractors to indemnify owners and GCs, increasing your exposure even further.
In short, even if you did nothing wrong, you can still be pulled into a lawsuit and face substantial financial consequences.
How Action Over Claims Typically Work
An employee of a subcontractor is injured on a job site.
The employee collects Workers’ Compensation benefits from their employer.
The employee sues the property owner and/or general contractor.
The owner or GC files a third-party lawsuit against the subcontractor (the injured worker’s employer).
The subcontractor is now back in the case—this is the “Action Over.”
Three Real-World Examples
Example 1: The Falling Worker
A roofing subcontractor’s employee falls from a ladder while working on a commercial building in Manhattan. The worker suffers serious injuries and collects Workers’ Compensation.
The worker then sues the building owner and general contractor under Labor Law 240(1). Because of the Scaffold Law, the owner and GC are held strictly liable—even if they weren’t negligent.
The GC then files an Action Over claim against the roofing subcontractor, alleging:
Failure to provide proper safety equipment
Breach of contract (indemnification clause)
Result: The subcontractor is pulled into the lawsuit and their General Liability and Umbrella policies are triggered, potentially leading to a large payout.
Example 2: The Improper Safety Setup
An electrical subcontractor’s employee is injured when scaffolding collapses. The employee files for Workers’ Compensation and then sues the general contractor and property owner.
The general contractor claims that the subcontractor:
Improperly assembled the scaffold
Failed to follow safety protocols
They initiate an Action Over claim to shift liability.
Result: Even though the employee cannot sue their employer directly, the subcontractor is now defending a third-party claim and may be responsible for damages, legal fees, and indemnification obligations.
Example 3: The Multi-Trade Job Site Injury
On a large construction site in Brooklyn, a laborer working for a masonry subcontractor trips over debris left by another trade and suffers a serious injury.
The worker sues the owner and general contractor. The general contractor then brings Action Over claims against multiple subcontractors, including the injured worker’s employer, arguing:
Poor site safety coordination
Failure to maintain a clean work area
Result: Multiple subcontractors get pulled into litigation, even those indirectly involved. Insurance policies across several trades are triggered, creating a complex and costly legal battle.
How to Protect Your Business
Action Over claims are difficult to eliminate entirely in New York, but there are ways to manage and reduce your exposure:
1. Strong Contracts
Make sure your contracts are carefully reviewed. Pay close attention to:
Indemnification clauses
Additional insured requirements
Scope of work definitions
Poorly written contracts can dramatically increase your liability.
2. Proper Insurance Coverage
Ensure you have:
Adequate General Liability limits
Sufficient Umbrella/Excess coverage
Coverage that does NOT exclude Action Over claims
Some carriers specifically limit or exclude this exposure—this is critical to review.
3. Risk Transfer
Always require your subcontractors to:
Name you as an Additional Insured
Provide proper certificates of insurance
Carry adequate limits
Risk transfer is one of your strongest defenses.
4. Safety Programs
A strong safety culture can reduce the likelihood of accidents and claims:
Regular safety meetings
Proper equipment training
Site inspections and documentation
5. Work with Specialists
New York is a unique and challenging insurance environment. Working with a broker who understands Action Over exposure is essential to structuring proper protection.
Final Thoughts
Action Over claims are one of the most significant liability risks facing New York contractors today. They blur the line between Workers’ Compensation and General Liability, often pulling subcontractors into lawsuits they thought they were protected from.
Understanding how these claims work—and proactively managing your contracts, insurance, and job site practices—can mean the difference between a manageable incident and a major financial setback.
BGES Group is one of New York, New Jersey, and Connecticut’s Construction Insurance Specialists representing 50+ companies, including all the BEST general & umbrella liability programs. We offer all the coverage needed, including property, builders’ risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers’ compensation, N.Y.S. disability, and group health. Our commitment to you goes beyond the policies we provide. We are always just a call, text, or email away, ready to assist you, even on weekends. We understand the importance of your business and are here to help you navigate any insurance challenges.
BGES Group are Workers’ Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being canceled, losses causing difficulty getting coverage, in the middle of an audit dispute, misclassified payrolls, or whatever your issue. We can help! We have special programs for Auto Services, Contractors (especially in New York), Limousine Services, Logistics Companies, Manufacturers, Recyclers, and Truckers; we can help ANY tri-state business owner. We are considered “Preferred Agents” for this one program that, if we can get you into, their pricing is excellent, offers long-term coverage stability, and can cover multi-state operations. The program takes the hassle out of doing annual audits, too.
If a natural disaster struck tomorrow, would your business survive—or would it scramble to recover? It’s a tough question, but one every business owner and executive needs to answer honestly. With natural catastrophes increasing in both frequency and severity, companies can no longer afford to rely on luck or last-minute planning.
