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7 Important Differences Between FMLA and the Paid Family Leave Act

7 Important Differences Between FMLA and the Paid Family Leave Act

For those of you who do not know, starting in 2018, New York state is introducing the Paid Family Leave Act (PFL). New York’s Paid Family Leave program provides wage replacement to employees to help them bond with a child, care for a close relative with a serious health condition, or help relieve family pressures when someone is called to active military service. Employees are also guaranteed to be able to return to their job and continue their health insurance. If you contribute to the cost of employee health insurance, you must continue to pay your portion of the premium while they are out on Paid Family Leave.

FMLA, or The Family Medical Leave Act, has been in effect since 1993 when it was enacted to provide 12 weeks of unpaid job protections for eligible employees at covered employers.


While both PFL and FMLA are designed to protect the family members of an employee, they do have key differences:  

1. Federal vs. State:

FMLA is a federal program where PFL is a state program. All businesses with 50 more employees across the United States must abide by the laws of FMLA. PFL however is a state mandated program and although it has been implemented in other states, it will begin in New York starting in January of 2018.


2. Benefits Comparison:

FMLA is an unpaid benefit, which means no monetary benefit is provided to employees who participate. PFL is a paid benefit, which will start out by providing 50% of an employee’s income capped at New York’s average weekly wage which is currently $1,305.92. By 2021 PF will cover up to 67% of an employee’s income. Payment for PFL comes from employee payroll deductions.


3. Job Protection:

Both FMLA and PFL provide job protection for eligible employees.


4. Time off:

FMLA provides employees with a maximum of 12 weeks off in increments of as little as 15 minutes. This means an employee can miss 15 minutes of work at a time for an FMLA-related event.

PFL will initially be capped at 8 weeks of time off and will increase to a maximum of 12 weeks by 2021. Time off with PFL may be used in 1-day increments.


5. Eligibility:

FMLA applies to employees who work for a company employing 50 or more employees. In order to be eligible for FMLA, an employee must work for the same employer for a minimum of 12 uninterrupted months, or 1,250 hours in the months prior to FMLA event.

PFL applies to all business in New York and other states where PFL has been applied. Any and all New York State companies employing 1 or more employees are required to participate in the PFL. To be eligible an employee must work a minimum of 20+ hours per week for a minimum of 26 consecutive weeks. If an employee is working less than 20 hours per week, they must have been working for their employer for 175 days or more to be eligible.

*Note: If an employee is eligible for both FMLA and PFL the benefits they receive will run concurrently. This means an employee cannot combine FMLA and PFL time to extend the duration of the leave.


6. Qualifying Events:

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For the most part, FMLA and PFL cover the same life events. These events include bonding and caring for a newborn child, caring for a sick family member, and adjusting for a family member’s military deployment.

One major difference between FMLA and PFL is that PFL will not cover an employee who is absent from work because they need to care for themselves and a personal injury or illness they endure. FMLA will cover an employee if they personally become sick or injured.


7. Vacation & Sick Days:

Vacation and sick time benefits are left at the employer’s discretion, however all employees must be treated equally under the governing decisions of the employer. Under FMLA, an employer can force an employee to use their sick or vacation days while they are on leave. Under PFL, an employer cannot require an employee to use their sick or vacation days during leave.


THE SKYLINE DIFFERENCE

Other brokerages take a cookie cutter approach to insurance and outfit their customers with generic coverage.  Skyline is different.  We believe insurance should be built on innovation and experience. We appreciate the fact that every engagement is unique and understand proper coverage requires a deep understanding of the underlying business and individual.

"The opportunity to safeguard your concerns is a privilege we never take for granted."

New York’s New Paid Family Leave

New York’s New Paid Family Leave

New York is Making History:

In 2016, Governor Cuomo signed a new law, which will take effect in a few short months, creating the strongest and most comprehensive paid family leave act in the country.

The act will take effect on January 1, 2018 allowing New York residents to take paid leave to bond with a new child, adopted or born into a family, take care of a family member with urgent health concerns, and even take the needed time to adjust when a family member is called to active military service. No other state in the country offers such a comprehensive policy that protects job security, medical benefits coverage and paid family leave as well.


The Details

New York’s Paid Family Leave will now provide a fair wage replacement for an individual who qualifies according to specific stipulations. Employers have to guarantee an employee's position will be available when the individual is able to return and their health insurance will continue throughout, as long as the employee continues to pay his or her portion of the health insurance as if he or she were receiving a standard paycheck from the company.

The first year of the plan will allow for a qualifying individual to receive 8 weeks off and 50% of their salary during their paid time off. In 2019, this number increases to 10 weeks and 55%. In 2020, the numbers will increase to 60%. Finally, in 2021, the numbers increase to 12 weeks and 67%.

However, in all of these circumstances, you may not take home more than the maximum percentage of the NY State Average Weekly Wage. This time off can be used in consecutive weeks or spread out throughout a 52 week period. This coverage will be fully-funded by employee payroll deductions and included in the business's statutory disability coverage.


How This Will Effect Employers:

All employers are required to participate in the New York Paid Family Leave program. Upon the renewal of a business's statutory disability benefit, employers will be automatically billed for the New York Paid Family Leave program. Employers have the option to pay for these costs themselves, or they can issue a deduction from their employee's gross incomes. If an employer elects to delegate payment to its employees, the deduction will appear on the employee's pay-stub, which will look similar to a tax deduction. 

Draft regulations state an employee who is provided health insurance by his or her employer is entitled to the continuation of that group health insurance coverage during Paid Family Leave on the same terms as if he or she had continued to work. Employees must continue to make their regular contributions to the cost of their health insurance premium. 


Employee Eligibility:

Anyone who is a full or part-time private employee in New York State may be eligible for this coverage if they have been employed for at least 26 weeks or 175 days, if part-time. Participation in the program is mandatory, and therefore, it is advised to utilze it when eligible. The bad news is public employees may not be covered by this program unless their employers opt into the program or the union negotiates that it is part of the contract. Unfortunately, this does not apply to any prenatal issues and is only available after the birth or adoption of the child.

Once the basic measure of eligibility is determined, you must determine if your situation makes you eligible to use the benefit. The first thought everyone considered in this situation is maternity and paternity leave. Under this benefit, you may take up to 8 weeks in 2018 and 12 weeks by 2021 to bond with your newly born, fostered or adopted child. This applies to both mothers and fathers.


