If you’re a New York contractor, understanding the implications of Labor Law 240 and 241 is essential—not just for compliance, but to protect your business from devastating financial losses. Whether you’re a general contractor, subcontractor, or construction business owner, these laws can create major legal liabilities if you’re not properly insured. In this article, we’ll break down what Labor Law 240 and 241 are, how Commercial General Liability insurance policies (CGL) handle these types of claims, the cost implications of having or not having coverage, and real-world examples of covered and uncovered claims. Finally, we’ll introduce you to BGES Group, one of New York’s construction insurance specialists, and how we can help you obtain proper coverage.
What Are New York Labor Law 240 and 241?
New York Labor Law 240, commonly referred to as the “Scaffold Law”, was enacted to protect construction workers from gravity-related injuries—think falls from ladders, scaffolds, or other elevated structures. Under this law, property owners, contractors, and their agents can be held strictly liable for injuries caused by violations of safety standards, regardless of the worker’s own negligence.
Labor Law 241 complements 240 but focuses more on the broader safety regulations for construction, demolition, and excavation work. It includes provisions requiring owners and contractors to provide adequate safety equipment and follow specific procedures outlined by the New York State Industrial Code.
In layman’s terms: if a worker is injured because they weren’t provided proper fall protection, or a site was improperly managed, your construction company could be on the hook—even if you weren’t directly at fault.
General Liability Insurance and Labor Law 240/241 Claims
This is where things get tricky for New York contractors. Not all Commercial General Liability (CGL) policies automatically cover claims related to Labor Law 240 and 241. In fact, many policies contain exclusions—either partial or complete—that deny coverage for these claims.
Common Exclusions in CGL Policies:
- Action Over Exclusion: Bars coverage when an injured worker sues the property owner, who then sues the contractor.
- Labor Law Exclusion: A blanket exclusion of claims under Labor Law 240/241.
- Independent Contractors Exclusion: Denies coverage for injuries to subcontractors or their employees.
- Employee Injury Exclusion: Excludes coverage for injuries to your own employees (usually meant to be covered under Workers’ Comp, but can impact other claims).
These exclusions are a critical insurance gap. If you’re not aware they exist in your policy, you could be left with a multi-million-dollar claim that your insurer refuses to pay.
Premium Differences: Coverage vs. No Coverage
You might be thinking, “Well, I’ll just get the cheaper policy.” But cheaper isn’t always better—especially in construction insurance. A policy with full Labor Law 240/241 coverage will generally have premiums that are 25%–100% higher, depending on the type of work, subcontractor management, and project size. But that extra cost buys you peace of mind and financial protection.
On the other hand, if your policy excludes these claims, you’re gambling your business on the hope that no serious accident happens. And in New York, that’s a risky bet.
Real-Life Examples of Covered Claims
- Roofer Falls From Ladder A roofing subcontractor falls 20 feet due to defective ladder anchoring. The injured worker sues the building owner, who sues the GC. Because the contractor had a CGL policy with no Labor Law exclusions, the insurer covered the legal defense and $2.5 million settlement.
- Scaffold Collapse During Demolition A scaffold collapses during a building tear-down. A worker suffers spinal injuries. The GC’s policy included coverage for Labor Law 240 claims, and the insurance company covered all litigation costs and the $1.8 million judgment.
- Unsecured Materials Strike Worker A worker on a lift is struck by falling materials. The project had full 240/241 coverage and subcontractor agreements were correctly managed. The insurer stepped in to defend and settle the claim.
Real-Life Examples of Uncovered Claims
- Policy With Action Over Exclusion A carpenter falls from a scaffold. He sues the building owner, who sues the contractor. The contractor’s policy had an “Action Over” exclusion, and the insurer denied the claim, leaving the contractor personally responsible for $1.2 million in damages.
- Labor Law Exclusion in Fine Print A masonry worker is injured during excavation. The contractor’s policy contained a blanket Labor Law exclusion buried in the fine print. Claim denied.
- Uninsured Subcontractor A painting subcontractor falls from a lift. The GC didn’t verify the sub’s insurance, and the GC’s policy had an Independent Contractor exclusion. No coverage was provided, resulting in financial ruin for the contractor.
Meet BGES Group – New York’s Construction Insurance Specialist
At BGES Group, we specialize in helping New York contractors obtain the right insurance protection, especially when it comes to tricky areas like Labor Law 240/241. We’ve spent years studying the intricacies of contractor insurance and know exactly what to look for to avoid gaps in coverage.
We’re not a large, impersonal agency or a tech-heavy online operation where you’re just another policy number. We’re a mom-and-pop-style, boutique insurance agency that takes pride in one-on-one service, in-depth consultation, and long-term relationships with our clients.
When you work with us, you’re not shuffled around. You’ll speak to knowledgeable, experienced professionals who understand the New York construction insurance landscape inside and out.
Why BGES Group Is Different
- Personalized Service – We take the time to learn your business inside and out.
- Expertise in NY Labor Law – We know how to spot hidden exclusions and push for policies that truly protect you.
- Access to Top Carriers – We work with insurance companies that are known for covering high-risk construction businesses.
- Boutique-Level Attention – Unlike big-box agencies, we don’t operate on volume—we focus on relationships.
- Quick Turnaround Times – Need a quote fast? We’re built to respond quickly and accurately.
Contact BGES Group Today
Don’t wait until a claim puts your entire business at risk. If you’re a New York general contractor, subcontractor, or developer looking for protection against Labor Law 240/241 claims, get in touch with BGES Group today.
📞 Call Us: Gary Wallach – (914) 806-5853 📧 Email: bgesgroup@gmail.com 🌐 Visit Our Website: www.bgesgroup.com
Let us help you navigate the complexities of New York contractor insurance and ensure your business is truly protected. We’re ready to earn your trust—one policy at a time.