Disaster preparedness is not just about reacting—it’s about building resilience into the core of your business. Whether you’re running a construction firm, logistics company, or professional service operation, having a clear and actionable recovery plan can mean the difference between temporary disruption and permanent closure.
Here’s a comprehensive disaster recovery checklist designed to help you safeguard your business, your people, and your future.
Start with a Written Plan
Every business should have a formal disaster preparation and recovery plan. This document should clearly outline procedures, responsibilities, and contingencies. It’s critical that this plan exists in both digital and physical formats.
Keep hard copies in your office and distribute electronic versions to employees. If your building becomes inaccessible due to fire, flood, or structural damage, your team must still be able to access the plan remotely.
Prepare Emergency Supplies
In the immediate aftermath of a disaster, access to basic supplies can make a significant difference. Ensure your workplace is equipped with first aid kits, flashlights, batteries, bottled water, and other essential emergency items.
Regularly inventory and replenish these supplies so they are always ready when needed.
Back Up Your Data—Offsite
Your data is one of your most valuable assets. If your servers are destroyed in a fire or flood, could your business continue operating?
Daily backups to a secure offsite location or cloud-based system are essential. This ensures that even if your physical infrastructure is compromised, your operational data remains intact and accessible.
Establish an Alternate Work Location
If your office becomes unusable, your employees need to know exactly where to go. Designate an alternate meeting or work site in advance. This could be a secondary office, shared workspace, or temporary leased facility.
Managers should maintain updated employee contact lists and be ready to coordinate operations quickly. Planning ahead can significantly reduce downtime and confusion.
Invest in a Generator
Power outages are common during disasters, and waiting until one occurs to purchase a generator is a mistake. Demand spikes immediately after major events, making it difficult to secure equipment.
Ensure your generator has sufficient capacity to power your critical systems—whether that includes computers, servers, refrigeration, or machinery.
Assign Clear Responsibilities
A disaster plan is only effective if people know their roles. Assign specific responsibilities to team members in advance:
Who will secure the premises before a storm?
Who will deploy protective measures like shutters or sandbags?
Who will handle cleanup and recovery efforts?
Keep in mind that some employees may be unavailable due to personal responsibilities or emergency service commitments, such as National Guard deployment. Build flexibility into your plan.
Review Your Insurance Coverage
Insurance is a cornerstone of disaster recovery. Carefully review all policies to ensure they cover relevant risks and provide adequate limits.
Pay particular attention to flood coverage—most standard policies exclude it. If your business operates in a flood-prone area, separate coverage is essential.
Protect Key People
Your business relies on more than just physical assets—it depends on people. A disaster could incapacitate or even result in the loss of key personnel.
Review your key-person life and disability insurance policies to ensure they provide sufficient protection. This coverage can help stabilize your business during an already challenging time.
Consider Business Interruption Insurance
Even if your property damage is covered, what about lost income?
Business interruption insurance provides financial support during temporary closures. It can help you continue paying employees, covering expenses, and maintaining operations while you recover.
This type of coverage can be the difference between surviving a disruption and shutting down permanently.
Develop a Public Relations Strategy
Communication is critical during a disaster. Without clear messaging, customers and partners may assume your business has closed for good.
Designate a company spokesperson and prepare a communication plan. Share updates with clients, vendors, and the media. If you relocate temporarily, make sure your audience knows where to find you.
Diversify Communication Systems
Disasters often disrupt communication networks. One provider may go down while another remains operational.
Encourage employees to use different mobile carriers to reduce the risk of total communication failure. This redundancy can keep your team connected when it matters most.
Secure Emergency Funding
Cash flow can become a major issue if your business is forced to shut down temporarily. Having access to emergency funds is crucial.
The Small Business Administration offers low-interest disaster loans to qualifying businesses. These funds can help cover operating expenses and keep your business afloat during recovery.
Protect Critical Documents
Your tax returns, contracts, and financial records are essential for recovery and insurance claims.
Store digital copies securely online and keep physical copies in a fireproof safe or offsite deposit box. If you’re in a flood-prone area, store documents at a higher elevation or inland location.
Avoid keeping all copies in areas exposed to the same risk.
Identify and Mitigate Risks
Every business faces unique risks based on its location, industry, and operations. Coastal businesses may prioritize hurricane preparedness, while others may focus on fire or earthquake risks.
Conduct a thorough risk assessment and tailor your disaster plan accordingly. Avoid a one-size-fits-all approach—what works for one business may not work for another.
The Takeaway
There is no universal formula for disaster preparedness. Each business must evaluate its own vulnerabilities and develop a customized strategy.
What matters most is taking action before disaster strikes. By planning ahead, assigning responsibilities, and securing the right resources, you can protect your business, your employees, and your long-term success.
