Cost of General Contractor Insurance: Factors To Consider in NY
Contracting work involves many sources of risk, including falls, exposure to toxins, injuries from equipment, and property damage. General contractor insurance in NYC is a fact of life for several reasons.
New York State offers employees, subcontractors, and other parties legal protections on the worksite. As such, the liability to a contractor performing work in New York can be high. Large payouts contribute to the high cost of general contractor insurance.
New York State requires contractors to have workers’ compensation insurance. Furthermore, clients will often refuse to work with contractors unless they can present a certificate of insurance. A general contractor liability policy should have coverage limits of $5,000,000 or $6,000,000.
General Contractor Insurance Can Be Expensive in NY
Contractors can expect to pay tens of thousands of dollars for liability insurance. These costs vary considerably based on the type of insurance and the contractor’s characteristics.
The cost of general contractor insurance is typically a percentage of your business. It can be as high as $150,000 for a large business that carries out expensive construction projects.
Scaffold Law Protection
New York State Labor Law 240 (the Scaffold Law) dates back to 1885. It allows plaintiffs to collect damages from property owners and contractors when they suffer an injury in an accident involving gravity. One example is an employee injured in a fall or struck by a falling object, if the injured party did not have proper protection.
The law defines injuries relating to gravity in broad terms. An employee who falls into a basement or has a light fixture fall on them could claim damages through Scaffold Law violations even though they were at ground level.
The Scaffold Law makes it difficult for defendants to avoid liability. Contractors and business owners working in New York state could risk their financial future if they operate without coverage.
An insurance policy with a Scaffold Law exclusion would cost less than one that covered scaffold law violations. However, the contractor could be on the hook for millions of dollars of liability.
Factors That Can Reduce the Cost of General Contractor Insurance
When you discuss insurance policies with your insurance company, you might be able to lower your premiums by ensuring that the representative understands your situation. Avoid paying more for coverage that is not appropriate for your business or leaving dangerous gaps in your coverage.
The Track Record of Your Business
Insurance is all about managing risk. A new contractor just starting in the industry is a gamble for insurance companies, as is a contractor with a checkered past.
Reduce your premiums by demonstrating to insurance companies that you:
- Understand your obligations under New York State Law.
- Are willing to do what is necessary to provide a safe environment for employees.
- Have completed many projects in New York without safety violations or workplace injuries due to negligence.
Whether You Work in New York City
Insurance in New York City, particularly policies with action over insurance, costs more than the rest of the state. You might get by with less coverage if you do most of your business in New Jersey, Pennsylvania, or other parts of New York State. You could limit your liability in NYC by only choosing jobs there that do not require comprehensive coverage.
Insurance policies with low coverage limits cost less and might satisfy some clients. However, contractors who want to do business in New York State, especially New York City, should appreciate that judgments against contractors can exceed millions of dollars.
Whether You Have Action Over Insurance
Action over refers to claims made against a third party in addition to any workers’ compensation claim the employee filed against the employer. For example, suppose you hire a subcontractor to perform a maintenance or construction task. An injured employee of the subcontractor might file a workers’ compensation claim with their employer and sue you for failing to provide adequate safety protection.
Depending on the wording of your contract with the subcontractor, you could face significant liability.
Comprehensive and Customized Coverage from the Experts at TCE Insurance Services
TCE Insurance Services is a respected provider of transportation, construction, and environmental insurance. Our insurance teams in Staten Island (718-804-5812) and Long Island (631-336-2572) are ready to protect your business from risk. We will work with you to reduce the cost of general contractor insurance and other invaluable business insurance policies.
Get to know more about environmental insurance and transportation insurance by speaking to one of our consultants.