What's happening
This bill voids construction contract requirements for additional insured coverage that would indemnify parties for their own negligence.
Why it matters
Limits liability shifting via insurance. The bill closes a loophole where construction contracts could require “additional insured” coverage that forces one party’s insurer to cover another party’s own negligence, making sure parties remain responsible for their own mistakes.
Protects subcontractors and smaller firms. Contractors and subcontractors are often required to buy extra insurance for the benefit of larger firms or property owners; this bill prevents them from being forced to insure against risks outside their control, potentially lowering their insurance costs.
Aligns insurance with public policy. By voiding contract terms that require insurance coverage for another party’s own negligence, the bill ensures insurance contracts match New York’s public policy against indemnification for a party’s sole negligence, promoting fairness and clarity.
Applies prospectively. The new rules only affect contracts entered into after the law takes effect, so existing agreements remain unchanged, providing certainty for current projects while changing future contracting practices.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Ban Extra Insurance in Construction
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to judiciary
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban Extra Insurance Clauses
In Assembly Committee · Judiciary · Sponsor Michael Cusick
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2393
2019-2020 Regular Sessions
IN SENATE
January 24, 2019
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary
AN ACT to amend the general obligations law, in relation to the invalidity of additional insurance provisions
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 5-322.1 of the general obligations law, as amended by chapter 67 of the laws of 1993, is amended to read as follows:
1. A covenant, promise, agreement or understanding in, or in connection with or collateral to a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenances and appliances including moving, demolition and excavating connected therewith, purporting to indemnify or hold harmless the promisee against liability for damage arising out of bodily injury to persons or damage to property contributed to, caused by or resulting from the negligence of the promisee, his agents or employees, or indemnitee, whether such negligence be in whole or in part, is against public policy and is void and unenforceable; provided that this section shall not affect the validity of any insurance contract, workers' compensation agreement or other agreement issued by an admitted insurer; provided further, that a provision in a construction contract that requires the purchase of additional insured coverage, or any coverage endorsement, or provision within an insurance policy providing additional insured coverage, is void and unenforceable to the extent that it requires coverage, the scope of which is prohibited under this subdivision. This subdivision shall not preclude a promisee requiring indemnification for damages arising out of bodily injury to persons or damage to property caused by or resulting from the negligence of a party other than the promisee, whether or not the promisor is partially negligent.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00018-01-9
S. 2393 2
§ 2. This act shall take effect on the thirtieth day after it shall have become a law and shall apply only to any covenants, promises, agreements or understandings in, or in connection with or collateral to a contract or agreement entered into on or after such date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general obligations law, in relation to the invalid- ity of additional insurance provisions
Purpose or general idea of bill
This bill would hold invalid any provision in a construction contract that requires the purchase of additional insured coverage the scope of which is prohibited under general obligations law section 5-322.1.
Summary of provisions
Section 1 - Section 5-322.1 of the general obligations law declares void and unenforceable indemnification clauses in construction contracts where the indemnitee required the indemnitor to indemnify him for damages due in whole or in part to the indemnitee's negligence. Indemni- tees have circumvented this prohibition by requiring the indemnitee to provide the indemnitor with additional insured coverage. This bill would correct this unfair practice.
Section 2: Establishes the effective date.
Justification
The New York State Legislature enacted 5-322.1 of the general obli- gations law to declare 'broad form' hold harmless provisions in construction contracts void and unenforceable. Additional insured provisions in construction contracts flies in the face of this prohibi- tion and allows indemnitees to circumvent the law. This bill would correct this inequity. Similar legislation has recently been enacted in the State of Texas.
Prior legislative history
2017-2018: A.5329 - Referred to Judiciary/ S.5239 - REFERRED TO JUDICI- ARY 2015-2016: A.4259 - Died in Judiciary/S.2925 Passed Senate; 2013-2014: A.8747-A - Died on 3rd Rdg./S.6606-A - Passed Senate.
Fiscal implications for state and local governments
None to the State.
Effective date
This act shall take effect on the thirtieth day after it shall have become a law and shall apply only to any covenants, promises, agreements or understandings in, or in connection with or collateral to a contract or agreement entered into on or after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.