Why Partnering with the Right Insurance Team Matters
At BGES Group, we understand the complexities of protecting businesses in today’s unpredictable environment. As construction insurance specialists serving New York, New Jersey, and Connecticut, we represent over 50 top-rated carriers and offer comprehensive coverage solutions—including property, builders’ risk, inland marine, general liability, umbrella liability, auto, workers’ compensation, and more.
Our commitment goes beyond policies. We are always available—by phone, text, or email—even on weekends—to help you navigate challenges and ensure your business stays protected.
We are also workers’ compensation specialists for Tri-State business owners. Whether you’re dealing with high rates, cancellations, audit disputes, or classification issues, we have solutions. Our preferred programs offer competitive pricing, long-term stability, and simplified audit processes.
If you want to strengthen your disaster preparedness and insurance strategy, we’re here to help.
If you are a contractor working in New York, chances are you have experienced this frustrating situation.
You finish negotiating a job. You send in your insurance certificate. Then suddenly the project manager, building manager, or risk manager sends it back with a long list of problems.
Now the clock is ticking. The job cannot start until the certificate is accepted. Your client is getting irritated. And when you call your insurance broker for help… they either don’t answer, don’t understand the requirements, or take two days to issue a corrected certificate.
Meanwhile the contractor down the street already has boots on the ground.
This situation happens every day to contractors across New York. And most of the time, the problem is not the contractor.
The problem is the broker.
Insurance certificates are not just administrative paperwork. In New York’s highly litigious construction environment, certificates must match the contract language and the insurance policy endorsements precisely. Building managers and risk managers review them carefully because their liability exposure is enormous.
When your broker does not understand construction risk transfer requirements, your certificate becomes a liability instead of a solution.
Unfortunately, many contractors discover too late that their broker is simply not equipped to handle construction accounts.
Let’s look at the common problems contractors run into.
The Real Problem: Brokers Who Don’t Understand Construction
Construction insurance in New York is complex. Many policies include exclusions that can completely eliminate coverage if not structured properly.
For example:
• Labor Law exclusions • Action Over exclusions • Employee injury exclusions • Improper additional insured endorsements • Incorrect primary and non-contributory wording • Missing waiver of subrogation
If your broker does not understand how these issues affect certificates and contracts, they will struggle every time a building manager asks for revisions.
The result?
Delays, frustration, and sometimes losing the job entirely.
And when you try to get help from your broker, the experience can be even worse.
Phones go unanswered. Emails sit for hours or days. Certificates take forever to issue. Nobody wants to take responsibility.
Contractors do not have time for that.
You need a broker who understands construction risk transfer and moves at the speed of the jobsite.
That is exactly where BGES Group comes in.
10 Ways BGES Group Makes Insurance Easier for Contractors
At BGES Group, we understand that contractors do not want excuses. They want results.
Here are ten ways we make your insurance life dramatically easier.
1. We Actually Answer Our Phones
It sounds simple, but it matters.
When you call BGES Group, you get a real person who answers the phone. Not voicemail. Not a ticket system. Not a call center.
When a job is on the line, waiting hours for a response is unacceptable.
2. Certificates Issued in Five Minutes or Less
Most certificates should not take hours or days.
If we already have the correct certificate holder information and contract requirements, certificates are often issued in five minutes or less.
Contractors move fast. Your broker should too.
3. Account Executives Who Know Construction
Many brokers assign inexperienced staff to handle certificates.
At BGES Group, your account executive understands construction insurance and risk transfer requirements. That means fewer mistakes and faster approvals.
4. Certificates That Actually Match the Contract
Building managers reject certificates because they do not match contract language.
We review the contract requirements and issue certificates that reflect the correct:
• Additional insured endorsements • Primary and non-contributory wording • Waiver of subrogation • Completed operations coverage
This dramatically reduces rejection rates.
5. No Dealing With Anyone Who Has a Mood Disorder
Let’s be honest.
Some insurance offices are miserable places. Staff members sound annoyed when you call and treat you like you are bothering them.
At BGES Group, contractors are treated with respect. You get professionals who are calm, responsive, and solution-oriented.
You have enough stress running a construction business. You do not need attitude from your broker.
6. We Help Solve Risk Manager Problems
When building managers push back on coverage or wording, many brokers simply forward the email to you and say “see attached.”
That is not helpful.
We communicate directly with project managers, risk managers, and property management companies when needed to resolve issues quickly.
7. Real Certificate Expertise
In New York construction, certificates must reflect very specific forms such as:
• CG 20 10 • CG 20 37 • Waiver of Subrogation endorsements • Primary and Non-Contributory wording
If your broker does not understand these forms, certificates will continue getting rejected.
We do this every day.
8. We Remarket Your Account
Too many brokers place your policy once and never revisit it again.
At BGES Group, accounts are actively remarketed when appropriate to ensure contractors have competitive pricing and proper coverage.
Insurance markets change constantly. Your broker should be paying attention.
9. A Broker Who Is a Street Fighter for Your Interests
When claims happen or underwriting becomes difficult, you need a broker who fights for your interests.