THE SKYLINE DIFFERENCE

Other brokerages take a cookie cutter approach to insurance and outfit their customers with generic coverage.  Skyline is different.  We believe insurance should be built on innovation and experience. We appreciate the fact that every engagement is unique and understand proper coverage requires a deep understanding of the underlying business and individual.

"The opportunity to safeguard your concerns is a privilege we never take for granted."
 
 

Issues in Contractual Privity

Issues in Contractual Privity

Legal issues regarding contractual privity have been occurring around the country, many with conflicting results. This issue primarily affects the construction industry, where insurance policies from the parent company or contractor is filtered down through other third party contractors and subcontractors.

Solving this insurance problem would make it financially safer not only for construction companies, but for the people who work as part of the construction industry. Every part is important to one another, and subcontractors are an integral part of the construction industry. Resolving the issue of contractual privity would make it easier to know what is covered by an insurance policy and what is not.


Explaining blanket additional insurance

When a general contractor or a project owner has insurance for a particular project, they are often able to transfer that insurance to include the people and companies they hire to work on that project. The transfer of insurance comes with the obligation to purchase additional insurance and a contractual risk transfer.

This insurance is known as blanket additional insured endorsements. This kind of insurance is triggered by a written contract that outlines the required additional insurance, as well as a loss that is connected to the person or company who holds the original insurance policy. This becomes very important when a company or subcontractors are trying to decide if the original insurance policy is enough, or if all parties need to be insured by the original policy or blanket insurance additions.

In construction, it can be helpful to have direct contractual contact between two companies to ensure insurance coverage for all involved. In this kind of agreement, general contractors or subcontractors under a parent company may be required to name that owner or parent company on their general liability policies. Without a direct contract between the two parties, it may be difficult to decide if the insurance policy will cover the owner or parent company in case there is an issue.


Legal Ramifications

Cases regarding contractual privity have been ongoing in Connecticut, Maine, and Texas. These cases found that contractual privity (that is, the agreement between two entities) is not required for additional insured endorsements.

The first case in Connecticut, known as First Mercury Insurance versus Shawmut Woodworking, was decided in favor of Shawmut Woodworking. An accident occurred with a subcontractor working under a company working under Shawmut Woodworking. Shawmut Woodworking had taken out additional insurance endorsements with First Mercury Insurance, under the contractual policy that “any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy.…"

This statement was taken as evidence that a direct contract between Shawmut Woodworking and the two subcontracting companies was not needed.

The case in Maine involved Pro Con, Incorporated, and Interstate Fire and Casualty. Pro Con was doing a project at Bowdoin College and there was a contract required between Pro Con, Bowdoin, and a subcontractor of Pro Con called Canatal. Canatal then hired another subcontractor that was also required to name Pro Con, Bowdoin, and Canatal as additional insureds on their general liability policy.

In the court case, Pro Con was sued by a subcontracted employee. The details of the blanket endorsement didn’t specify that there needed to be a written contract between all the subcontracting companies, but rather that there just needed to be a general written contract.

Opposing legal action

Other legal cases around the country have found that contractual privity is required, putting into question the impacts of differing legal systems between the states. The laws regarding contractual privity are constantly evolving, but remain incredibly important for companies that work in the construction industry.


 

THE SKYLINE DIFFERENCE

 

Other brokerages take a cookie cutter approach to insurance and outfit their customers with generic coverage.  Skyline is different.  We believe insurance should be built on innovation and experience. We appreciate the fact that every engagement is unique and understand proper coverage requires a deep understanding of the underlying business and individual.

"The opportunity to safeguard your concerns is a privilege we never take for granted."
 
 
 

Health Insurance Relief for NY Business

Health Insurance Relief for NY Business

Finally some good news for New York business owners actively insured in the small group commercial health insurance market. Effective April 1, 2017, businesses with 1-99 employees will now have 7 health insurance carriers to choose from, which is almost double what the market offered in 2016. In January of 2017, New York welcomed Empire Blue Cross Blue Shield, which was the first of three new carriers to enter New York’s commercial health insurance market. Just recently, both Healthfirst and Oscar health insurance companies also announced that they will be participating in New York’s commercial health insurance market beginning on April 1, 2017. Here is what you’ll need to know about these two new carriers: 

Healthfirst:

Healthfirst is a not-for-profit managed care organization sponsored by several prestigious and nationally recognized hospitals and medical centers in New York. Currently, Healthfirst is a major player in the New York individual market offering Medicaid, Medicare Advantage, Child Health Plus, and Managed Long Term care plans for more than 1.2 million members in downstate New York.
Healthfirst’s history in New York indicates a strong track record and has analysts optimistic regarding the carrier’s decision to join the New York commercial health insurance market.
Fun Fact: Healthfirst plans are the only plans in the NY small group market offering dental insurance as additional insurance for no extra cost. When you buy your health plan it comes with a complimentary dental plan at no cost.

Oscar:

Similar to Healthfirst, Oscar has made their reputation in New York’s individual health insurance market. Know for its cutting edge technology, Oscar appeals mainly to a millennial business demographic, keen on simplicity and innovation. Oscar has made an emphasis on enhancing the member’s experience and has created a mobile application allowing users to:

  • Search for symptoms, providers, and drugs
  • Use Doctors on Call to talk with a doctor over the phone at anytime
  • View you Oscar health history
  • Send questions to Oscar’s customer care team
  • Access your digital ID card
 

The Oscar mobile application also rewards members:

  • Track your steps and earn rewards for just hitting daily goals and staying active.
  • By connection to Apple’s Health App, you can see all your steps tracked by your phone and compatible step tracking devices, and get rewarded for your hard work.

Customer Reviews: “Tracks my steps to earn Amazon rewards, links to my watch’s app and account for the steps my watch records.”


Both of these carriers will be available effective April 1st, 2017. It is okay to switch carriers during your plan year. If you are currently insured you do not have to wait until your renewal to change carriers. If you have questions and/or would like to see if these rates and plan designs work for your business please contact Skyline Risk Management, Inc. at (718) 267-6600 for consultation.  

If you have questions and/or would like to see if these rates and plan designs work for your business please contact Skyline Risk Management, Inc. at (718) 267-6600 for consultation.  

