In New York, the construction injury claim most likely to wipe out a contractor isn't the one your own worker files — it's the one a subcontractor's worker files against you. Action over coverage decides whether that loss lands on your policy or stays where the subcontract tried to put it.
General Liability · New York · Regulated by NY DFS · General Liability in New York
An action over claim happens when an injured subcontractor's employee collects workers' compensation from their own employer, then sues the upstream general contractor or property owner in tort, and that upstream party "actions over" — passing the loss back to the employer through contractual or common-law indemnity. Action over coverage is the general-liability coverage that keeps (or buys back) the policy's insured-contract exception so the carrier actually answers that indemnity demand, instead of an action-over exclusion quietly cutting it off.
An action over claim — also called a third-party-over claim or third-party-over action — is the most expensive and most common construction-injury loss in New York. It exists because of a structural gap between workers' compensation and tort law.
Here is how it plays out, step by step:
The claim "passes over" the injured worker, who is out of the case against their employer, and lands on that employer by way of the upstream party — hence "action over." Workers' comp exclusivity only shields the employer from suit by its own employee. It does not stop the worker's direct tort suit against the GC, and it does not stop the GC's indemnity claim back against the sub. Whether the policies in that chain actually insure the pass-back is the entire subject of this page.
New York is the only state that pairs strict-liability statutes — which drag owners and GCs into nearly every height-related injury — with a downstate jury pool known for very large verdicts. Three Labor Law sections drive the exposure.
Enacted in 1885, §240(1) puts absolute (strict) liability on owners, general contractors, and their agents for gravity-related injuries — falls from height, or being struck by a falling or hoisted object — when adequate safety devices weren't provided. The duty is non-delegable: it attaches even if the owner or GC never supervised, directed, or controlled the work and was never on site. The plaintiff doesn't have to prove negligence, only that the safety violation was a proximate cause of the injury, and a worker's own comparative fault generally won't reduce recovery — except in the narrow "sole proximate cause" or recalcitrant-worker situations.
Requires owners and GCs to comply with specific New York State Industrial Code rules (12 NYCRR Part 23) during construction, demolition, and excavation. The duty is again non-delegable, but liability sounds in negligence: the plaintiff has to cite a concrete, specific code provision, and comparative fault applies. Less plaintiff-friendly than §240(1), but still a vicarious hook onto the owner and GC.
Codifies the common-law duty to provide a reasonably safe place to work. This one is not strict liability — recovery generally requires the owner or GC's supervision and control over the injury-producing work, or actual or constructive notice of a dangerous condition.
Put together, §§240/241/200 let an injured sub's employee sue the GC and owner directly, usually with at least one strict-liability theory in play. That is exactly what manufactures action-over claims at scale.
The 1996 Omnibus Workers' Compensation Reform Act amended Workers' Compensation Law §11 to bar an upstream party from getting common-law contribution or indemnity from the injured worker's employer — unless one of two exceptions applies:
The statutory "grave injury" list is short and covers only these: death; permanent and total loss of use, or amputation, of an arm, leg, hand, or foot; loss of multiple fingers; loss of multiple toes; paraplegia or quadriplegia; total and permanent blindness; total and permanent deafness; loss of nose; loss of ear; permanent and severe facial disfigurement; loss of an index finger; and an acquired brain injury from external physical force resulting in permanent total disability.
Because that list is closed and strictly applied, the vast majority of serious-but-non-catastrophic injuries — back injuries, single-limb fractures, herniated discs, partial loss of use — simply don't qualify. So in most real claims, the written subcontract indemnity is the GC's only practical way to recover from the sub. No enforceable written indemnity and no grave injury, and the GC eats the loss with no recourse. That's why the subcontract clause, and the insurance standing behind it, carry so much weight.
The unendorsed ISO Commercial General Liability form (CG 00 01) carries an Employer's Liability exclusion (Exclusion "e") that bars bodily injury to "an employee of the insured" arising out of employment. On its face that would knock out action-over claims. But the standard form includes a critical carve-back:
So on an unmodified CGL, the exclusion bars the worker's direct claim against their own employer — which workers' comp handles anyway — but the "insured contract" exception preserves coverage for the insured's contractually assumed obligation to indemnify an upstream party for that employee's injury. That carve-back is the native source of action over coverage. When someone says a sub "has action over coverage," they usually mean the sub's CGL still carries this intact insured-contract exception, so the sub's carrier will respond to the GC's indemnity demand.
Bottom line: action over coverage isn't an add-on you bolt onto a base policy — it's already baked into standard ISO language. The catch in New York is that carriers routinely take it back out.
