Do you want to see fireworks on the Fourth of July?
Ask a seasoned NYC contractor about action-over claims!
Employees can’t sue their employer for work place injuries, right?
That’s what workers compensation is for, isn’t it?
Yes, but no… sort of.
This is New York baby! We sue for everything here and work place injuries are no exception. Due to antiquated labor laws 240 & 241, New York is one of the only states where a contractor can be sued by employees through a third party.
“What? That’s crazy!”
I know, and the resulting compensation numbers can really make fireworks shoot out of your eyes.
Third-Party Action-Over Claim
The fancy term is a “third-party action-over claim”.
In laymen’s terms, it’s a lawsuit against employers for money beyond workers compensation due to contract obligations. To break down what can be a confusing topic, a common example of action-over in practice might look like this:
- The building owner hires a general contractor for renovations (you).
- A signed contact indemnifies (this means they can’t be held liable) the owner from any work-related lawsuit.
- Someone gets injured on the jobsite.
- The employee files for and receives workers compensation.
- Additionally, they open a lawsuit alleging the building owner didn’t maintain a safe work environment.
- Due to your indemnity agreement, the liability is shifted off the owner and onto YOU, the contractor, in a court of law!
What Can You Do About Action-Over?
Consequently, now that you know about action-over, you might want to strap it to a firework and send it flying. This situation doesn’t sound fair to us either, but these are the rules we must play by in New York. Because of this action-over contingency, premiums can be 10x more expensive for New York contractors than in other parts of the country. Compared to the costs of even one claim however, the increased premiums can look like a walk in the park.
Taking control of your exposure today doesn’t need to be complicated.
Utilize our four-step process to breakdown the complexities of insurance and keep your company protected.
I hope you all have a fantastic Fourth Of July – we can touch base after the holiday!
Daniel
Daniel@ZRMBrokerage.com
Call or Text 914-450-9360