Understanding Flood Insurance in 2017

Understanding Flood Insurance in 2017

After flying through the House, many believed the Flood Insurance Market Parity and Modernization Act would zip through the Senate, too. The Act was thought to become law sooner than later. However, things didn't go as smoothly as planned in the Senate.

The National Association of Professional Surplus Lines Offices (NAPSLO) and their officials continue to work to get the bill through the Senate. They continue to work to get this Act into law.


Understanding the Act

Why is the Flood Insurance Market Parity and Modernization Act of such importance for NAPSLO? For a variety of reasons, but one seems to stand out: the bill clarifies the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12).

The new Act defines the ability of privately issue flood insurance when meeting a lenders' purchasing requirements. Initially, the Act required lenders to accept private flood insurance for mandatory purchase. Then language was added before the bill was passed that created confusion. Lenders who were evaluating policies for the purpose of complying with mandatory flood insurance requirements became confused.

Now, the Flood Insurance and Market Parity and Modernization Act clearly defines a private flood insurance policy as:

"A policy issued by a company licensed, admitted or otherwise approved by the state."

According to Brady Kelly, the Executive Director of the NAPSLO, the bill strives to clarify a number of items, including the surplus lines market:

"All we're doing in this legislation is clarifying that the Surplus Lines market is, in fact, an eligible market from which to accept a private Flood insurance policy. I say that because Surplus Lines insurers have long written Flood insurance policies — this isn't a new opportunity.

Before BW-12 was signed, our market has always served as a supplement to the NFIP There are a number of homes and commercial properties that don't fit within the terms and conditions of the NFIP policy.

So we've oftentimes served as an excess option, or an option when the NFIP policy doesn't do the trick. From that perspective, the primary goal is to preserve the types of solutions the market was already providing."


No Smooth Sailing

While the bill is hung up at the Senate now, the House was no issue. In April of last year, the Flood Insurance Market Parity and Modernization Act flew through the House with a vote of 419-0.

While the victory seemed like smooth sailing, many have noted the result stemmed from a lot of hard work. The NAPSLO began educating legislators on the bill and the surplus lines marketplace at the start of 2014. These efforts were in preparation for the day the bill reached the House.

According to NAPSLO higher-up Keri Kish, the surplus line marketplace is:

 "It's not something everyone just knows about and understands. Our education really helped them understand how the Surplus Lines market functions as part of the private insurance market — how we developed and why it's important to maintain our ability to provide those options."

Luckily, many believe the failure in the Senate was more due to timing than legitimate concern over surplus lines. The election took a lot of time and energy for those in Washington. Many Senators were in heated state races and didn't have time or concern to hear about flooding.

Once the elections have passed, many surmise the bill will get more focus in the Senate. Not only will the election be over, but increased interest in flood issue will be coming up next year, as the National Flood Insurance Program is being reauthorized.


Optimism in 2017

Many NAPSLO members are excited and optimistic about the idea of the bill passing the Senate in 2017. Kish certainly is:

"I'm confident it will pass this year. There's no reason not to do it now. Ultimately, this is giving consumers choices. I can see no policy concerns in passing it this year."

While optimism is good, we'll have to wait and see if the bill goes through. If issues arise, the potential impact on the surplus line marketplace will certainly be noticed. The bill needs to be passed if the private market is to be a viable alternative to the NFIP.


Trends for 2017: Workers' Comp Edition

Trends for 2017: Workers' Comp Edition

Some brokers struggle to help clients these days. It's not easy. Rising health care costs seem to be an inevitable part of doing business today. While the skyrocketing costs cannot be ignored, there are ways to decrease risk and manage premiums in the wide world of workers' comp.


Workers' Comp Trends in 2017

As we enter 2017, changes and trends in the workers' comp world are coming. Brokers may have niche opportunities to help businesses and clients by keeping workers' comp costs in line.

Here are six workers' comp trends to pay attention to:

1. Rising Premiums

High claims typically lead to high premiums. This is the insurance industry in a nutshell. That's the bad news, but it gets worse. Certain insurance companies have seen more claims, longer breaks from work, and higher dollar amounts being claimed. That's a recipe for high premiums. And many predict these premiums will continue to go up due to increasing costs for prescription drugs and an aging workforce. If change is to happen quickly, most brokers note it'll come from within an organization – not to the system.


2. Bad Management

One way companies may control workers' comp costs is through better management of pharmaceutical benefits. Opioid use has continued to rise in the United States. As such, many employers require workers' comp claims using opioids to have a weaning off strategy at the start. Another way to manage benefits is limiting where employees can get pharmaceuticals. Getting drugs from the physician's office typically costs more than at an off-site pharmacy.


3. Plentiful Partnerships

Certain workers' comp programs have developed relationships with facilities that specialize in work-related injuries specific to their industry. While requiring workers' comp claimants to choose a particular occupational medicine clinic is barred, a recommendation is legal. Brokers can help make an introduction in these scenarios.


4. More Technology

Innovations in the medical field incorporate technology to give patients options. Telemedicine is one such trend. Instead of visiting a doctor's office, a patient can call in on a smartphone or iPad at any time during the day or night. This is especially useful for people who work nights and mornings. Other programs have incorporated a hotline that connects injured employees to a health care professional immediately.


5. Cultural Focus

A culture of getting back to work is essential to ensure the success of a workers' comp program. Employees who want to get healthy and get back to work can save a company a lot of money. One way to potentially get employees back faster is through support. Most companies don't contact employees while they're off on a workers' comp claim. A phone call or card from a supervisor could help an employee recover mentally and physically.

Many were surprised to learn that over 80% of a workers' comp program costs go towards 5% of the claims. This means employees away from the job for a long time eat up more costs than anything else. Getting these people back on the job on schedule can be significant for workers' comp programs.


6. Keep Things Safe

While workers' comp programs are in place for a reason, the easiest way to potentially control costs is through a safety program at the workplace. Many have found the costs of incorporating more safety programs and measures to be minimal compared to the cost of workers' comp when an employee gets injured.

Certain companies have found a large financial incentive to focusing on safety and doing things the correct way. A broker can play a significant role in helping companies manage workers' comp costs by focusing on safety. 


For more information regarding workers compensation contact Skyline Risk Management, Inc. at (718) 267-6600. 

