How the New York Scaffold Law Affects Albany Business Insurance Policies

new york scaffold lawThe New York State Scaffold Law is designed to provide protection to “gravity-related” injuries to workers on the job.  A very common example of this situation and how the New York Scaffold Law got it’s name, construction workers falling off scaffolding during a project.

Today we’re going to discuss how you can protect your business from these types of lawsuits using Albany business insurance policies.

Technically the New York Scaffold Law, also know as Section 240 of the New York Labor Laws that govern scaffolding and other apparatus and devices, is used by employees on the job.  Over the years through various court cases throughout the state and even cases held at the New York State Supreme Court rulings have set a precedent of zero culpability on the injured worker.

Now this isn’t a political article so I’m not going to take a side on whether or not this law and it’s application makes sense or not…

What I care about is how you protect your local business from a New York Scaffold Law / Labor Law liability case.

As can you see in this article in the Albany Business Review (NY Open for Business? Scaffold Law Suggests Otherwise), by Adam Sichko, New York Scaffold Law and in a more general sense New York Labor Law causes are the most frequent type case brought before New York State’s highest courts.

But it isn’t the frequency of Scaffold Law cases that scares me as an insurance agent…

…it’s the large number of Albany business owners that don’t have any business insurance or defense coverage against this type of contractual liability lawsuit.

According Ryan Murray, Vice-President at The Murray Group:

“Contractors and construction related businesses including property owners are the most at risk from Scaffold Law claims.”

Is Your Business Insurance Policy Missing Contractual Liability?

Contractual liability insurance has been automatically provided within the commercial general liability policy since 1986.

This is where the problem arises.  For many types of Albany businesses contractual liability is a part of their general liability insurance and in a general sense is not a coverage they need to worry about being denied a claim for.

However, in 2001 contractual liability started to be named as an exclusion to the general liability policy for certain classes of business.  Most notably general and artisan contractors and depending on the insurance carrier and unique risk, property owners.

What this means is, you could have purchases a general liability insurance policy thinking that contractual liability would be covered when really it’s listed as an exclusion to coverage in the policy forms.

This is bad.

It’s imperative that you discuss contractual liability with your independent insurance agent.

As a rule of thumb, policies that have coverage for contractual liability will cost more than policies that exclude coverage.

However, as seen in the shear volume of cases related to contractual liability, New York Scaffold Law cases included, the additional cost in insurance premium is well worth what you could pay when your business is drawn into a lawsuit.

If you have questions regarding contractual liability or your business insurance program as a whole please give us a call at (518) 456-6688 or you can click here to contact us via email.

Thank you,

Ryan Hanley, CIC