We advocate aggressively for our clients with insurance carriers.
Contractors deserve representation, not passive order-takers.
10. No Bullshit Fees
Some brokers load policies with excessive “policy fees,” “service fees,” or “administrative charges.”
At BGES Group, we believe in transparency.
No hidden surprises. No inflated fees.
Just straightforward insurance support.
Why This Matters More in New York
Contractors in New York operate in one of the most challenging insurance environments in the country.
Labor law liability exposure is enormous. Many insurance companies have left the market entirely. Those that remain often impose strict underwriting requirements.
This makes it even more important that your broker knows what they are doing.
If your insurance is structured incorrectly or your certificates are constantly rejected, it can cost you:
• Lost projects • Payment delays • Contract disputes • Major liability exposure
Insurance should support your business, not slow it down.
The last thing you should have to worry about is whether your broker can issue a correct certificate of insurance.
If your certificates keep getting rejected, your broker does not answer the phone, or you feel like nobody is advocating for your business, it may be time to work with a firm that actually understands contractors.
BGES Group was built specifically to help contractors navigate New York’s complicated insurance environment without the headaches.
Because when your broker knows what they are doing, your projects move faster and your clients stay happy.
If your certificates keep getting rejected or your broker is not helping you solve problems, call today. A five-minute conversation could save you days of frustration on your next project.
If you are a contractor working anywhere in New York, you have probably noticed a major change in how insurance companies handle construction risk.
Before a subcontractor can begin work, contractors are now required by their insurance companies to collect several specific documents and insurance protections.
This is not just administrative paperwork.
It is a critical part of how construction liability risk is transferred.
Insurance companies today want to ensure that each subcontractor is financially responsible for their own work. Without these protections in place, a contractor’s insurance policy could end up paying for accidents that were actually caused by subcontractors.
As a result, contractors are now required to obtain several key protections from subcontractors before work begins on a jobsite.
Below are the most common requirements and why insurance companies insist on them.
1. Insurance and Hold Harmless Agreements
The first requirement is a written subcontract agreement that includes a hold harmless or indemnification clause.
A hold harmless agreement requires the subcontractor to defend and indemnify the contractor for claims arising out of the subcontractor’s work.
For example:
If a subcontractor installs framing improperly and an injury occurs, the subcontractor agrees to defend the contractor and pay damages related to that claim.
Construction lawsuits in New York frequently name every party involved in a project. Even if the subcontractor caused the accident, the contractor will almost always be pulled into the lawsuit.
A properly written hold harmless agreement allows the contractor to transfer responsibility back to the subcontractor whose work caused the loss.
Without this provision, the contractor’s insurance company may be forced to defend and pay claims that were actually caused by someone else.
2. Being Listed as an Additional Insured
Another key requirement is that subcontractors must list the contractor as an Additional Insured on the subcontractor’s Commercial General Liability (CGL) policy.
When a contractor is listed as an additional insured, the subcontractor’s insurance policy extends coverage to the contractor for claims arising out of the subcontractor’s work.
This is extremely important in construction accidents.
If a worker or third party is injured and the contractor is sued, being listed as an additional insured allows the contractor to tender the claim to the subcontractor’s insurance company.
That means the subcontractor’s insurer must:
• Provide legal defense • Pay settlements or judgments • Protect the contractor from financial loss
Insurance companies require this because they do not want the contractor’s policy paying claims caused by subcontractors.
Additional insured status ensures the subcontractor’s insurance responds first.
3. Waiver of Subrogation
Another critical requirement is a Waiver of Subrogation.
Subrogation is the legal right of an insurance company to recover money from another party after paying a claim.
A waiver of subrogation changes that.
When a subcontractor provides a waiver of subrogation in favor of the contractor, it means that if the subcontractor’s insurance company pays a claim, it cannot later pursue the contractor or the contractor’s insurance company to recover those payments.
In simple terms:
If a subcontractor’s insurer pays for a loss, they waive the right to sue the contractor afterward.
Insurance companies require this provision because construction projects involve multiple insurers. Without waivers of subrogation, insurers could spend years suing each other after a claim.
The waiver helps ensure that once a claim is paid, the matter is resolved without further litigation between insurance companies.
4. Primary and Non-Contributory Coverage
Another phrase frequently seen in subcontract agreements is Primary and Non-Contributory coverage.
This language determines which insurance policy must respond first when a claim occurs.
When a subcontractor’s policy is written on a primary and non-contributory basis, it means:
• The subcontractor’s insurance policy pays first • The contractor’s insurance policy does not contribute unless the subcontractor’s limits are exhausted
Insurance companies insist on this because they want the subcontractor’s policy to handle claims arising out of the subcontractor’s work.
Without primary coverage, both policies may have to contribute to a loss.
