Enacts the "construction laborer insurance protection act (CLIPA)"; requires every policy or contract of insurance issued to an owner, contractor or subcontractor performing the work of erection, demolition, repairing, altering, painting, or cleaning of a building, structure or edifice to provide coverage for bodily injury and death of workers.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8127
SPONSOR: Weprin TITLE OF BILL:
An act to amend the insurance law, in relation to requiring insurance
policies obtained by contractors, subcontractors and owners to cover
injuries to and deaths of workers
PURPOSE OR GENERAL IDEA OF BILL:
CLIPA will require insurance policies obtained by contractors, subcon-
tractors and owners, the workers of whom are protected by article ten of
the labor law, to cover injuries and death for those workers. Such poli-
cies will no longer be permitted to exclude such workers.
SUMMARY OF PROVISIONS:
Section 1 names the bill the Construction Laborer Insurance Protection
Act ("CLIPA").
Section 2 adds a new subsection (k) to section 3420 of the insurance law
to require every policy or contract of insurance issued to an owner,
contractor or subcontractor performing the work of erection, demolition,
repairing, altering, painting, or cleaning of a building, structure or
edifice to provide coverage for bodily injury and death, and prohibits
them from excluding or limiting such coverage to persons covered by
article ten of the labor law.
Section 3 sets forth the effective date of the legislation 90 days after
passage.
JUSTIFICATION:
Insurance policies issued to owners, contractors, and subcontractors on
a construction project covered by article ten of the labor law should
cover liability for the bodily injury or death for any person who is
injured because of violations,of the protections and mandates of article
ten of the labor law.
The problem this bill seeks to address is the practice of insurers
adding, and employers accepting, a specific exclusion in such policies
that denies such coverage for their own employees or other persons who
need coverage.
CLIPA prohibits the deceptive industry practice by a minority of insur-
ance companies who issue policies purporting to cover risks associated
with construction site accidents, but cleverly exclude coverage for
injuries to construction workers.
Since construction workers are virtually the only persons permitted on
construction sites, these policies essentially cover none of the risks
to workers associated with construction. These policies are the very
definition of "illusory coverage." The premiums charged are a windfall
to the insurance companies issuing these policies.
The victims of this deceptive insurance practice are not limited to
construction workers. They also include property owners and general
contractors who require subcontractors to obtain insurance policies
naming them as additional insureds. When the coverage proves to be illu-
sory, property owners and general contractors are put at great financial
risk.
The victims of illusory policies extend further to workers' compensation
insurance carriers. These carriers depend upon recoveries in third-party
personal injury cases to recoup their expenditures for an injured work-
er's medical care and lost wages. When coverage is illusory, an
adequate third-party recovery may not be available to an injured worker
who received workers' compensation benefits and, likewise, the workers'
compensation insurance carrier may not recoup any of the benefits paid
to the injured worker. These payments can easily exceed millions of
dollars over the lifetime of a catastrophically injured worker.
The State of New York is the final and inevitable victim of illusory
insurance policies. Workers' compensation benefits are classified by
levels based upon severity and permanency of injury. Most workers'
compensation benefits are available for only a limited period of time.
When these benefits are exhausted and the injured worker cannot resume
gainful employment, municipalities must bear the costs of continued
medical care through Medicaid and other public assistance programs.
PRIOR LEGISLATIVE HISTORY:
New bill
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None
EFFECTIVE DATE:
This bill shall be effective ninety days after enactment.
STATE OF NEW YORK
________________________________________________________________________
8127
2025-2026 Regular Sessions
IN ASSEMBLY
May 1, 2025
___________
Introduced by M. of A. WEPRIN -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to requiring insurance
policies obtained by contractors, subcontractors and owners to cover
injuries to and deaths of workers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the
2 "construction laborer insurance protection act (CLIPA)".
3 § 2. Section 3420 of the insurance law is amended by adding a new
4 subsection (k) to read as follows:
5 (k) Notwithstanding any other law, regulation or rule to the contrary,
6 every policy or contract of insurance issued to an owner, contractor or
7 subcontractor performing the work of erection, demolition, repairing,
8 altering, painting, or cleaning of a building, structure or edifice
9 shall provide coverage for bodily injury and death and shall not exclude
10 or limit from coverage any activities protected by article ten of the
11 labor law or exclude or limit such coverage to any person protected by
12 article ten of the labor law.
13 § 3. This act shall take effect on the ninetieth day after it shall
14 have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11654-01-5