It Finally Happened! 421-A Gets Extended

It Finally Happened! 421-A Gets Extended

It took months upon months. There was a lot of hand-wringing. Developers threatend to stop a number of multifamily developments if there was no tax abatement in place.

Luckily, that disaster was avoided. Finally, the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York came to an agreement. The extension of the lapsed 421-A program that offers tax exemption has been extended.


What It Means?

So what was all the fuss about? The 421-A extension means that eligible buildings in Manhattan must pay an average hourly wage of at least $60 – including all wages and benefits. Other buildings in Queens and Brooklyn are required to pay at least $45 per hour when all wages and benefits are taken into account.

The 421-A extension obligations only apply to buildings in certain areas that meet specific criteria. Only buildings in Manhattan south of 96th street qualify. In Brooklyn and Queens, only buildings in Community Boards 1 and 2 around one mile from the closest waterfront bulkhead qualify.

As well, only buildings with over 300 rental units are obligated to the pay stipulations. Buildings that have 50% or more of affordable housing units are also excluded from the obligations in 421-A.

If a project began before the effective date of the new 421-A agreement, then the project can choose to opt-in to the program if they want to. Of course, these projects must meet eligibility criteria, too.


Understanding the Benefits of 421-A

While the details are important, the reasoning behind the agreement shouldn't be overlooked. Many important people are thrilled with the agreement, especially regarding benefits for low-income New Yorkers. Governor Andrew Cuomo is one of them:

"The deal reached today between these parties provides more affordability for tenants and fairer wages for workers than under the original proposal. While I would prefer even more affordability in the 421-a program, this agreement marks a major step forward for New Yorkers.

The agreement extends affordability for projects created with 421-a for an additional five years–bringing affordability for these units to 40 years. It also allows lower-income individuals to qualify as it lowers the percentage of area median income needed to apply.

Additionally, this agreement rightly delivers fair wages for working men and women – providing a rate of $60 per hour in Manhattan and $45 for certain projects in Brooklyn and Queens. Most importantly until this agreement is finalized, the State Legislature has refused to release $2 billion in state affordable housing funds. I urge the Legislature to come back to Albany to pass desperately needed affordable housing and to sign the MOU to release these funds. We simply cannot allow the lack of resolution to stall affordable housing production for years to come. There is no excuse not to act."


More Info on 421-A

Governor Andrew Cuomo is excited about 421-A for a number of reasons, including:

1. Traditional Worker Standards: Many applaud the amendment for continuing to give construction workers the rights they deserve in New York City. The standards and benefits provided in 421-A go a long way towards keeping workers taken care of.

2. Affordable Housing: The 421-A amendment allows for the development of affordable housing for low-income individuals. This is critical in a city like New York City, which features some of the most expensive housing costs in the world. The 421-A program allows buildings complying with the regulations to stay in the program for 35 years with a property tax exemption. This incentive should keep units with income limitations in the program.


Finally Done!

Overall, the passing of 421-A is set to benefit a number of New Yorkers. The amendment ensures quality wages and benefits for construction workers. It also ensures affordable housing units are created in some of New York's most popular neighborhoods and areas. 

For more information about NYC insurance laws contact Skyline Risk Management, Inc. at (718) 267-6600.

Diving into the Dynamic Behind Self-Funding and Voluntary Benefits

Diving into the Dynamic Behind Self-Funding and Voluntary Benefits

Employers have changed how they view health care plans. With all the reforms and high costs, companies struggle to cope with the ever-changing landscape. Employers create benefit plans with employee retention and cost control on their minds. However, many forget about a little helper called voluntary benefits.

Nearly every employer looks to achieve these goals with health care. Offer great benefits to employees without breaking the bank. Many companies achieve this noble goal by using a self funding approach that features a high-deductible. Often, these companies are larger. Recently, smaller companies have taken this approach, too.


The Self-Funding and Voluntary Benefits Dynamic

When paired with voluntary benefits, employers reduce costs greatly while still giving their employees the type of insurance they need. Plus, employees can tailor their coverage with a variety of options.

So why have employers started going the self-funded route? That's simple. Health care costs are rising. By using self-funded services, a company can keep medical expenses down.


What Does Self-Funding Offer?

Self-funding may sound nice in theory, but it's important to understand what self-funding allows employers to do. Overall, an employer can:

1. Control Costs: Self-funding allows employers to control costs, with funding amounts that are pre-determined. This ensures the profit margin of the insurance company is cut down.

2. Protect the Plan: Using stop-loss insurance as an employer can ensure no catastrophic claims exceed the pre-determined amount in their self-funded plan.

3. Only Pay Actual Claims: Instead of paying the margin created by an underwriter, a self-funded plan allows the company only to pay medical claims that actually happen.

4. Keep Track: A self-funded plan ensures an employer can keep track of the plan and accounts. By keeping statistics year after year, an employer can plan for the future management of their self-funded program.

5. Further Savings: Certain self-funded plans save even more money by utilizing a predictive analysis to determine health and wellness. A third-party administrator usually administers this.

Lastly, many companies prefer self-funded plans because they may not be subjected to Obamacare regulations. Since they do not have to follow all the regulations of the Affordable Care Act, the company can tailor plans to the needs of specific employees and groups.


Adding Voluntary Benefits to Self-Funding

Once an employer has a self-funded benefits plan, they can begin to allow voluntary benefits. Voluntary benefits complement the plan and allow employees to meet their every need – without adding unnecessary costs to the plan.

By combining these two options, employers allow their employee the ability to customize the benefits to their unique needs. The benefits of this methodology are vast and allow companies and employees to account for expenses in a detailed manner.


Always Be Communicating

No matter how a company offers health insurance, communication is key. The majority of employees are tired of spending so much money on health care. As well, most have concerns about how the changing health insurance market and reform will impact their families and pocketbooks.

Studies have shown that 95% of employees need an individual to talk to them about benefits information. This means your employees need to speak with an administrator. They want to keep communication lines open when they have questions and want access to resources.

Communication is especially needed when a company offers a self-funded plan with voluntary benefits. The variety of options and costs can be confusing – so being able to communicate with an administrator is key.


A Winning Combination

Employees want great benefits and lower costs. Most companies want similar things in regards to health insurance. As such, many have found self-funded plans combined with a myriad of voluntary benefits options to be a dynamic insurance duo.

