New York's Cooperative and Condominium Community

Habitat Magazine Insider Guide



Risk: Transfer to Someone Else

Michael Wolfe

President, Property Management

FirstService Residential


Group action. There was a contractor’s employee who fell off a ladder during a job at a co-op and injured his leg, resulting in four operations. He was unable to return to work. The worker sued the company he worked for, but it didn’t have insurance coverage for this event. And the reason why is that the company had an insurance policy with something called an “action over” clause, which excluded events such as this. So the worker turned to the co-op, the managing agent and the subcontractor — really anyone who could possibly be named — and sued them all.


Read the fine print. It all comes down to transferring the risk. The key is to work with a contractor that doesn’t have the “action over” exclusion in their insurance. This will mean that its prices are higher, but if they’re within reason, it is well worth it to not have that exposure and risk transferred onto your building. It’s very important to spend time vetting insurance policies. Your managing agent should be the conduit to your insurance broker, and if you don’t have a managing agent, your insurance broker should review the insurance policies of all the workers hired by your building.

Caveat emptor. It’s “buyer beware” because with New York’s labor laws, the building or apartment owner is responsible as well as the contractor, even though the owner may not have contributed in any way toward an injury. You would hope that when you hire a company to work in your building or apartment, it would be responsible for the conditions on site, and if workers are injured, they could make a claim against the company. But many times that isn’t the case.

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