In the New York construction market, carriers commonly endorse away the coverage described above. The usual mechanisms:
One clarification on form numbers: ISO's well-known CG 22 94 / CG 22 95 forms ("Exclusion – Damage To Work Performed By Subcontractors On Your Behalf") are the property-damage / "your work" completed-operations versions. They are not the employee bodily-injury action-over forms — don't conflate them. The bodily-injury strip-out comes from employer's-liability and cross-suits endorsements and contractual-liability limitations like CG 21 39. Always read the actual endorsement text, not just the form number.
Given how routinely carriers strip the coverage, "action over coverage" in the New York contractor market means a policy that does NOT carry an action-over / employer's-liability strip-out endorsement, or one where the carrier has affirmatively bought the coverage back — restoring the insured-contract exception and contractual-liability coverage so the carrier will respond to an upstream indemnity claim arising from an injured employee. A buy-back typically looks like one of two things:
For New York height and Labor Law-exposed classes, that buy-back is frequently available only in the excess & surplus (E&S) / surplus-lines market. Many admitted carriers decline NY construction outright, carve out the five boroughs, or attach action-over and height exclusions by default. Non-admitted (E&S) carriers can tailor coverage — including an action-over buy-back — but they typically charge more, attach fully earned premium, and add state surplus-lines tax and stamping fees. Acolite is a licensed broker that places action-over and Labor Law coverage for New York GCs through appointed carriers and surplus-lines markets, subject to underwriting and the terms of the policy actually issued.
A defensible downstream risk-transfer package means getting all of the following from every sub — and verifying each against the actual endorsements and policy forms, not just the certificate of insurance:
The contractual-indemnity exception to WCL §11 only helps if the clause itself is enforceable under §5-322.1, and the transfer only works if the sub's policy actually covers that obligation. Both the clause and the coverage have to survive.
You can't tell whether a policy has an action-over exclusion from the certificate of insurance alone. The COI shows limits and that AI status was added — but not the exclusionary endorsements that actually defeat the transfer. To verify, do this:
The wording — not the headline, not the form number — determines coverage. Read the text.
These are the gaps that competitors gloss over and that cause denied claims or rejected certificates.
A non-standard endorsement that rewrites Exclusion e to "any insured," or deletes the insured-contract exception, leaves the GC's indemnity claim against the sub with no insurance behind it. Usually a proprietary, carrier-specific form — read the endorsement text, not the COI.
Some EL exclusions reach only "employees of the insured"; others get broadened to "employees of any insured" or "of any contractor or subcontractor." The broader the wording, the more action-over scenarios get excluded. The text controls, not the headline.
CG 21 39 deletes paragraph f. from the "insured contract" definition, wiping out coverage for tort liability assumed in a contract — i.e., most construction indemnity. One of the most damaging endorsements to find on a sub's policy. Confirm para f. is intact.
Bars suits by one insured against another insured. Because NY action-over recoveries typically run from an owner/GC additional insured against the sub's policy — a suit between insureds — a cross-suits exclusion can take out both the AI channel and the contractual-indemnity channel at once.
NY action-over recoveries usually lean on two channels in the sub's program: the GC's additional-insured status (CG 20 10 + CG 20 37) and the sub's contractual indemnity to the GC. Both have to survive the policy's exclusions; an action-over exclusion can defeat the indemnity even when AI status is granted.
Confirm whether the sub's policy owes the GC a defense — and whether defense costs erode limits — for both the AI grant and the contractual indemnity. An exclusion that survives to indemnity but leaves a defense gap, or defense-within-limits, can quietly push six-figure litigation costs back onto the GC.
Want your New York general liability checked for this exposure?
Send your policy or the contract requirement. A licensed broker will tell you whether you are covered before you bind.
