If you're a contractor, especially a general contractor in the state of New York, then you've heard the term action over.
Today, we're going to describe exactly what that means for your business and how you protect yourself through insurance coverage.
Watch the video below to learn more...
Need Business Insurance?
What is "Action Over" and New York Labor Law Exclusion
Now, when it comes to the term action over, there are a few things that we need to talk about.
First, in the state of New York, our tort injury law, specifically because of workers' compensation, does not allow employees to sue their employer for injuries.
It does not essentially allow employees to come after their employer for injuries.
This is because workers' compensation covers medical expenses, lost wages, anything having to do with disability, medication, those kind of things.
So workers' compensation and the subsequent tort law makes it so that employees can't sue an employer when they get hurt on the job. Pretty standard, pretty straightforward.
However, what action over, or the action over exclusion, says, because of New York Labor Law 240 and 241, is that contractors are responsible for providing a safe work environment for their employees.
New York Labor Law 240 and 241
So in this scenario, it is a subset of legal decisions and New York Labor Law 240 and 241.
This essentially outlined that when it comes to contracting businesses, the standard tort injury law that's covered underneath workers' compensation does not necessarily apply.
And in these cases, if an employee gets hurt and is able to prove that the work environment was unsafe, then they can receive a judgment against you, their employer, for being hurt on the job now.
Now, here's the scary part. Because of how this law is written, employees who are injured on the job may be able to go so far as to sue the building owner in which they are working.
Or sue any other third party that may have been involved on that job.
So as a subcontractor or a general contractor, it is incredibly important that you make sure your insurance policy does not have the action over exclusion.
Many insurance policies exclude action over and New York Labor Law 240 and 241. They exclude coverage for any lawsuit brought against this set of legal actions.
READ NEXT: What Is The New York State Insurance Fund (NYSIF)?
make sure that your insurance policy covers action over
So what that means for you is to make sure that your insurance policy covers action over if you are ever going to be doing work that involves employees.
Especially if you have employees or subcontractors.
This is because depending on certificates of insurance, whether you're managing them properly, and how you pay them, subcontractors may be classified as employees of your business.
This stuff gets incredibly scary as the average legal action, the average judgment for a New York Labor law case, is over a million dollars.
And in 2014, one single plaintiff was able to receive $62 million in damages. These are real claims.
They come with a heavy, heavy price tag, and if your insurance policy is specifically excluding action over and New York Labor Law 240, 241 lawsuits, you're in big trouble.
READ NEXT: Workers Compensation Insurance In New York
The Rub
By understanding action over and New York Labor Law 240 and 241, you can help keep your workers safe and ensure that they are compensated if they are injured on the job.
So here's the deal. Work with someone who knows what they're doing.
Work with an insurance agent who's willing to walk you through this process, answer your questions, and make sure that you have coverage.
This is where we come in at Rogue Risk.
If your current insurance professional has never addressed issues like this with you before, I’d encourage you to reach out to us today.
- You can call or text us at 518.960.6600
- Click here to contact us via email.
I look forward to introducing you to a new way of viewing your insurance program.
Thank you,
Ryan Hanley
