Homeowner construction insurance & NYS labor laws, anyone familiar?!
Hi. We’re about to start a significant renovation in Clinton Hill and are close to signing a contract with a GC. We’ve run into the infamous New York State Labor Law Sections 240, 241 and 241A which “impose liability on property owners and their contractors for injuries to contractor employees…” beyond workers comp and the regular construction coverage our homeowner’s carrier requires during the duration. This is an exception that is not in our GC’s regular coverage that would be up to us to add to our coverage. It is a significant amount above and beyond the construction coverage, like over $5K worth. We’ve read that sometimes the GCs have taken care of this exception, though that may raise the costs they pass on to the homeowner, and I guess sometimes the homeowner just pays it. Neither the GC nor our architect seem have come across this issue before. Has anyone dealt with this? Have you as the homeowner just paid up for this “exception” Has your GC just had it as a general rule with his/her coverage. Has your homeowner insurance provider not required it (apparentl y some do and some don’t, the current one we have does). Any insight would be most appreciated, or suggestion of a good insurance provider that might not require it (unless that’s unwise).
cityrat
in Renovation 8 years and 3 months ago
5
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5 replies
espeon | 8 years and 3 months ago
Sounds like the GC doesn’t have general liability or is not licensed in NYS because Labor Law coverage is a requirement. If they have never come across this issue it’s probably because they’ve never done a job in NYC.
What Resident2 says about rates is correct.
slopefarm | 8 years and 3 months ago
Not sure why a GC would want a policy that excludes labor law 240 liability from coverage. As i understand it — and this is not legal advice– GCs as well as property owners are strictly liable. Also, even if homeowner is liable under 240 for a worker’s injury on the property, owner can seek indemnification or contribution from whoever was really at fault, gc, sub etc. Get legal advice on this if you need, but this seems like an unsettling gap in coverage to me.
resident2 | 8 years and 3 months ago
This is to cover the GC’s liability for their own employees. I would be very suspicious of any contractor (or Architect) that has not “come across this before.”
This is one of those line items that when you are comparing apples to apples in bids for a contract; one will seem cheaper than another, one is included, or another may have a higher risk history. But contractors should include this as their cost.
It is your contractor that hires the workers, it is your contractor that controls safety conditions on the site for those employees, the rate of insurance the contractor pays will be based on the contractors experience etc. A good contractor will always get a better rate of insurance than you as an inexperienced owner for a one off job.
Consult with an independent Insurance Broker that works with construction and Real Estate issues. I would name mine, but he does not want the additional business or calls that come with naming him on sites like this.
Or consult wi th other contractors. It is better to spend time now and hire that right contractor, than sign with the wrong one.
rizwan | 8 years and 3 months ago
My friends, Phil Lavender and Jed Marcus have more experience with these issues than they ever wanted. Contact them offline at [Marcus Attorneys](http://marcusattorneys.com/), 718-643-6555.
CarmenR | 8 years and 3 months ago
Our GC’s insurance covered this.