By requiring primary coverage, insurers ensure the contractor’s insurance policy is protected and used only as a last resort.
5. Minimum Insurance Limits Required From Subcontractors
In addition to contractual protections, insurance companies typically require subcontractors to carry minimum liability limits.
Most contractor insurance policies require subcontractors to carry:
Commercial General Liability (CGL) Minimum limits of $1,000,000 per occurrence
Excess or Umbrella Liability Minimum limits of $1,000,000 or higher
For larger projects, contractors may require $2M, $5M, or even $10M umbrella limits.
Insurance companies require these limits because construction accidents can produce extremely large claims.
Injury lawsuits in New York can easily exceed one million dollars once legal costs, medical expenses, and settlements are involved.
If subcontractors carry insufficient limits, the contractor’s policy may be forced to cover the remaining damages.
Strong subcontractor insurance limits create a layered protection structure that protects everyone involved in the project.
What Happens If Contractors Don’t Collect These Documents?
Many contractor insurance policies now contain Subcontractor Warranty Clauses.
These provisions require contractors to collect the documents discussed above before subcontractors begin work.
If contractors fail to do this, the consequences depend on whether the policy contains a Hard Hammer or Soft Hammer provision.
Hard Hammer Subcontractor Requirement
A Hard Hammer Clause is the strictest policy condition.
If the contractor fails to obtain required subcontractor documentation and that subcontractor causes a loss, the insurance company may deny coverage entirely.
This means:
• No legal defense • No claim payment • The contractor becomes personally responsible for damages
Considering that serious injury lawsuits in New York can reach millions of dollars, a hard hammer clause can be financially devastating.
Soft Hammer Subcontractor Requirement
Some policies instead contain a Soft Hammer Clause.
With a soft hammer provision, coverage is not completely denied, but the contractor is penalized financially.
Typical penalties include:
• Higher deductibles • Reduced policy limits • Shared responsibility for the loss
For example, a contractor who fails to collect subcontractor documentation may suddenly face a $50,000 or $100,000 deductible when a claim occurs.
While coverage still exists, the financial impact can still be severe.
Why Insurance Companies Are Enforcing This More Than Ever
Construction liability losses in New York have been rising dramatically.
Several factors are driving this trend:
• High-cost construction injury lawsuits • Strict labor laws favoring injured workers • Multiple parties being sued on every project • Extremely high legal defense costs
Because of these risks, many major insurance companies have stopped writing contractor insurance altogether.
Those that remain in the market require strict risk transfer procedures involving subcontractors.
Collecting subcontractor insurance documents is now one of the most important ways contractors protect themselves.
How BGES Group Helps Contractors Protect Their Business
Understanding subcontractor insurance requirements can be confusing and complicated.
That’s where BGES Group can help.
BGES Group specializes in insuring contractors operating in New York and understands the unique challenges contractors face in this difficult insurance market.
If you’re a contractor operating in New York today, you’ve probably noticed something unsettling happening in the insurance market.
When your general liability policy comes up for renewal, the conversation with your broker is no longer as simple as it used to be.
Rates are rising. Underwriting is tightening. And perhaps most concerning of all—there are fewer insurance companies willing to write New York contractors.
Over the past year, several well-known “Main Street” insurance companies have quietly stepped away from the New York contractor liability market. Carriers that once insured small and mid-size construction firms are now declining accounts or dramatically restricting the types of work they will cover.
Why?
Because New York remains one of the most difficult liability environments in the country. Between strict labor laws, rising claim costs, and complex construction risks, many insurance companies have decided the exposure simply isn’t worth it.
For contractors, the result is simple: less competition means higher premiums and fewer options.
That’s why every contractor should be asking themselves an important question:
“What’s my Plan B when my liability policy comes up for renewal?”
Why Waiting Until Renewal Is Risky
Too many contractors wait until 30 days before renewal to think about their insurance.
By that time, if your current insurance company decides not to renew your policy—or comes back with a major price increase—you may have very limited options.
In today’s insurance environment, underwriters often need 60–120 days to properly review contractor accounts. If there’s a gap in coverage, past claims, or certain types of work involved, the underwriting process can become even more complicated.
That’s why having a backup strategy is critical.
That’s Where BGES Group Comes In
At BGES Group, we specialize in helping New York, New Jersey, and Connecticut contractors navigate one of the most challenging insurance markets in the country.
We understand the construction industry because contractors are a core part of our business.
But just as important, we offer something many larger agencies have lost:
Old-fashioned “Mom and Pop” boutique service.
When you call BGES Group, you’re not being routed through a call center or waiting days for a response. You’re dealing with professionals who understand your business and treat your company like it matters—because it does.
Here are 10 ways BGES Group makes contractors’ lives easier.
1. Access to 50+ Insurance Companies
The contractor insurance market is shrinking. Having access to multiple carriers is more important than ever.