| Factor | Impact | Detail |
|---|---|---|
| Trade / height (roofing, steel, scaffolding, masonry) | Major | Work-from-height trades pay far higher rates than ground-level classes for the same payroll, reflecting §240(1) frequency and severity. A single Scaffold Law action-over claim can run to a policy-limits loss with no negligence defense. |
| Removing the action-over exclusion (buy-back) | Major | A policy with robust action-over protection costs materially more than a stripped one — but the cheaper policy simply omits the exposure that actually bankrupts NY contractors. Buy-backs may be separately rated, sublimited, or carry a higher deductible. |
| E&S / surplus-lines placement | Major | Many admitted carriers decline NY construction or attach action-over/height exclusions by default, pushing height and Labor Law classes into E&S. Non-admitted markets can tailor an action-over buy-back but typically cost more, add fully earned premium, and carry surplus-lines taxes and fees. |
| Payroll (GL exposure base) | Moderate | Payroll is the rating base for many contractor classes — more payroll, more premium — and the split between subcontracted and own payroll moves the rate too. |
| Residential vs commercial / new construction | Moderate | Residential work, especially 1–4 family and NYC walk-ups, is often surcharged or excluded; commercial new construction and height work drive both rate and capacity constraints. |
| Limits / excess tower structure | Moderate | Higher primary limits, excess and umbrella towers, and any action-over buy-back sublimits or deductibles all move premium. Large NYC contracts often demand high combined limits that are only reachable by stacking a tower. |
It's when an injured subcontractor's employee collects workers' compensation from their own employer, then sues the upstream general contractor or property owner in tort, and the upstream party "actions over" — passing the loss back to the employer through contractual or common-law indemnity. The insurance question is whether the policies in that chain cover the pass-back.
Action over coverage is general-liability coverage that keeps (or buys back) the policy's insured-contract exception, so the carrier responds to an insured's contractually assumed liability for injury to an employee — i.e., a policy without an action-over exclusion and with the insured-contract exception intact. It's what makes risk-transfer to a sub, or your own indemnity to an owner, actually pay.
No. Comp bars the worker from suing their own employer, but not from suing you (the GC) or the owner. In New York, Labor Law §240(1) makes you strictly liable for height injuries regardless of your conduct, so these suits land on you constantly — and you then have to look to the sub's indemnity and insurance to recover.
You can't tell from the certificate of insurance alone. Request the Schedule of Forms & Endorsements and the actual endorsement pages. Look for "Action Over," "Third-Party-Over," employer's-liability exclusions amended to "any insured," cross-suits exclusions, and CG 21 39. Then ask the agent to confirm in writing that no action-over exclusion applies.
CG 21 39 deletes the "tort liability assumed in a contract" piece of the insured-contract definition, wiping out most construction-indemnity coverage — bad for action over. CG 24 26 keeps contractual coverage but limits it to situations where the named insured is at least partly at fault — narrower than full coverage, but far better than CG 21 39, and roughly consistent with what NY anti-indemnity law allows anyway.
No. Those ISO forms are the "Damage To Work Performed By Subcontractors On Your Behalf" exclusions — property-damage / completed-operations forms. The bodily-injury action-over strip-out comes from employer's-liability and cross-suits endorsements and contractual-liability limitations such as CG 21 39. Don't rely on a form number; read the text.
Under WCL §11 you generally can't get common-law indemnity from the worker's employer unless the worker suffered a statutorily defined "grave injury" — death, amputation or total loss of use of a limb, loss of multiple fingers or toes, paraplegia or quadriplegia, total permanent blindness or deafness, loss of nose or ear, severe facial disfigurement, loss of an index finger, or a brain injury causing permanent total disability. The list is closed and narrowly read. Most injuries don't qualify, so your real recovery route is the written subcontract indemnity.
Only partly. Additional-insured status gives you defense and indemnity as an insured on the sub's policy. But the action-over recovery usually also leans on the sub's contractual indemnity to you — and an action-over or cross-suits exclusion can defeat that even when AI status is granted. You want both channels intact: CG 20 10 + CG 20 37 AI plus a covered contractual indemnity.
CG 20 10 for ongoing operations and CG 20 37 for completed operations — use the pair, because Scaffold Law claims can land years after the sub finishes. Add primary & non-contributory wording and a waiver of subrogation in your favor, and watch for AI endorsements that bury an action-over limitation inside the grant.
Labor Law §§240/241 create absolute liability for height injuries with no comparative-fault offset, and downstate verdicts run large. Carriers price that severity tail; many decline NY altogether or exclude the five boroughs and height work. Real action-over coverage costs more because it covers the exposure that actually causes catastrophic NY losses.
Often, yes — especially for height or Labor Law-exposed trades and five-borough work. Many admitted carriers won't write it, or they attach action-over/height exclusions. E&S carriers can tailor coverage, including an action-over buy-back, but typically cost more and may carry fully earned premium and surplus-lines taxes and fees. Availability and terms are subject to underwriting.
Not in New York. GOL §5-322.1 voids any construction indemnity for the GC's or owner's own negligence, "in whole or in part." Draft the clause limited to the sub's fault with a "to the fullest extent permitted by law" qualifier, so the enforceable portion survives — courts will enforce a properly limited partial-indemnity clause.
Other coverage questions New York contractors run into on the same kind of job.
Send your contract or current policy. We typically send quote options in 2 hrs after we have the required information. No fee. No obligation.