New York contractors operate in one of the most challenging insurance environments in the country. One critical and often misunderstood aspect of construction insurance is labor law coverage under general and umbrella liability policies. Labor Laws 240 and 241, also known as the “Scaffold Law,” place absolute liability on contractors and property owners for worker injuries related to falls or falling objects, regardless of fault. This unique legal framework drives up the cost of liability insurance in New York, creating significant challenges for contractors.
The Cost Impact of Labor Law Coverage
Including labor law coverage under general and umbrella liability policies can substantially increase a contractor’s insurance premium. Insurers view the absolute liability imposed by Labor Laws 240 and 241 as a significant risk. Consequently, policies that include labor law coverage often come with higher rates, stricter underwriting, and limited options.
For many contractors, securing labor law coverage isn’t just a recommendation—it’s a requirement. Most general contractors and project owners mandate that their subcontractors carry labor law coverage as part of their general and umbrella liability insurance. Failing to comply with these requirements can result in losing lucrative contracts or being disqualified from bidding on projects.
Examples of Claims Covered by Labor Law Coverage
1. Fall from a Ladder
A subcontractor’s employee falls from a ladder while working on a project site. Even if the fall was due to the worker’s negligence, the general contractor and project owner could still be held liable under Labor Law 240. Labor law coverage would step in to cover the damages and legal costs.
2. Injury from a Falling Object
A construction worker is struck by a falling tool while working on scaffolding. Despite safety protocols being followed, the general contractor and property owner could face liability under Labor Law 241. Labor law coverage would provide protection in this scenario.
3. Scaffolding Collapse
A scaffolding collapse causes injuries to several workers on-site. Labor Law 240 makes the general contractor and project owner strictly liable for the injuries, even if the subcontractor was responsible for setting up the scaffolding. Labor law coverage would handle the claims and associated legal costs.
Why General Contractors and Owners Require Labor Law Coverage
Most general contractors and property owners include strict insurance requirements in their contracts to protect themselves from labor law claims. These requirements typically mandate that subcontractors:
• Include labor law coverage in their liability policies.
• List the general contractor and property owner as additional insureds.
• Provide primary and non-contributory coverage to the general contractor and owner.
Without meeting these requirements, subcontractors risk losing contracts and tarnishing their reputation in the industry.
How BGES Group Can Help
Navigating New York’s complex insurance landscape is no easy task, but BGES Group specializes in providing tailored solutions for contractors. As construction insurance experts, BGES Group understands the unique challenges posed by labor law coverage and works to help contractors secure policies that offer comprehensive protection at competitive pricing.
BGES Group’s boutique approach ensures personalized service. Whether you’re a general contractor or a subcontractor, BGES Group can guide you through the process of obtaining the right coverage to meet your contractual obligations and protect your business.
Contact BGES Group Today
Don’t let the complexities of labor law coverage jeopardize your projects or your bottom line. Contact Gary Wallach at BGES Group to discuss your insurance needs:
Phone: 914-806-5853
Email: bgesgroup@gmail.com
Let BGES Group help you secure the coverage you need to succeed in New York’s competitive construction industry.