Labor Law 240 and your GL policy.

What Labor Law 240 and 241 actually say

Section 240(1), the Scaffold Law, requires owners and contractors to furnish scaffolds, ladders, hoists and other devices that give proper protection to workers. Courts read it as imposing absolute liability: if a worker is injured by a gravity-related hazard (a fall from height, or a falling object) and the required protection was absent or inadequate, the owner and general contractor are liable regardless of their own fault. The worker's comparative negligence is generally not a defense unless the worker was the sole proximate cause, which is a narrow exception.

Section 241(6) covers construction, excavation and demolition work more broadly. It makes owners and contractors liable for injuries caused by violations of specific Industrial Code safety rules, with comparative negligence available as a partial defense.

Section 200 codifies the general duty to provide a safe workplace and requires some supervision or control over the work.

The practical effect: in New York, the owner and the GC are defendants in nearly every serious job-site injury, whether or not their own people did anything wrong. Verdicts and settlements under 240 frequently reach seven figures.

The action-over: how a sub's injury becomes everyone's claim

Follow the money on a typical claim.

1. A roofer employed by a subcontractor falls from a ladder and is seriously hurt.
2. Workers' compensation bars the roofer from suing the subcontractor, their own employer.
3. The roofer sues the building owner and the general contractor under Labor Law 240. Liability is essentially automatic.
4. The owner and GC turn to the subcontract, which almost always contains an indemnity clause and a requirement to carry insurance naming them as additional insureds.
5. They bring the subcontractor into the case for contractual indemnity and tender the claim to the sub's general liability policy. This is the action-over.
6. Whether the subcontractor's policy responds depends entirely on its exclusions.

This chain is why a GC's insurance requirements for subcontractors are not paperwork. The GC is relying on the sub's policy to absorb a claim the GC cannot otherwise defend.

Exclusions that quietly remove the coverage

The New York contractor market includes standard carriers, excess and surplus lines carriers and program MGAs. Price differences between them are often explained by what has been cut out. Read for these:

• Labor Law exclusion. Removes coverage for claims brought under Labor Law 240, 241 or 200. In New York this is close to removing coverage for job-site injury altogether.
• Action-over / injury to employees exclusion. Sometimes labeled "employer's liability" or "injury to employees of the named insured and of any contractor or subcontractor." The broad version excludes exactly the indemnity claim described above.
• Contractual liability limitation. Narrows or deletes coverage for liability you assume in a contract, which is the mechanism the action-over runs through.
• Height limitations. No coverage for work above two or three stories, or above a stated number of feet. Common on cheaper policies for trades that in fact work at height.
• Classification limitations. Coverage only for the operations listed on the policy. If you occasionally do demolition or roofing and it is not listed, it is not covered.
• Subcontractor warranties. A condition that every sub you hire carries insurance with specified limits and names you as additional insured. Fail the warranty and the claim is excluded.
• Additional-insured restrictions. Coverage for the GC only for ongoing operations, not completed operations, or only where a written contract exists before the loss.

A policy with two or three of these can cost a third less and be worth close to nothing on a New York site.

The endorsements New York GCs require

Most GC and owner contracts in New York ask subcontractors for a specific set of endorsements, and certificate reviewers check the forms, not just the limits:

• Additional insured, ongoing and completed operations (ISO CG 20 10 and CG 20 37, or an equivalent blanket form), on a primary and non-contributory basis.
• Waiver of subrogation on the general liability and workers' compensation policies.
• Per-project aggregate, so one job cannot exhaust the limit available to another.
• Notice of cancellation to the certificate holder.
• Umbrella or excess limits, commonly $5,000,000 to $10,000,000 for New York City work, following form over the underlying policies and with no Labor Law exclusion of their own.

A certificate that lists the right limits but references forms that do not exist on the policy is the most common reason a sub is rejected after the award. We issue certificates from the policy forms themselves, which is why ours hold up.

Building a program that survives a 240 claim

• General liability with no Labor Law, action-over or height exclusions, classified for everything you actually do, at $1,000,000 per occurrence and $2,000,000 aggregate.
• Umbrella at the limit your largest contract requires, following form.
• Workers' compensation through a carrier or the New York State Insurance Fund, with employer's liability limits that satisfy your contracts.
• Commercial auto with hired and non-owned coverage for the vehicles your crews use.
• Inland marine for tools and equipment on site and in transit.
• Builder's risk when you are responsible for the structure under construction.
• Subcontractor management. Collect and verify certificates and endorsements from every sub before they start, and keep the written subcontract with the indemnity clause on file. This is what makes your own action-over claims against your subs work.

IMD writes contractors across standard, surplus lines and program markets and reads every form before we present a quote. See the contractors insurance page, or send us the policy you have now and we will tell you what is missing.

Frequently asked questions

What is New York's Scaffold Law?

Labor Law 240(1). It makes owners and general contractors absolutely liable for gravity-related injuries to workers when proper safety devices were not provided, with almost no comparative-negligence defense.

What is an action-over claim?

The claim an owner or GC brings against a subcontractor, through the subcontract's indemnity clause, after being sued by the sub's injured employee. Cheaper GL policies often exclude it.

Which exclusions should I check?

Labor Law, action-over or injury-to-employees, contractual liability limitations, height limits, classification limits, subcontractor warranties and additional-insured restrictions.

General information for New York contractors, not legal advice. Policy forms differ; the issued policy controls. Have your contracts and coverage reviewed by your agent and your attorney.