For more information about self-funding contact Skyline Risk Management, Inc. at (718) 267-6600. 

New York Labor Law

New York Labor Law

  • What it means for property owners, their agents, managers and commercial tenants.
  • What you need to know to protect your assets.
  • How GNY can help.

New York Labor Law:

New York State’s Labor Law (NYLL) represents an onerous burden for property owners and managing agents in New York, making them financially liable for virtually any work-related accident on their premises. So as building owners and managing agents routinely hire contractors to do work on their properties, they routinely face huge liability exposures.
To insulate themselves from high-value lawsuits brought by injured workers, building owners and managing agents should enter into hold harmless and indemnification agreements, backed up by the contractors’ own insurance, which transfers liability for such injuries from themselves to the contractors and subcontractors whose negligence caused the injuries. Failure to do so can cost building owners millions of dollars.

GNY can help navigate this challenging landscape.


Three Key Sections:

1. Section 200 requires building owners and managing agents to provide workers with safe places to work.

2. Section 241(6) makes building owners strictly and vicariously liable for worker injuries at their buildings if improper or inadequate safety equipment causes a worker’s injury. Damages from resulting lawsuits can be reduced or eliminated if building owners can show that the injured worker was partially or fully responsible for his injuries.

3. Section 240(1), commonly known as the Scaffold Law, makes the building owners as well as their contractors and project managers “absolutely liable” for all gravity-related construction accidents at their buildings, subject to a few hard-to-prove exceptions. The building owner is liable even if it did not hire the injured worker or his employer, even if it did not know that the worker or his employer was working at the building, and even if the worker is partially or fully responsible for his own injuries. These lawsuits often result in summary judgment for the plaintiff on the issue of liability, leaving only the damages portion of the lawsuit to be tried against the building owner and property manager. Because these lawsuits often present serious injuries, verdicts in such cases can be quite high.

  • A good safety record will not protect building owners, managing agents and construction contractors from liability under any of these statutes. In addition, litigation can become a part of your loss history, which may drive up your insurance rates. Don’t let this happen to you.

  • GNY Recommends The Following Steps To Protect Your Business And Assets Under These Statutes: 

1. KNOW YOUR CONTRACTOR:

  • Verify the contractor is properly licensed, insured and experienced in the type of work it is being hired to perform.
  • Verify whether the general contractor uses subcontractors. If the general contractor uses subcontractors, find out how it screens its subcontractors and confirm with your contractors that its subcontractors are properly insured.
  • Verify there are written agreements in place between the building owner and its general contractor, as well as between the general contractor and its subcontractors, with proper indemnification and insurance-procurement clauses. The contractor and subcontractors should name the building owner and the managing agent as additional insureds on their liability policies on a primary and non-contributory basis.
  • Verify before entering into contracts with your contractors that the contracts make the contractors responsible for worksite safety and for having a safety-and-employee training program in place.
  • Verify contractors have obtained all necessary permits before they begin their work.
  • Verify your contractors and their subcontractors do not have a history of Occupational Safety and Health Administration Law violations.

2. USE RISK TRANSFER TACTICS:

Using written contracts to transfer the risk of liability and damages from you to your contractors can protect you from claims of serious injury and potentially large damage awards. The following clauses have proven successful:

  • Hold Harmless and Indemnification Agreements

Every contract between you and your general contractors, as well every contract between your general contractors and their subcontractors, must contain a clause requiring the general contractors and their subcontractors to “defend,” “indemnify,” and “hold harmless” the building owner and the managing agent from liability, loss or other damages that arise because of any of the contractors’ negligence. It is important that this agreement be properly worded, dated and executed before the work begins.

  • Insurance Procurement Requirement

Contractors and their subcontractors must agree to add building owners and their managing agents as additional insureds to their insurance policies for any liability arising out of their work. The limits of these policies should be at least $1 million for a primary commercial general liability (CGL) policy and $5 million for an umbrella policy. Also, the additional insured coverage should be written on a “primary and non-contributory basis.”

  • Insurance Requirements and Certificates of Insurance

While it is common practice to request a Certificate of Insurance (COI) from contractors and subcontractors, the certificate alone does not confer or prove the existence of additional-insured coverage on your behalf. A proven “best practice” is to require your contractors to submit a copy of their primary liability and umbrella policies for review by an insurance professional. All COI’s and insurance policies must be provided to the building owner or managing agent before the work begins. The COI and insurance policies should also show that the building owner and managing agent are named on the primary and umbrella policies as additional insureds.

GNY will review your contracts with your contractor or subcontractors free of charge. Simply ask your broker to forward the contracts and insurance policies to your GNY underwriter.


SPECIAL CONSIDERATIONS FOR ...

 

COMMERCIAL PROPERTY OWNERS:


NYLL’s unfavorable liability provisions can adversely affect the owners of commercial buildings when tenants hire contractors to perform construction, alteration, repair or maintenance in their units, and those tenants are inadequately insured or indemnified by the contractors they hire.

As part of their commercial leases with tenants, building owners should use the same strategies suggested above for the transfer of risk from themselves to their contractors:

  • Obtain copies of the CGL and umbrella policies and COI’s from all commercial tenants and their contractors.
  • Set up a notification system alerting you to renewal dates for these policies.
  • Make sure tenants have sufficient CGL and umbrella policy limits.
  • Require tenants and their contractors to name the building owner and the managing agent as additional insureds on their CGL policies on a primary and non-contributory basis.
  • Require tenants to sign agreements indemnifying and holding the building owner and managing agent harmless for liability arising out any of the tenants’ work in their units.
  • Review your leases with an attorney to ensure these clauses have been included in the leases.

GNY will review the relevant contractual clauses and policy provisions for you free of charge. Simply ask your broker to forward the contracts and insurance policies to your GNY underwriter.


RESIDENTIAL CO-OPS

To protect the board, the shareholders and the co-op corporation, the same risk-transfer strategies mentioned above should be in place whenever a shareholder in a co-op has work done in his unit. This work ought to be done under an Alteration Agreement, which should require the shareholder’s contractors to indemnify and hold harmless the shareholder, the co-op and the managing agent, and to name these entities as additional insureds on the contractors’ general-liability policies on a “primary and non-contributory” basis.

