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Construction Insurance

Owner-Developers who have a tower crane on their project site will have the obligation of procuring Eighty Million ($80M) Dollars in project specific general liability (GL) insurance, regardless of the project's scope of work. The regulation is silent on whether such GL insurance must be obtained wholly by the crane contractor, construction manager or owner or can be achieved by combining or aggregating these entities coverages. Until the DOB offers further guidance, we are advising Owners that they ultimately are responsible for showing the DOB that the project is in compliance with the new GL insurance obligations, and that it may be met by aggregating project specific coverages.

Separately, the new minimum GL insurance requirements for obtaining foundation, demolition and/or new building or major alteration permits is determined based on: (i) the proposed height of the new construction project, and (ii) the tallest adjacent building to the project site. What is meant by the tallest "adjacent" building is unclear as the New York City Building Code uses the terms "adjacent" and "adjoining" interchangeably, particularly as it relates to the protection of the buildings that surround a project site. In some instances, such as excavation protections and underpinning, protection is typically limited to properties that share a lot line with the site to be developed. In others, where the height of the new building or swing of a tower crane expand the radius of required protection, properties beyond those that share a common property line with the site to be developed may be protected. Until the DOB offers further guidance on what it deems an "adjacent" building for purposes of these insurance requirements, we are advising Owners to be cautious and determine their project GL insurance requirements based on the height of the tallest surrounding building to their project site.

These new requirements go into effect on June 13, 2011, and proof of compliance will be required when pulling a permit at that time. Please click here for the official announcement from the DOB.

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