BGES Group represents over 30 insurance companies, including many of the best general liability and umbrella liability programs available for contractors.
2. A True Backup Plan for Your Liability Renewal
If your current carrier increases rates dramatically or decides not to renew your policy, we already have alternative markets ready to review your account.
That’s what a real Plan B looks like.
3. Specialists in New York Contractor Risks
New York construction is unique. Labor Law exposure, high claim severity, and strict insurance requirements mean you need a broker who understands these risks.
We specialize in New York contractor insurance placements.
4. Help Navigating Complex Insurance Requirements
General contractors, property managers, and developers often require complex insurance wording.
Additional insured endorsements. Primary and non-contributory wording. Waivers of subrogation.
We help make sure your policies meet contractual requirements.
5. Faster Responses When You Need Certificates
In construction, work often stops until a certificate of insurance is issued.
We understand that speed matters, and we work quickly to provide the certificates you need so projects keep moving.
6. Assistance with Claims
When a claim occurs, contractors often feel like they’re left on their own to deal with the insurance company.
We help guide you through the process and advocate on your behalf when needed.
7. Workers’ Compensation Expertise
Workers’ compensation is one of the most complicated insurance policies contractors deal with.
Misclassified payroll, incorrect job classifications, and audit disputes can lead to unexpected costs.
We help review policies and identify potential issues before they become expensive problems.
8. Help with Audit Disputes
Many contractors are surprised when their workers’ compensation audit results in a large additional premium.
If you’re in the middle of an audit dispute, we may be able to help review classifications, subcontractor documentation, and other factors affecting the audit.
9. Guidance on Coverage Contractors Often Overlook
Many contractors carry only basic liability insurance when they actually need additional coverage such as:
Builders risk Inland marine Commercial auto Umbrella liability
We help identify potential gaps that could create serious financial exposure.
10. Real People Who Are Available When You Need Them
Construction doesn’t stop at 5 PM—and neither do insurance issues.
At BGES Group, we pride ourselves on being available when our clients need us, even outside normal business hours.
A Construction Insurance Specialist You Can Count On
BGES Group is one of New York, New Jersey, and Connecticut’s Construction Insurance Specialists representing 30+ companies, including all the BEST general & umbrella liability programs. We offer all the coverage needed, including property, builders’ risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers’ compensation, N.Y.S. disability, and group health.
Our commitment to you goes beyond the policies we provide. We are always just a call, text, or email away, ready to assist you, even on weekends. We understand the importance of your business and are here to help you navigate any insurance challenges.
Workers’ Compensation Insurance Specialists for Tri-State Business Owners
BGES Group are Workers’ Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being canceled, losses causing difficulty getting coverage, in the middle of an audit dispute, misclassified payrolls, or whatever your issue. We can help!
We have special programs for Auto Services, Contractors (especially in New York), Limousine Services, Logistics Companies, Manufacturers, Recyclers, and Truckers; we can help ANY tri-state business owner.
We are considered “Preferred Agents” for this one program that, if we can get you into, their pricing is excellent, offers long-term coverage stability, and can cover multi-state operations. The program takes the hassle out of doing annual audits, too.
Don’t Wait Until Your Renewal Is in Trouble
The New York contractor insurance market is changing quickly.
If your liability policy is coming up for renewal, now is the time to start exploring your options—not after the renewal quote arrives.
Having a Plan B could make the difference between securing the coverage your business needs or scrambling at the last minute.
Contact BGES Group
If you want to speak with us:
Gary Wallach BGES Group 216A Larchmont Acres West Larchmont, NY 10538
If you spend any time talking with construction contractors across the Tri-State area — New York, New Jersey, and Connecticut — you’ll hear the same complaint again and again.
It’s not the work. It’s not the employees. And it’s not even the premiums.
It’s the workers’ compensation audit.
For many contractors, the annual workers’ comp audit has become what they jokingly call:
“The insurance proctologist visit.”
Auditors comb through:
Payroll records
1099s
Subcontractor agreements
Bank statements
Tax documents
And the result is often the same:
A surprise bill months after the policy year ends.
Sometimes that bill is enormous.
The Problem With Traditional Workers’ Comp Policies
Traditional workers’ compensation policies are typically written using estimated payroll.
That means the premium you pay during the policy term is based on projections.
After the policy expires, the insurance carrier performs an audit to determine what the payroll actually was.
If payroll turns out to be higher than estimated, the contractor receives a large additional premium bill.
For construction companies — where payroll fluctuates with projects, seasonal work, and job schedules — these audits can become a constant headache.
Why Contractors Are Losing Patience
Construction is already one of the most regulated industries in America.
Contractors deal with:
OSHA
Building inspectors
Union rules
Strict labor laws
Jobsite safety compliance
This is especially true in states like New York.
When unpredictable insurance audits are added on top of that, many contractors say it pushes them to the breaking point.