The Alteration Agreement should also require the shareholder to indemnify the co-op and the managing agent and to have proper liability insurance in place to cover these exposures. The co-op must mandate, preferably in the lease agreement, that contractors cannot begin work in a unit until the shareholder submits to the co-op and the co-op approves all of these construction contracts and insurance policies.

Insurance companies insuring contractors have come up with broad exclusions and limitations designed to protect them from having to defend and indemnify you as additional insureds under their policies. This is very unfair to the co-op. By showing you what to look for in these policies, GNY can help protect you and your finances.

GNY will review the relevant contractual clauses and policy provisions for you free of charge. Simply ask your broker to forward the contracts and insurance policies to your GNY underwriter.

GNY can also supply you with an exemplar of an “Alteration Agreement” incorporating these conditions for the co-op, the shareholder and the contractors to sign.

Actual Cash Value (ACV) Vs. Replacement Cost Value (RCV)

Actual Cash Value (ACV) Vs. Replacement Cost Value (RCV)

Buying items is simple. Selling things is a little more difficult, but still fairly straightforward. As long as humans have been around, we’ve been giving value to certain items, whether it be monetarily or otherwise. “How much does it cost?” isn’t that complex of a question – until it is.

So when it pricing complex? Pricing becomes a problem when claims adjusters get involved. Finding a definitive price for an item not on the market, after depreciation, and so forth is an art form. Well, more like a science. So how do claims adjusters find the true or definitive price of an item?


The Basics

Enter actual cash value (ACV) and replacement cost value (RCV). Actual cash value is the cost to replace an item minus depreciation. Replacement cost value is the cost to replace the asset at the full present value.

While these concepts may seem straightforward, things can get complex quickly. Adjusters not only need to decide on the value of an item, but there are also numerous local and state laws that can impact how ACV and RCV are calculated.


Diving Into Differences

Each state tends to handle ACV and RCV a bit differently. For instance, California includes an interesting tidbit in their legislation regarding these issues. In California:

“Actual cash value is the amount it would cost the insured to repair, rebuild, or replace the item lost or injured less a fair and reasonable deduction for physical depreciation based on its condition at the time of the loss.”

While seemingly fair, this leaves pre-loss condition in a tough situation. Many adjusters have found themselves between a rock and a hard place due to this law. Often, it can be difficult to determine what an item actually is – much less its exact condition at the time of the loss.


Unique or Obsolete

Furthering confusing things, an adjuster has to work with obsolete and unique items. Not even item loss will be easily purchased on Amazon.com. No, there will be a variety of items that hold a unique value for the owner. Many of these items will be tough to find pricing for.

 This Honus Wagner baseball card sold for 2.1 Million in 2013

This Honus Wagner baseball card sold for 2.1 Million in 2013

As an adjuster, understanding that one man’s trash could equate to another’s treasure is paramount when dealing with these unique cases. When dealing with these cases, communication is key. The adjuster must work to understand the insured and what he or she places value on. You need to understand the insured and the item before placing a value on it.

When dealing with these items, begin by understanding what exactly the item is, how it was used, and if the insured still values it. Many times, an adjuster will need to dig deep and do some research before giving value to a unique or obsolete item.

If an adjuster is struggling to price an item properly, try:

  • Consulting experts in the field. Look for a certified consultant who can help you give value to a unique, obsolete, or high-priced item. Always verify these individuals’ credentials.
  • Use the Internet. While Internet pricing isn’t the most accurate, you’ll often be able to gather a working knowledge of the item and its value by going online.

Overall, the best way to determine value for an obsolete or unique item is to find a similar item already on the market. Finding a similar kind and like item can ensure fair pricing and valuation for both parties.


Understanding Antiques

Antique items open a whole other bag of worms for adjusters. Not every item that is older is considered a valuable antique. Most items are required to be a certain age and origin to qualify. A minimum of 100 years old is required for an item to be “antique” from an insurance perspective. Adjusters should handle antique items in a similar manner to obsolete and unique items.


Actual Cash Value Vs. Replacement Cost Value

Overall, understanding the actual cash value versus the replacement cost value isn’t that complex. Most homeowners will benefit from RCV more than ACV when an adjuster is looking into their claim. How a state handles these cases and individual policies will go a long way in determining how the claim is calculated.

For more information about Actual Cash Value (ACV) vs. Replacement Cast Value (RCV) contact Skyline Risk Management, Inc. at (718) 267-6600

Additional Insured Coverage Confirmed Limited to Contractual Privity in New York

Additional Insured Coverage Confirmed Limited to Contractual Privity in New York

The New York Supreme Court, Appellate Division, First Department decided that additional insured endorsement only provided additional insured coverage to an entity in direct contractual privity with the named insured. The decision reinforces the New York law, which controls policy language entitlement to added insured coverage.


Why the Confirmation?

The New York Supreme Court was forced to confirm this law due to a recent case. Brought to heed on Sept. 15, 2016, the case involved the Dormitory Authority of New York (DASNY), Gilbane Building Co. /TDX Construction Corp (a joint venture, or JV)., and Sampson Construction Company.

The contract between DASNY and the JV stated that all prime contractors retained by DASNY were to name the construction manager as an additional insured under the liability policies. This was a requirement.

Next, DASNY contracted with Sampson to retain its services as a prime contractor in all foundation and excavation labor. In this contract, Sampson agreed to name the construction manager as an additional insured on its commercial general liability policy. The company then purchases a commercial general liability insurance plan from Liberty Insurance.

The policy Sampson procured from Liberty contained the following information about additional insured endorsements:

WHO IS AN INSURED: (Section II) is amended to include as an insured any person or organization with whom you have agreed to add as an additional insured by written contract, but only with respect to liability arising out of your operations or premises owned by or rented to you.

Moving forward – the work Sampson did on the job site allegedly created property damage to the building adjacent. Thus, DASNY filed suit against Sampson and the architect. Then the architect bought a suit against the JV, too. The JV then sought coverage under the Liberty policy that Sampson procured for the DASNY contract as additional insured.

Liberty denied coverage. So the defendants opened a declaratory judgment action against Liberty. Then Liberty made a play for a summary judgment, claiming that additional summary judgment would require some direct contractual privity with the named insured, Sampson.

The court then denied Liberty’s motion on the basis that the policy only required a written contract in which Sampson is a party. This requirement was satisfied when DASNY and Sampson entered a contract. However, this was overturned on appeal based on the additional insured endorsement.

