Action Over Coverage uses cookies to ensure you get the best experience on our site.
In the New York construction industry, the legal landscape is governed by two powerful statutes: Labor Law 240 and Labor Law 241. Together with Section 200, these laws create a unique "strict liability" environment found nowhere else in the United States. For contractors operating in Manhattan, The Bronx, Queens, Brooklyn, and Staten Island, understanding these laws is not just about safety—it is about business survival.
New York Labor Law 240, commonly known as the Scaffold Law, is perhaps the most significant risk factor for contractors in the state. It imposes absolute liability on property owners and general contractors for "gravity-related" injuries.
What it Covers:
Falls from Heights: Injuries involving scaffolds, ladders, hoists, stays, slings, hangers, blocks, pulleys, braces, irons, and ropes.
Falling Objects: Injuries caused by tools or materials that fall because they were not properly secured or hoisted.
The Standard of Absolute Liability: Under Section 240, if a worker is injured in a gravity-related accident and it is proven that proper safety devices were missing or inadequate, the owner and contractor are held 100% liable. Remarkably, this applies even if the worker’s own negligence contributed to the accident. The only common defense is the "sole proximate cause" rule—proving that the worker’s actions were the only reason for the injury—which is notoriously difficult to prove in New York courts.
While Section 240 focuses on heights, Labor Law 241 (specifically 241(6)) addresses broader site safety and operational hazards during high-risk activities.
What it Covers:
Industrial Code Compliance: It mandates that all areas of construction, excavation, and demolition must be operated and equipped to provide "reasonable and adequate protection" as defined by the New York State Industrial Code.
Ground-Level Hazards: This includes trip-and-fall hazards, chemical exposures, air contamination, and trench collapses.
The Liability Standard: Unlike the absolute liability of Section 240, liability under Section 241(6) is "strict" but allows for comparative negligence. This means a jury can reduce the payout if the worker was partially at fault. However, the duty remains "non-delegable"—an owner or GC cannot shift the legal responsibility to a subcontractor to escape the initial lawsuit.
Because of the extreme financial exposure created by these laws, many insurance carriers have exited the New York market or added a dangerous Action Over Insurance Exemption to their policies.
The Threat of Third-Party Action: Since workers' compensation laws prevent an employee from suing their direct boss, the employee instead sues the property owner or GC under Labor Law 240/241. Those parties then "tender" the claim back to you, the employer, based on your indemnification agreement. If your General Liability Insurance ("services/general-liability-insurance/") has an "Action Over" exclusion, you are left to pay the settlement—which often exceeds $1 million—out of your own pocket.
Headquartered at 20 Woodsbridge Road in Katonah, NY, Action Over Coverage specializes in the technical nuances of the New York insurance market. We conduct a specialized evaluation of your risk profile to ensure your coverage actually responds to Labor Law claims.
Don't let a "silent exclusion" in a standard policy result in financial ruin. Contact us today at 914-729-5675 to ensure your firm is protected from the unique risks of New York Labor Law.
Action Over Coverage. This article provides general information and does not constitute legal advice. Please consult with a licensed attorney or broker to discuss the specific risks of your project.