Construction opportunities in New York are abundant, but before you sign your next contract in the Empire State, you may want to consider New York Labor Law (NYLL). NYLL poses legal and financial liability exposures for your business, specifically through Labor Laws 240 & 241.
NYLL allows injured workers to collect workers’ compensation benefits from their employer as well as litigate against other “responsible parties”. This is known as third-party-over action liability. When you enter New York, the protections provided to you (the employer) under workers’ compensation laws in other states may not apply in the same way you’re accustomed to. Though injury damages are usually limited by the state’s workers’ compensation law, an incident that involves a NYLL violation allows injured workers to seek funds beyond the norm through a personal injury lawsuit.
New York Labor Laws 240 & 241(a), the “Scaffold Law” and “Safe Place to work Law”, places non-delegable duties – and even absolute liability – on property owners and managers for worker injuries, including injuries to subcontractors, building service providers, and vendors. NYLL covers work activities ranging from large-scale construction services to less obvious tasks like receiving delivery of materials and minor building repairs, even actions as simple as changing a light bulb.
Simply put, New York Labor Law makes it more difficult to find a carrier willing to insure your project. Your insurance company may not write insurance in New York, as they understand that doing so poses a higher financial risk due to the increased liability. Options do exist for through-project specific policies as well as companies that offer excess and surplus lines, but these options often carry higher premiums and deductibles.
Though it’s tempting to take on a new project in New York, you may find that your insurance costs far outweigh the benefit of that opportunity.
Reach out to your M3 Account Executive to learn more about local laws that affect your coverage and liability, as well as the risk management strategies you should put in place to prevent worker injury and subsequent NYLL-related lawsuits should you take on a project in New York.