Why Have Labor Laws 240 and 241 Caused New York Contractors' Liability Rates to Skyrocket?

Labor Laws 240 and 241, commonly known as the "Scaffold Laws," have contributed significantly to rising liability insurance rates for contractors in New York. These laws impose strict liability on contractors and property owners for worker injuries, specifically fall-related accidents. Because liability is automatic, even if the contractor or property owner was not negligent, insurance companies see these claims as high-risk, which has led to a surge in insurance premiums. With frequent lawsuits and the potential for large settlements or judgments, insurers have raised their rates to cover these risks, making it more expensive for contractors to maintain proper liability coverage.

?

What Are Labor Laws 240 and 241??

Labor Law 240 (Scaffold Law): This law mandates that contractors and property owners provide fall protection for workers who are working at elevated heights. It holds contractors and property owners strictly liable for injuries that result from falls, regardless of whether they were at fault for the incident.

?

Labor Law 241: This law extends safety requirements beyond fall protection, requiring contractors and property owners to follow specific construction safety standards to prevent accidents. These standards apply to a variety of construction-related tasks, including the safe operation of machinery and equipment. If contractors or property owners fail to adhere to these regulations, they can be held liable for injuries that occur.

?

Three Examples of Labor Law Liability Claims:?

1. Falling from Scaffolding: A worker falls from a scaffold that was not properly secured, resulting in serious injury. Under Labor Law 240, the contractor and property owner are held strictly liable for the accident, even if the worker was not following safety guidelines.

?

2. Falling Objects: A worker is struck by a falling tool or piece of construction material from an elevated worksite due to improper safety measures. Labor Law 240 holds the contractor and property owner responsible for the failure to provide proper protection against falling objects.

?

3. Ladder Accident: A worker falls from an unstable or improperly secured ladder while working at a height. Under Labor Law 240, the contractor and property owner are automatically liable for the injury due to their failure to provide a safe work environment.

?

Three Examples of Labor Law Claims Involving Subcontractors, General Contractors, and Property Owners:?

1. Subcontractor's Employee Injury: A subcontractor’s worker is injured when falling from an improperly installed scaffold. While the subcontractor’s workers' compensation policy covers the medical costs, the injured worker files an action over claim against the general contractor (GC) and property owner, arguing that the accident was due to unsafe working conditions. The GC and property owner are held liable under Labor Law 240, and their liability insurance will cover the costs.

?

2. Property Owner's Liability: A worker employed by a subcontractor is injured in a fall from a height because the property owner failed to provide adequate fall protection. The worker files a lawsuit against both the subcontractor and the property owner. In this case, the property owner’s liability insurance, with Labor Law coverage, will handle the defense and any resulting judgment.

?

3. General Contractor Liability: A subcontractor’s employee suffers a fall due to inadequate scaffolding at the worksite. The injured worker files a lawsuit against both the subcontractor and the general contractor. The general contractor’s insurance, which includes Labor Law coverage, will respond to the lawsuit and provide legal defense, as the GC is ultimately responsible for ensuring a safe worksite.

?

Importance of Insurance and Hold Harmless Agreements for General Contractors?

For general contractors (GCs), it is vital to have a hold harmless agreement in place with subcontractors. This agreement ensures that subcontractors are responsible for certain liabilities, particularly in the event of an accident. Furthermore, GCs should require subcontractors to list them as additional insureds on their insurance policies, providing the GC with coverage under the subcontractor’s liability policy in the event of a claim. The agreement should also address contractual liability, ensuring that the GC’s policy covers any obligations the subcontractor has agreed to under the contract.

?

Additionally, GCs should request a waiver of subrogation from the subcontractor’s insurance. This waiver prevents the subcontractor’s insurer from pursuing the GC for recovery of damages after a claim. Finally, the GC’s insurance policy should include primary and non-contributory coverage, meaning the subcontractor’s insurance is the primary source of coverage, and the GC’s policy only comes into play if the subcontractor’s coverage is exhausted. These measures help ensure that the GC is protected from the financial fallout of any accidents or lawsuits.

?

Why Contractors Exclude Labor Law Coverage and the Risks They Face?

Many contractors choose to exclude Labor Law 240 and 241 coverage from their liability policies due to the high premiums associated with it. However, this decision can have devastating consequences if a claim is filed under these laws. Without coverage, contractors could face lawsuits that could wipe out their business. In the event of a fall-related injury or accident on-site, the contractor may be held responsible, and without the proper insurance coverage, they could be exposed to significant legal and financial risk. Contractors who exclude this coverage may face "knockout-of-business" lawsuits, potentially leading to bankruptcy or the closure of their operations.

?

How BGES Group Can Help?

BGES Group is one of New York’s leading construction insurance specialists, offering tailored insurance solutions for contractors facing the challenges posed by Labor Laws 240 and 241. With years of experience in the construction industry, BGES Group understands the intricacies of workers' compensation, general liability, and labor law coverage, and they are committed to providing competitive pricing and expert advice.

?

If you’re struggling with rising insurance rates or need to find a new insurance company that offers comprehensive Labor Law coverage, BGES Group can help you find the right policy. Their team works closely with contractors to ensure that all coverage needs are met, including liability protection, workers' compensation, and additional insured agreements with subcontractors.

BGES Group is one of New York, New Jersey, and Connecticut's Construction Insurance Specialists representing 50+ companies, including all the BEST general & umbrella liability programs. We offer all the coverage needed, including property, builders' risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers' compensation, N.Y.S. disability, and group health.? Our commitment to you goes?beyond?the policies we?provide. We are always just a call, text, or email away, ready to assist you, even?on?weekends. We understand the importance of your business and are here to help?you navigate any insurance challenges.?

?

BGES Group are?Workers' Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being canceled, losses causing difficulty getting coverage, in the middle of an audit dispute, misclassified payrolls, or?whatever your issue. We can help!? We have special programs for Auto Services, Contractors (especially in New York), Limousine Services, Logistics Companies, Manufacturers, Recyclers, and?Truckers; we can help ANY tri-state business owner. We are considered "Preferred Agents" for this one program that, if we can get you into, their pricing is excellent, offers long-term coverage stability, and can cover multi-state operations. The program takes the hassle out of doing annual audits, too.?

?

If you want to speak with us, call Gary Wallach at 914-806-5853, click?here to email, or visit our website.

?

Company: BGES Group, 216A Larchmont Acres West, Larchmont, NY?10538

email:?[email protected]

website: https://www.bgesgroup.com

? - Copyright – 2024 - BGES Group