While the Sampson and DASNY contract was evidence that Sampson agreed to provide coverage, the court ruled that this has no impact on the coverage Liberty agreed to provide them. This opened the door for the JV to pursue Sampson on a breach of contract clause, as a third-party beneficiary.


Nothing Has Changed

The concept that New York courts read closely regarding additional insured endorsements determined whether privity was required is nothing new. The Gilbane Court relied on numerous prior decisions with similar language, including:

AB Green Gansevoort, LLC v. Peter Scalamandre & Sons, Inc., 102 A.D.3d 425, 961 N.Y.S.2d 3 (1st Dep’t 2013) (requiring contractual privity where additional insured endorsement stated that “an organization is added as an additional insured ‘when you and such organization have agreed in writing in a contract or agreement that such organization be added as an additional insured on your policy.’”); Linarello v. City Univ. of New York, 6 A.D.3d 192, 774 N.Y.S.2d 517 (1st Dep’t 2004) (same). See also Zoological Soc. of Buffalo, Inc. v. Carvedrock, LLC, No. 10-CV-35-A, 2014 WL 3748545 (W.D.N.Y. July 29, 2014) (requiring contractual privity where additional insured endorsement afforded coverage to “[a]ny person or organization with whom you have agreed, in a written contract, that such person or organization should be added as an insured on your policy, provided such written contract is fully executed prior to the ‘occurrence’ in which coverage is sought under this policy.”)

The JV and courts attempted to distinguish the language in each policy, but the Gilbane Court clearly stated that privity between named insured and additional insured is required. 

For more information about Additional Insured Coverage, contact Skyline Risk Management, Inc. at (718) 267-6600

Everything You Need to Know About Condominium Associations and Insurance

Everything You Need to Know About Condominium Associations and Insurance

Condominiums are popping up all over the United States – and the world. From high-rise buildings in urban areas to townhomes in the suburbs – it's hard to miss these new development efforts. Typically, every condominium offers a few distinctive features:

Common Areas: Places that all residents use like stairs, elevators, and hallways are jointly owned by the unit owners. Each owner's interest is proportionate to the value of his or her unit.

Dwelling Units: The housing unit that is individually owned by the person who bought it.

Administrative Framework: Often, a condominium has an association. This is usually made up by a board of managers, who typically own a unit. The organization manages the common areas and assets. They also set the rights and obligations of the unit owners.


What Condo Owners Need to Know

With the basics out of the way, it's time to talk about insuring condominiums associations. Here are a few items potential condo owners must understand before buying a condominium and having to work with an association:

1. Responsible Associations:

The condo association is only responsible for insuring the common areas of the complex. The interior of the individual units is the responsibility of the owners. Nearly every state requires the association to have insurance for all common elements and bare walls. When insuring a condominium, you'll be quoting for mostly, “walls –in” coverage; unless your condo’s association’s Master Insurance Policy says otherwise.


2. Important Documents:

Before gathering coverage for a condominium association, you'll need some important documents. These sets of documents offer the information needed to see the scope and full extent of coverage required.

  • The declaration of the condominium, which is subjected to a condominium act.
  • The condominium property act that is in effect in the association's state. This defines the boundaries of coverage and responsibilities.
  • To further understand the scope of coverage, you'll need bylaws and various instruments that clarify what is permitted under the act.

Once you have these documents, you'll find condo coverage becomes a lot easier. It'll be simple to itemize and identify which areas will be covered. Then you'll be able to add limits and subject items to coverage.


3. Personal Property:

Condo associations do not offer coverage for personal property. Common items that condo associations like to cover include:

  • Outdoor furniture
  • Fire extinguishing items
  • Appliances
  • Floor coverings

…And more!


4. Errors & Omissions:

No one is perfect. The board of directions for a condo association is no different. Condo association insurance does not cover errors and omissions of board members in a standard policy. For this reason, most associations choose to purchase Errors & Omissions Liability Insurance.

Certain states require the coverage, but some do not. Other states limit the liability of errors & omissions, but many do not.


5. Safe Volunteers:

The Volunteer Protection Act of 1997 does not cover volunteers within the condo association, as the act does not defend volunteers against lawsuits. The act protects against tort liability stemming from acts of bodily injury and property damage.

When liability for criminal misconduct, gross negligence, flagrant indifference or safety of others is brought to attention, the act does not cover anything. In these situations, general liability insurance often comes in handy.

It's important to note that certain states have opted out of the Volunteer Protection Act and created provisions concerning these issues within their legislation. Often, a state's legislation will limit the personal liability of volunteers within the condo association.

For more information about insuring a condominium association contact Skyline Risk Management, Inc. at (718) 267-6600

5 Ways to Mitigate Risks During Holiday Parties

5 Ways to Mitigate Risks During Holiday Parties

The holidays are here. Thanksgiving, Christmas, New Years and more are some of the best times of the year. They are also some of the most dangerous from an insurance and risk perspective.

See, millions of Americans host family and friends for days and night of joyous celebration during these times. These parties and events often require days upon days of planning, coordination, and more.

Due to the nature of holiday parties, many risks rear their ugly heads during this beautiful time of the year. Many hosts chose to hire vendors to help with the parties and mitigate these risks. This can open a whole other can of worms when your personal liability exposure is taken into account.


5 Ways to Mitigate Risks During Holiday Parties

While thinking about personal liability isn't how to put one in the holiday spirit, there's hope. Here are five easy ways to mitigate risks during holiday parties and limit your exposure:

1. Focus on the Basics

Hosting a large holiday party will require hiring vendors and coordinating the event. However, every single vendor you hire will bring on added risks. To mitigate these risks, you'll need to focus on one fundamental issue. You must make sure every single vendor you work with is bonded, licensed, and insured.

Once you have confirmed these facts, you'll need to understand the details of their insurance coverage. Find out information like:

  • Their carrier
  • Adequate coverage for you event
  • Policy limits
  • References

While you won't be able to talk about a vendor's insurance coverage with a reference, you may get a glimpse into how the vendor responds to a crisis – especially important around the holidays.


2. Get a Contract

Once you found a great vendor to work with, you'll need a signed contract that clearly states the services and functions your selected vendor will provide at the party.

Make sure the contract clearly details dates of services and exact times. Also, it's vital that a contract has a hold harmless clause include. The provision ensures that hosts are not held responsible for damages related to a vendor-related injury or accident.


