Action Over Exclusion – 3 words that can ruin any general contractors business.
Action-Over coverage, Labor Law, Scaffold law, Contractual Liability, and Third-Party Action Over are all used interchangeably when talking about New York Contractors General Liability Insurance.
One thing is for certain, it’s no party if you are caught without action over coverage.
New York is home to a very unique and antiquated law called Labor Law 240 and 241 known as the Scaffold Law. This law creates havoc in both the courts and the insurance market place.
It is also the single reason New York contractors pay 10X what contractors in other states pay.
Enough backstory, Action-Over coverage involves the exclusion or inclusion of coverage on your general liability policy related to Third Party Action over suits, also typically injury to employees or sub-contractors.
Most of the time a policy will have an exclusion for both action over and injury to employees and independent contractors.
The reason being is employees can’t directly sue their employers but they can sue the property owners and general contractors which then tender the claims to your general liability. Hence the third party, the action over refers to collecting above and beyond worker’s compensation.
If you are working on a job or are hired as a general contractor in New York because of third party action over law suits you can be forced to defend and possibly settle claims made by your employees or other trades injured employees.
Sound unfair right? Since those employees aren’t your responsibility but in New York they are.
The worst part is when it related to “gravity-related” injuries it doesn’t even matter who is at fault, the contractors are held responsible.
Their are limited exemptions to this law that may have some of you second guessing the need for action over coverage. Having a huge gap in coverage is not smart business.
As even one claim could result in a very large financial loss. It will also restrict your ability to work as many contractors and project owners have become insurance smart.
They know to look for certain insurance companies or exclusions.
Having an exclusion on your policy that removes coverage for some of the largest law suit payouts in New York is risky business to say the least.
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