If you are looking for answers regarding New York contractors insurance you’ve come to the right place.
GRBM Inc. is one of the leading insurance brokers for New York contractors insurance.
Few things you should know right from the start, New York contractors insurance is a mess.
You are going to have to make compromises on either your budget, or coverage.
For reasons why NY contractors insurance is such a mess, check out this article here.
Something else to keep in mind, this article is directed towards contractors working in New York City.
If you don’t happen to work in NYC, you are in luck. General liability policies excluding the 5 boroughs of NYC are much less expensive.
Now before you NYC guys start thinking about opening an office in Albany, keep in mind those policies specifically exclude work in the 5 boroughs. Go ahead and squash that idea right now.
Bottom line: Buying the best contractors insurance in New York is sort of like buying the best hamburger at the Golden Arches.
You can get a dollar menu burger aka the cheapest contractors insurance.
Or you can get the black angus BigMac with extra bacon and extra cheese aka the most comprehensive and expensive insurance available.
But regardless of which you choose, you’ll be left feeling a little uneasy. Sort of like how you’ll feel after that trip to the golden arches.
For most people the solution falls somewhere between that dollar burger and the black angus BigMac.
I only use the food analogy because you could end up feeling sick after hearing the prices for New York contractors insurance. More on that later.
For most contractors in New York that self perform aka have crews on the payroll the best general liability option is with Hudson Excess Insurance Company.
Hudson is not the most comprehensive contractors liability policy, it’s most definitely not the cheapest. But it usually hits squarely in the middle ground of compromise as the best available option.
With broad liability coverage and few class restrictions, they will take most contractors working on residential and commercial jobs as long as you aren’t working at crazy heights.
Hudson also includes all the base requirements for New York contractors, blanket additional insured, primary non-contributory wording, waiver of subrogation. Even that pesky special additional insured endorsement for NYC DOT.
Hudson will even offer an umbrella on top of their general liability, which in case you weren’t aware can also be a real problem to get in New York.
If this is all sounding too good to be true and not a compromise at all, just keep reading.
Here’s where the compromises start to come into play.
Hudson does have a hard hammer clause.
You might not be familiar with what a hammer clause is, but the short answer is if you use subcontractors and they don’t have action over, your policy won’t cover you. The long answer can be found here.
If you’ve been on a trusty Utica First policy for years, the price jump is going to feel like a kick in the gut. Minimum premiums start at $27,000… That’s not a typo, getting the right coverage is extremely expensive in New York.
Hudson will not take roofing contractors.
Hudson policies are rated on gross sales.
Bottom line the more your business does in sales the more you’ll have to pay for insurance.
Hudson is picky, they do not accept everyone.
You’d think for a starting price of $27K they’d be happy to take your money. But NOPE. They can be quite selective on which contractors they want to offer a quote too.
Just another reason things are flat out crazy for contractors insurance here in New York.
If you are a contractor that does not have your own crew, in the insurance world you are considered a general contractor.
For NYC residential general contractors the best general liability option is typically with Southwest Marine.
Southwest offers a reasonable compromise of coverage and price, but they are selective only wanting residential general contractors.
If your work is mainly commercial, Southwest Marine is not a fit for your business.
However, if your work is mostly residential and performed by subcontractors you can’t really beat Southwest Marine.
Unlike Hudson, Southwest Marine has a soft hammer.
What does that mean? If you happen to run into an issue with a subcontractor that doesn’t have action over, rather then excluding coverage entirely Southwest imposes a $25,000 deductible. Yup no typo there either.
While that is far from ideal, it is a lot better than excluding coverage entirely.
This goes back to the start of the article, it’s all about compromise.
If you wanted contractors general liability insurance with no height restrictions and no hammer clause you’d have to shell out north of $250,000 per year, just for a $1M General liability policy.
Don’t forget your $5M umbrella that nearly every building requires, that’s going to be outrageous as well.
The good news for you is Southwest Marine starts at only $25,000 for NYC residential general contractors.
While that might seem like a lot or a little depending on your budget, that does not include the $2,700 you’ll need to fork over for DocuTrax to monitor your subcontractors insurance and collect COI’s.
Did I forget to mention that giant compromise?
While signing up for a certificate management service is ultimately a huge benefit for you, it is yet another cost you have to absorb as you’re trying to make a living.
With the insane starting prices for both Hudson and Southwest how are NYC contractors supposed to get started?
That’s a great question, unfortunately it’s not easy, and leads to yet another compromise.
Many contractors will start out with an extremely limited basic general liability just to get licensed and be able to bid for some jobs. Knowing that once they get a job they will need to upgrade their insurance to something at a much higher price.
For established contractors looking to save money on your insurance, it’s VERY tough.
Being aware of the coverage you have and the coverage you MUST HAVE is critical.
Far to many brokers will sell you something cheap just to win your business.
But in the end, it will cost you much more.
That $12,000 General liability policy that they swear is just as good… isn’t. And when you submit it to the building management company and they reject it… You’ll lose the 25% deposit you paid on that policy and get to start a whole new GL policy.
Not such a great deal is it?
Navigating what can only be described as a disaster takes a careful approach.
The old way of calling three insurance brokers and getting bids, will almost always result in a bunch of chaos that will leave you stuck with whatever insurance company you are currently with.
Why is that?
Because each broker is going to present your business slightly different. And when an insurance company sees XYZ Construction presented 3 ways. The underwriters just do the easiest possible thing. DECLINED.
Because why would they want to figure out the real truth when they easiest option is to just say no. This is the sad reality of NYC construction insurance.
If you are looking for help starting up a construction business, or if you need help with your upcoming renewal click the button below to take the next step.
At GRBM, we take a different approach to things and try to take as much of the pain out of buying insurance as possible.
We understand insurance is a huge cost item on your P&L, but with fast certificates and relationships with the leading construction insurance companies, we are happy to be your best option.