Here are the frustrations contractors mention most often:
• Surprise premium bills months after the policy ends • Auditors questioning subcontractors and 1099 labor • Disputes over employee classifications • Endless requests for payroll documentation • Cash flow disruptions from unexpected charges
Many contractors say the process feels less like an audit and more like a financial interrogation.
A Growing Search for Alternatives
Because of these frustrations, more contractors are exploring alternative workers’ compensation structures.
One option that has gained traction over the past 25+ years is a payroll-based workers’ compensation program.
These programs move away from the traditional audit model and toward a pay-as-you-go payroll system.
A Different Way to Handle Workers’ Compensation
Instead of estimating payroll for the entire year and adjusting later, payroll-based workers’ comp programs calculate premiums using actual payroll each pay period.
This model changes everything.
Premiums adjust automatically as payroll changes, eliminating many of the traditional audit surprises.
Employers pay for coverage as payroll occurs, aligning insurance cost with real business activity.
In simple terms:
No projections. No guessing. No painful year-end audit surprises.
For contractors whose payroll fluctuates with projects and seasonal work, this structure can provide much greater financial stability.
10 Ways Payroll-Based Workers’ Comp Programs Help Contractors
Without referencing any specific provider, here are ten reasons many contractors are moving toward payroll-driven workers’ compensation systems.
1. No Traditional Annual Audits
Because premiums are calculated from real payroll each pay cycle, the dreaded year-end audit often disappears entirely.
2. Premiums Based on Actual Payroll
Contractors only pay for payroll that actually occurred — not estimates made twelve months earlier.
3. Improved Cash Flow
Instead of large deposits or surprise bills, premiums are spread throughout the year as payroll is processed.
4. Reduced Risk of Surprise Bills
Payroll-based systems dramatically reduce the risk of massive audit adjustments.
5. Automatic Premium Adjustments
When payroll increases or decreases, premiums adjust automatically.
6. Easier Budgeting
Contractors know their insurance cost at the same time payroll is processed.
7. Integrated Payroll Reporting
Many programs integrate directly with payroll systems, reducing paperwork and administrative time.
8. Enhanced Claims Management
Some programs include modern claims handling and safety resources that help reduce claim frequency.
9. Scalable for Growing Contractors
As companies grow or expand into new states, coverage can often adjust quickly without rewriting an entire policy.
10. Long-Term Market Stability
Some payroll-based workers’ comp programs have operated successfully for more than 25 years, providing an alternative to constantly shifting insurance markets.
Why This Matters in the Tri-State Construction Market
Contractors in the New York metropolitan region face unique challenges.
New York’s construction labor laws, liability exposure, and insurance costs are among the highest in the country.
Workers’ compensation costs can be especially high for trades such as:
Roofing
Masonry
Interior demolition
Concrete work
Exterior façade work
Structural steel
When unpredictable audits are added on top of those already high costs, it creates serious financial pressure for small and mid-size contractors.
That’s why many contractors are now asking a simple question:
“Is there a better way to handle workers’ comp?”
For many businesses, the answer may be yes.
The Bottom Line
Workers’ compensation is essential protection for both employers and employees.
It covers:
Medical expenses
Lost wages
Workplace injury protection
But how the coverage is structured can make a huge difference.
For contractors tired of audit surprises, payroll-based workers’ compensation programs can offer a more predictable and contractor-friendly approach.
Instead of worrying about what an auditor might find a year later, contractors can focus on what they do best:
Building projects. Running crews. Growing their businesses.
About BGES Group
BGES Group specializes in helping contractors and businesses secure the right insurance programs, including workers’ compensation solutions designed for stability and long-term success.
With extensive experience in construction insurance throughout New York, New Jersey, and Connecticut, BGES Group helps contractors navigate complex insurance markets and identify solutions that align with their business model.
If you are tired of workers’ compensation audit surprises and want to explore payroll-based programs that may simplify your insurance structure, we’re happy to have a conversation.
Many New York contractors believe that once they purchase a Commercial General Liability (CGL) policy, they are fully protected. Unfortunately, that is often not the case. Over the past several years, insurance carriers have added numerous exclusions to contractor policies that significantly limit coverage.
Some of these exclusions are buried deep in the policy endorsements and may not be obvious when a contractor first reviews the documents. Yet when a claim occurs, these exclusions can be the difference between the insurance company paying the claim or leaving the contractor responsible for hundreds of thousands—or even millions—of dollars in damages.
Below are 10 of the most dangerous exclusions commonly found in New York contractor liability policies that every contractor should understand before a claim happens.
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1. Labor Law Exclusions
New York has some of the most contractor-unfriendly laws in the country, specifically New York Labor Law Sections 240 and 241, often called the Scaffold Law.
These laws make property owners and general contractors automatically liable for gravity-related injuries such as falls from ladders or scaffolding. When these claims occur, the liability is typically pushed back onto subcontractors through indemnification agreements.
