Overview
NYC construction projects require multiple types of insurance coverage, mandated by DOB, building owners, and general contractors. Failure to maintain proper insurance can result in stop-work orders, violation of lease terms, and personal liability.
Required Insurance Types
- Commercial General Liability (CGL) - Minimum $1 million per occurrence, $2 million aggregate. Covers bodily injury and property damage claims. NYC projects typically require $2-5 million limits.
- Workers Compensation - Required by NYS law for all employers. Covers employee injuries on the job. No minimum limit; coverage is statutory. Proof of coverage (C-105.2 form) is required by DOB.
- Disability Benefits - Required by NYS law. Covers non-work-related disabilities for employees.
- Builder Risk - Covers the building under construction against fire, wind, vandalism, and other perils. Required by most construction contracts and lenders.
- Umbrella/Excess Liability - Additional coverage above primary CGL limits. Commonly $5-25 million for NYC projects.
Additional Insured Requirements
NYC construction contracts typically require the contractor to name the property owner, general contractor, and sometimes the lender as additional insureds on their CGL policy. This protects these parties from claims arising from the contractor work. NYC Labor Law Section 240 (the "Scaffold Law") creates strict liability for property owners for gravity-related injuries, making additional insured status critical.
OCIP/CCIP Programs
Larger projects may use Owner-Controlled Insurance Programs (OCIP) or Contractor-Controlled Insurance Programs (CCIP), also known as "wrap-up" insurance. These programs provide a single policy covering all parties on the project, potentially reducing costs and coverage gaps.
DOB Insurance Requirements
DOB requires proof of workers compensation and disability insurance before issuing work permits. The contractor must provide certificate numbers that are verified by DOB. Insurance lapses can result in permit suspension and stop-work orders.
Frequently asked
What insurance do I need for construction in NYC?
At minimum, you need Commercial General Liability, Workers Compensation, and Disability Benefits insurance. Most projects also require Builder Risk and Umbrella/Excess Liability coverage. DOB requires proof of workers comp before issuing permits.
How much does construction insurance cost in NYC?
Costs vary widely by project size and risk. General liability for a small contractor might cost $3,000-$10,000 annually. Workers compensation varies by trade and payroll. Large projects can have insurance costs of $50,000-$500,000+.
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