When you’re a general contractor operating in New York, you’re already working in one of the most heavily litigated construction environments in the country. From the moment you break ground to the final walkthrough, your business is exposed to a long list of liabilities. One of the most misunderstood and dangerous missteps general contractors make is purchasing a liability insurance policy that does not include proper Labor Law coverage.
Many contractors, especially those who hire subcontractors, believe they’re covered simply because they have a general liability policy. But if you don’t have the right Labor Law protection—specifically coverage for employee injuries, temporary or leased employees, and so-called “Action Over” claims—you could be putting your company, your assets, and your future on the line.
Let’s dive into why this mistake can be catastrophic—and how BGES Group can help protect you from financial ruin.
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Why Labor Law Coverage in New York Is Critical
New York’s Labor Laws 240, 241, and 200 are some of the most contractor-unfriendly statutes in the country. They impose strict liability on general contractors and property owners when a worker is injured due to falls, falling objects, or other jobsite safety violations—even if the worker is employed by a subcontractor.
If your policy excludes labor law or doesn’t adequately cover “Action Over” claims, you could be held 100% financially responsible for a claim—even when you had no direct role in the injury.
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Top 5 Examples of Claims That Can Destroy a Contractor Without Proper Labor Law Coverage
1. The Roofer’s Fall
You hire a roofing subcontractor to do a simple tear-off and re-shingle job. One of the subcontractor’s employees, not tied off properly, falls and suffers spinal injuries. The worker’s employer has minimal workers’ comp, and now the worker sues you, the general contractor, under Labor Law 240. Your policy excludes labor law. You’re now facing a $2 million lawsuit—personally.
2. The Leased Worker Injury
You use a staffing agency to bring in temporary laborers for site cleanup. One of the temp workers falls off a scaffold. You assume you’re covered under your liability policy. But your policy has an exclusion for leased and temporary employees. Your insurer denies the claim. The lawsuit goes forward. You’re forced to sell assets or declare bankruptcy to settle.
3. The “Action Over” Nightmare
Your subcontractor’s injured employee collects workers’ comp benefits, then sues you under Labor Law 240. You submit the claim to your liability carrier. They deny it due to an Action Over exclusion—a clause that specifically excludes injuries to subcontractor employees who sue you after receiving workers’ comp. You’re now responsible for defending and paying the claim out-of-pocket.
4. Employee vs. Contractor Classification Trap
You bring in a crew you consider independent contractors, but the court reclassifies them as employees during a lawsuit. Your policy has an Employee Injury Exclusion. The injured “contractor” sues under Labor Law. Your insurer walks away. You’re now liable for both the judgment and defense costs.
5. The Site Supervisor Incident
Your site supervisor helps a subcontractor install a window. A gust of wind causes the scaffolding to collapse, injuring the sub’s employee. The worker sues the GC (you). Your policy has no Labor Law coverage and an exclusion for bodily injury to workers on-site. You lose the claim—and your business.
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Key Policy Exclusions to Watch For
Contractors who don’t read the fine print on their liability policies often fall victim to:
• Employee Injury Exclusions
These exclude coverage for injuries to your own employees—often including laborers you may think are subs.
• Temporary or Leased Employee Exclusions
If you use staffing firms or day laborers, you must ensure they are not excluded.
• Action Over Exclusions
These are especially dangerous in New York. They eliminate coverage for lawsuits by injured subcontractor employees who sue the GC after collecting workers’ comp.
• Independent Contractor Endorsements
Some policies exclude coverage for all work done by subs unless they meet very specific and often unrealistic contract, licensing, and insurance requirements.
One overlooked clause can turn a $100,000 policy into a worthless piece of paper when a major claim hits.
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Why BGES Group Should Be Your Insurance Partner
At BGES Group, we specialize in New York construction insurance. We’ve spent years studying the ins and outs of Labor Law exposure and have helped hundreds of contractors avoid disastrous claim denials.
We don’t just sell policies—we help you:
• Review and explain your current policy’s exclusions
• Identify holes in coverage that could cost you your business
• Find you a carrier that includes labor law coverage, even if you’ve been denied or non-renewed elsewhere
• Work with you to properly structure contracts with your subcontractors to reduce exposure
• Secure affordable insurance with the protections you really need
Whether you’re just starting out, struggling to renew, or have been dropped by your carrier, BGES Group is here to help.
We have programs for general contractors and specialty trade contractors, even those who have had claims, are higher risk, or operate in the 5 boroughs.
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Contact BGES Group Today
Don’t wait for a claim to find out your insurance is worthless. Call us today for a free, no-pressure policy review.
BGES Group
Construction Insurance Specialists
Phone: 914-806-5853
Email: bgesgroup@gmail.com
Website: http://www.bgesgroup.com
We work fast, fight for our clients, and most importantly—we know New York construction insurance like no one else.
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Final Word
Insurance is not just a requirement—it’s your lifeline. If you’re a general contractor in New York relying on subcontractors, don’t assume your current coverage is enough. Labor Law claims can happen without warning, and the wrong insurance can leave you defenseless.
Let BGES Group give you the peace of mind that comes from being truly protected. We’re here to make sure that one claim doesn’t cost you everything.