1. New York Labor Law: What You Need to Know Subcontractors, Building Service Providers & Vendors Commercial Insurance Our risk control service is advisory only. We assume no responsibility for management or control of customer safety activities nor for implementation of recommended corrective measures. This presentation is based on information supplied by the customer and observations of conditions and practices at the time of the visit. We have not tried to identify all hazards. We do not warrant that requirements of any federal, state, or local law, regulation or ordinance have or have not been met. This report does not create coverage. Only your policy or contract provides coverage subject to its terms, conditions, and exclusions.

2. Liberty Mutual Insurance 2 Disclaimer  This presentation is an introduction and overview to the subject.  It is NOT legal advice.  Any liability risk strategy involves legal matters which can be intricate: –Subject to statute, case law, interpretation –Subject to jurisdictional variation  Consult with competent legal counsel and your insurance agent before acting on this information.

3. Liberty Mutual Insurance 3 Overview  How NYLL impacts your business  Introduction to the New York Labor Laws –NYLL 240(1) – The “Scaffold” or “Gravity” Law –NYLL 241(6) –NYLL 200  Risk Reduction Strategies –Prevention –Transfer of risk financing –Management Practices Critical to Defense  Tools and References  Discussions/ Questions

4. Liberty Mutual Insurance 4 How NYLL Impacts Your Business  An injured “worker”, either a sub-tier contractor’s or your own…  Can sue a “property owner, manager or their agent” (often the General Contractor)  For damages beyond what workers’ compensation allows: –Pain and suffering –Emotional distress –Loss of consortium –Etc.

5. Liberty Mutual Insurance 5 How NYLL Impacts Your Business  The property owner, manager and GC are likely indemnified by YOUR COMPANY  Injured worker’s WC Insurance Carrier recovers via lien or direct legal action  YOUR Company’s CGL Insurance Carrier can be obligated to pays ALL, pursuant to NYLL

6. Liberty Mutual Insurance 6 How NYLL Impacts Your Business  Damage awards can be significant: $18,334,226 - Carpenter alleged spine, ankle injuries from 15-foot fall. $13,000,000 - Makeshift scaffold's failure had paralyzing result. $12,561,772 - Laborer hit by falling piece of scaffold. $4,000,000 - Worker hit and injured by slab that fell off of forklift. $1,150,000 - Modified saw caused facial laceration. $1,100,000 - Drilling accident left worker blind in one eye.

7. Liberty Mutual Insurance 7 New York State Labor Laws  Part of the Consolidated Laws of New York State  A collection of almost 100 statutes passed by the NYS legislature  Govern many aspects of business in the state: –Taxes –Traffic –Liquor sales

8. Liberty Mutual Insurance 8 Specific Articles of Concern

9. Liberty Mutual Insurance 9 Article 10 Section 240(1) Imposes strict liability on a property owner when there is an injury on site due to construction, renovation, or other defined activity involving a fall from elevation or an object falling from above (gravity related incidents). Section 241(6) Injury due to a specific code violation Article 7 Section 200 Injury to a worker due to the negligence of the property owner, manager or their agent in retained control over the work. New York Labor Law: Sections 200, 241(1) and 241(6)

10. Liberty Mutual Insurance 10 NYLL Section 240(1)  NYLL 240(1) = “Scaffold Law”.  Burdened Parties: Property owners, managers and their agents  Applicability: All “workers” performing erection, demolition, repairing, altering, painting, cleaning or pointing of a building or structure  Duty: Protect workers from gravity related falls or being struck by falling objects

11. Liberty Mutual Insurance 11 NYLL Section 240(1)  Liability triggers: –Not affording “proper” protection –Protection afforded was defective or failed  Limited defenses –Recalcitrant Worker –Sole Proximate Cause  If liability is determined, injured worker’s negligence does not reduce damage award

12. Liberty Mutual Insurance 12 NYLL Section 241(6)  Burdened parties: Property owners, managers and their agents  Applicability: All “workers” performing construction, demolition, excavation  Duty: Provide “reasonable and adequate protection and safety”  Injured worker’s negligence can reduce damage award

