Update on General Liability Insurance

Update on General Liability Insurance

New general liability insurance requirements affect current construction and demolition projects

There are new general liability insurance requirements for construction or demolition projects now in effect. Now, when pulling permits, contractors must provide proof that the new insurance requirements have been met under RCNY §101-08.

For projects that require additional project-specific insurance, several documents must be submitted to the Department of Buildings before a new or renewed permit will be issued. These documents include first the Project-Specific General Liability Insurance Summary and Affirmation (form PGL1), which the Project-Specific General Liability Insurance Tool will automatically generate based upon the information the individual user provides. The Insurance Tool may be accessed in the Applications and Permits section of the Department of Buildings website. Applicants must print the PGL1 form, sign and have the form notarized, as well as have an authorized insurance broker sign the form.

Second, a certificate of liability insurance (ACORD) is required, and third, the permit’s expiration date may coincide with the expiration of the project-specific insurance. The permit expiration date will be the earliest of either 1) one year from the date the permit was issued; 2) the expiration date of the project-specific general liability insurance policy that was provided as proof when the permit was obtained; or 3) the expiration date of the general liability insurance policy provided to the Department of Building’s licensing unit. Permits that do not require project-specific general liability insurance will expire one year from the date the permit was issued or the day the general liability insurance policy expires, whichever is earlier.

Exemptions to the new general liability insurance rule §101-08

There are, however, exemptions to Rule §101-08, in which project-specific general liability insurance is not required. Project-specific general liability insurance is not required for a job that is a one or two family home, the excavation is less than 12 feet deep, the project is not on the lot line with an existing structure, and the project’s height is less than 35 feet. Additionally, project-specific general liability insurance is not required for storage sheds, garages or similar accessory uses for residential structure. However, tower crane projects are not exempt from these insurance requirements, and every project that will use a tower crane must have general liability insurance of $80 million dollars, regardless of the permit or scope of work.

The General Liability Insurance requirements are determined by the permit type

The insurance requirements are determined by the permit type, the height and number of the tallest adjacent building, and the height and number of stories of the proposed construction. For foundation or full demolition permits, buildings less than 7 stories and less than 75 feet will require $5 million dollars in liability insurance, with a maximum of $15 million dollars in liability insurance for foundation permits and $25 million dollars in liability insurance for full demolition permits for buildings greater than 14 stories or greater than or equal to 150 feet. New building permits or major alteration permits, which include demolition of more than 50% of the floor area of an existing building, work that will result in the removal of one or more floors of an existing structure, or horizontal or vertical enlargement affecting the exterior envelope of an existing building, will require a minimum of $5 million and a maximum of $25 million dollars of liability insurance depending on the height and number of stories of the proposed construction.

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