Insurance Risks and Mitigation in New York

March 10, 2020

two construction workers reviewing documents outside at worksite near large crane

image credit: Andrey_Popov/

There are many insurance risks that can affect a construction project. If you’re building in New York, it’s important to know what your risks are and how to protect yourself from major losses. Keep reading to learn a couple of common risks in New York and how to mitigate them.

Cranes are a major risk in New York

Cranes are one of the highest risks when working on a construction project in New York. Crane accidents have become an area of focus for the construction industry as New York has experienced several significant crane collapses in the recent past that has garnered attention from the national media. Crane suppliers and erectors have come under scrutiny for providing insufficient equipment and under-performing inspections, resulting in catastrophic losses.

Those construction companies that lease or rent cranes should carefully review the rental agreements to ensure they are fully aware of the contractual requirements. Additionally, proper research should go into hiring an experienced crane operating crew with no loss history.

The claims environment in New York can be dangerous

Another big risk in New York is the claims climate. The claims environment has become extremely volatile in New York as juries continue to award considerable damages in lawsuits. The courts continue to be pro-plaintiff and have recently been expanding the scope of the laws to the benefit of plaintiffs. Furthermore, as the cost of living continues to soar, moderate verdicts are no longer viewed as reasonable compensation.

To combat these challenges, insurance carriers are now more trial adverse and look to resolve these claims through mediations. While cases can be defendable, the cons far outweigh the pros of asking a jury to determine the outcome of a lawsuit. 

Action Over helps benefit injured employees

Overall one of the ways in which General Contractors and Construction Managers look to mitigate risk for losses involving Bodily Injury and Property Damage is to tender the risk to lower-tier subcontractors. Predominantly done through Contractual Indemnification and Additional Insured clauses located within the subcontractor’s contract, this practice is called Action Over.

Action Over is when an injured employee, after collecting Worker’s Compensation benefits from their employer, sues a third-party (i.e. Owner)—because of the contractual relationship between the third-party and the employer, the liability is passed back to the employer because of the said contractual relationship. This allows for the at-fault party to assume the risk for the loss when they are otherwise protected by New York’s Workers Compensation Exclusive Remedy Doctrine. Plaintiffs are typically barred from bringing direct lawsuits against their employers when they experience a workplace accident.

The laws permit the injured party to bring a lawsuit against the General Contractor or Construction Manager as they have a non-delegable duty for overall site safety. However, through Contractual Indemnification and Additional Insured clauses, the General Contractor and Construction Managers are able to transfer this risk back down to the employer where they look to remain fully insulated from the risk. 

If you are interested in learning more about your upcoming insurance project’s risks, reach out to TSIB today! We can discuss what your risks are and how to help you mitigate them. You may also download our eBook, "Traditional vs. CIP Insurance," to learn which insurance method will work best for your next construction project. 

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Topics: Wrap-Up Insurance

Written by The TSIB Team

All Authors and TSIB