13. Liberty Mutual Insurance 13 NYLL Section 241(6)  Liability triggered by violation of certain NY State Code Rules the courts deem “specific” enough to constitute statutory violation: –12 NYCRR Part 23 PROTECTION IN CONSTRUCTION, DEMOLITION AND EXCAVATION OPERATIONS  Examples: –Inadequate personal protective equipment –Insufficient illumination. –Tripping hazards in walkways –Faulty power equipment –Unguarded floor openings

14. Liberty Mutual Insurance 14 NYLL Section 200  Burdened parties: All commercial enterprises in NY  Applicability: All “workers”, regardless of direct employer  Duty: Provide “reasonable and adequate protection”  Injured worker’s culpability can reduce damage award

15. Liberty Mutual Insurance 15 NYLL Section 200  Liability is triggered by hirer’s negligence in retained control over “means and methods” - “how” the work in performed  Examples of hirer’s negligence in retained control: –Hiring party created the dangerous condition –Hiring party had actual or constructive notice of a dangerous condition –Hiring party retained control over the work being performed, was aware of a dangerous condition, and failed to abate

16. Liberty Mutual Insurance 16 Risk Reduction Strategies Prevention Transfer of Risk Financing Management Practices Critical to Defense

17. Liberty Mutual Insurance 17 Prevention  Plan and design work to decrease work at heights –Consider construction and maintenance in design –Prefab rather than build in place  Hire sub-tier contractors with demonstrated safety competence and low injury experience  Establish strict safety performance standards for work at heights and falling object hazards –Consistent expectations for both employees and sub-tier contractors: Alternatives to ladders Protection of elevated work surfaces Personal Fall Arrest System use on unprotected elevations Meticulous housekeeping

18. Liberty Mutual Insurance 18 Transfer of Risk Financing  Retain or develop in-house expertise in NYLL, contractual liability and insurance.  Design and institute an effective contracts management process – understand your risk financing obligations  Understand and communicate limitations of your own insurance coverage.  Limit risk financing obligations to your own operations and negligence.

19. Liberty Mutual Insurance 19 Transfer of Risk Financing  Pre-qualify sub-tier contractors  Consistently assert standard contracts with effective risk transfer and insurance provisions with sub-tier contractors. –Confirm risk transfer and insurance demands on sub-tier contractors were satisfied; No paperwork = No work = No pay!!! –Monitor insurance renewals to ensure continuity of protection –Meticulous recordkeeping

20. Liberty Mutual Insurance 20 Management Practices Critical to Defense  Monitor sub-tier contractor conformance to contract specifications  Stop work for non-conformance  Avoid retaining control over the sub-tier contractor’s “means and methods”  In Contract: –Assign accountability for site safety to the sub-tier contractor –Reserve right to inspect and stop the work for non-conformance with contract terms –Establish performance-based safety expectations (i.e. compliance with “All Laws”) –Frame “safety process” expectations

21. Liberty Mutual Insurance 21 Management Practices Critical to Defense  Utilize a sound “safety process” and require the same of sub- tier contractors: –Designate someone with responsibility for site safety –Coordinate site safety, security, emergency preparedness, etc. –Educate supervisory staff in NYLL liabilities and controls –Craft and implement written Safe Work Plans (SWPs) –Document worker training in SWPs –Perform routine site safety inspections –Document worker safety violations –Perform NYLL protective investigations –“Injury Free” daily worker sign-off

22. Liberty Mutual Insurance 22 Helpful Tools  Safe Work Plan (SWP) Template and Example  Work Site Inspection Log and Example  Worker Safety Citation Template  Stop Work Order Template

23. Liberty Mutual Insurance 23 Related References  RC 6504 NYLL: Subcontractors, Building Service Providers & Vendors  RC 5349 - Contractual Liability  RC 5603 - Guidelines for Vendor/Contractor/Concessionaire Authorization  RC 5800 - Contract Manager Risk Transfer Audit  RC 5608- General Liability Incident Response Kit  RC 5607 - General Liability Risk Improvement Tool for Construction Operations  RC 943 - Scaffolds and Work Platforms  RC 858 - Portable Ladders  RC 868 - Ladders  RC946 - Contracting Work Performed on Company Premises - A Guide for Contractors

24. Liberty Mutual Insurance 24 Open Discussion and Questions