Some insurance carriers attempt to eliminate this exposure by adding Labor Law exclusions to the policy. If such an exclusion exists, the policy may not cover claims involving these laws—even though they represent some of the largest claims in the construction industry.
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2. Action Over Exclusions
Closely related to labor law claims are Action Over exclusions.
Normally, when an employee is injured on the job, workers’ compensation insurance pays the claim. However, under New York law, injured workers can still sue third parties such as the building owner or general contractor. Those parties then file a lawsuit back against the subcontractor that employed the worker.
This process is called an “action over.”
If a contractor’s liability policy contains an Action Over exclusion, the insurance company may refuse to defend or indemnify the contractor in these situations.
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3. Employee Injury Exclusions
Another dangerous exclusion limits coverage for injuries involving employees, leased workers, temporary workers, volunteer workers, or casual laborers.
Some policies contain very broad wording that excludes coverage for injuries to anyone performing work on behalf of the contractor, regardless of employment status.
This can create serious coverage gaps, especially for contractors who occasionally use day laborers or temporary workers.
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4. Residential Construction Exclusions
Many insurance carriers today have strict restrictions on residential construction.
Policies may exclude coverage for:
• Work on one- or two-family dwellings
• Work on condominiums or cooperatives
• Work on multi-family buildings
• Exterior residential construction
Contractors often assume their policy covers all their work, only to discover that residential jobs—some of their most common projects—are excluded.
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5. Height Limitations
Some policies limit coverage based on the height of the building being worked on.
Common limitations include:
• No work above 3 stories
• No work above 40 feet
• No work on buildings above a certain number of floors
If a contractor performs work above the stated limit, the insurance carrier may deny the claim entirely.
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6. EIFS and Exterior Stucco Exclusions
EIFS (Exterior Insulation and Finish Systems) and certain types of stucco or exterior cladding systems have been associated with major water intrusion claims.
As a result, many carriers add exclusions for:
• EIFS installation
• Exterior stucco systems
• Exterior finishing systems
Contractors who perform stucco work, exterior plastering, or façade finishing must carefully review their policies to ensure their work is not excluded.
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7. Subsidence and Earth Movement Exclusions
Contractors performing excavation, site work, or foundation work often face another serious limitation: subsidence exclusions.
These exclusions remove coverage for claims involving:
• Soil movement
• Settlement
• Earth shifting
• Structural movement caused by excavation
Even small excavation jobs can potentially trigger these exclusions.
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8. Roofing Exclusions
Roofing work is considered high risk due to both fall hazards and water intrusion claims.
Some contractor policies completely exclude:
• Roofing installation
• Roof repairs
• Torch-down roofing
• Flat roof systems
If a contractor performs even occasional roofing work, this exclusion can become a serious problem.
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9. Subcontractor Warranty Endorsements
Many policies now contain Subcontractor Warranty endorsements, which require contractors to verify that all subcontractors:
• Carry their own liability insurance
• Provide certificates of insurance
• Name the contractor as an additional insured
• Maintain specific coverage limits
If the contractor fails to meet these requirements, the insurance company may deny coverage for claims involving the subcontractor’s work.
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10. Completed Operations Exclusions
One of the most overlooked limitations involves Completed Operations coverage.
Many construction defect claims arise years after a project is completed, often involving issues such as:
• Water intrusion
• Structural defects
• Improper installation
Some policies either exclude completed operations entirely or restrict coverage for certain types of work, such as residential construction or exterior cladding systems.
Without proper completed operations coverage, contractors may face lawsuits long after the job is finished with little or no insurance protection.
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The Bottom Line
Contractors in New York face significant liability exposures due to strict labor laws, complex construction projects, and aggressive litigation. Unfortunately, many insurance policies contain exclusions that eliminate coverage for the very risks contractors face every day.
A policy that appears affordable may contain endorsements that severely limit protection. That is why it is critical for contractors to work with an insurance professional who understands the unique risks involved in construction.
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About BGES Group
BGES Group (chatgpt://generic-entity?number=0) specializes in construction insurance and workers’ compensation solutions for contractors in New York and across the United States.
We help contractors identify dangerous exclusions in their policies and structure coverage designed to protect them from the complex liability risks that exist in today’s construction environment.
Our firm works with contractors of all sizes, including:
• General contractors
• Subcontractors
• Interior trades
• Excavation contractors
• Demolition contractors
• Specialty construction trades
Our goal is simple: make sure contractors truly understand what their insurance policies cover before a claim happens.
If you are a contractor and are unsure whether your liability policy contains dangerous exclusions, contact us for a review of your coverage. A simple policy review today could prevent a devastating financial surprise tomorrow.
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This article is for informational purposes only and does not constitute legal or insurance advice. Coverage depends on the specific terms, conditions, and exclusions of each insurance policy.