3. Be Careful with Booze

Holiday parties and booze go hand in hand. “Many a great story” only happened because a holiday party got out of control after the booze started to flow. Still, you need to take a few precautions if you're serving alcohol at your holiday party.

First and foremost – you should only hire a bartending or catering service that insures its staff against any and all booze-related liabilities. This is of the utmost importance.

Next, you need to understand personal liability. It's imperative that you let the bartenders do what they do best – serve drinks. Do not get involved with the pouring of drinks. Bartenders need to card anyone they suspect to be under a certain age during the event. This is the law and will ensure you're not held liable for any underage drinking issues.


4. Pay Attention to Parking

Parking can play a huge role in your holiday party, especially as an event gets larger and larger. Hiring parking attendants or a professional valet service can ensure smooth sailing on the roads during your event. You'll avoid blocking roads, minimize collisions, and ensure the safety of your guests.

As always, you'll need to work with a properly licensed valet company and get a contract in place. Once this is done, you can begin working on a parking plan with the company.


5. Slip & Fall

Finally, you need to pay attention to the weather during your event. With snow, sleet, and ice common in the winter months, you'll need to have a plan in place that gets guests from parking to the party in safety.

To do so - you'll need to prevent slips and falls. Start by removing all ice and snow from any walkway or staircase. Make sure you have salt or sand on hand during the event.

Next, add some additional lighting on walkways to ensure black ice won't sneak up on anyone. Then you'll want to post signage warning guests to pay attention and watch their steps. 

For more information on how to mitigate risk during the holidays contact Skyline Risk Management, Inc. (718) 267-6600

What is Long-term Care Insurance?

What is Long-term Care Insurance?

There are roughly 76 million baby boomers in the United States with an approximate average age of 60 years old. It is no secret, as people age, they may require assistance for activities of daily living. Understanding this concept and considering the large population of aging baby boomers, insurance carriers have created a product to help reduce the costs of long-term care. This product is called long-term care insurance (LTCI) and this article well help educate anyone who is considering purchasing this product. 


What is Long-term Care Insurance (LTCI)?

Long-term Care Insurance (LTCI) is an insurance product, which helps to cover the expenses associated with long-term care beyond a predetermined period of time. People who require long-term care are those who have an inability to preform two or more basic activities of daily living.

Activities of Daily Living (ADL):

1. Mobility - ability to "transfer" your body. For example, a persons ability to walk or get out of bed. 

2. Bathing & Showering - the ability to shower yourself

3. Dressing - the ability to dress yourself

4. Feeding - the ability to feed yourself

5. Personal hygiene - the ability to brush your teeth, comb your hair, and other grooming practices. 

6. Bathroom - the ability to use the bathroom independently. This includes being able to get to the toilet and your ability to get up off the toilet. 

If a person is unable to complete two or more of these activities of daily living (ADL) then they are eligible and would certainly benefit from long-term care. 


Who does Long-term care insurance (LTCI) benefit?

Long-term care insurance has many benefits for various people. A common misconception is that long-term care insurance is a benefit only for the person in which the policy is meant to insure.

This is not the case!

Actually, the family members of the insured are the ones who benefit the most. In many cases, long-term care is expensive so when a loved one is no longer able to perform two or more actives of daily living the responsibility of caring for this person often falls to family members. Depending on their financial situation, some families cannot assume this responsibility and cannot afford to hire professional help. 

By purchasing LTCI a person is not only protecting themselves but also the financial well-being of their loved ones.


What does Long-term care insurance (LTCI) cover?

Long-term care insurance covers certain expenses for those who participate in any of the following care facilities:

  • Home Care - this allows a person who requires help with ADL to receive aid right in their own home.
  • Adult Daycare - this is a non-residential facility, which caters to adults who require help with ADL.
  • Hospice care - this services provides care to support people with advanced or terminal illnesses. 
  • Nursing homes - private institutions, which provide aid for elderly people and/or people who require help with ADL.
  • Assisted Living  - provides housing for elderly people and/or people who require help with ADL.
  • Respite Care  - temporary care for a person who requires aid with ADL.

Does my health insurance and/or medicare cover long-term care insurance?

No, traditional health insurance and medicare does not cover you for long-term care. Although under certain financial circumstances medicare may cover a portion of long-term care, an individual will still have to cover the costs of the majority of long-term care expenses themselves.


There is a price associated with everything. The important thing to remember is that if you require long-term care this could really become a financial burden to yourself and your loved ones. Be prepare, be protected and please do not underestimate the impact of long-term care insurance. 

For more information contact Skyline Risk Management, Inc. at (718) 267-6600.

Unjust Enrichment Claim Upheld by Past New York Law

Unjust Enrichment Claim Upheld by Past New York Law

In the case of MCM Products USA, Inc. v. Aliusta Design, the court addressed the issue of whether a subcontractor could make an unjust enrichment claim against a property owner when the contract is between the general contractor (GC) and the subcontractors. This case occurred due to the GC’s insolvency and the resulting situation in which subcontractors were not paid for work that they did on the project. This led them to try to get paid through the owners of the property instead, who had paid the GC rather than the subcontractors.

How Did This Case Start?

It all started when MCM leased a space for their luggage and accessories store in Manhattan. They hired a general contractor and signed a $1.4 million contract to renovate the leased property in June 2014. This GC hired subcontractors to do the construction, but there was not a contractual relationship between MCM and any of the subcontractors that actually did the majority of the work.

On March 2015, the GC filed a mechanic’s lien against the property and some subcontractors did as well. The lease that MCM had signed with the landlord required that MCM discharge any mechanic’s liens against the property promptly. MCM filed a lawsuit in May 2015 seeking a judgment, declaring that they did not owe the subcontractors any money. Counterclaims for unjust enrichment were filed against MCM by several subcontractors, saying that the leased property unjustly benefitted from the work done for which payment was not made, and that MCM should be responsible for payment. MCM moved for dismissal of the counterclaims.

A Decision Came Down

When the court came to a decision, they dismissed the unjust enrichment counterclaims made by the subcontractors. The court followed previous case law to hold that a claim of unjust enrichment is not able to be supported simply because a company benefited from the work done by the subcontractor. If there is an express contract between a GC and subcontractor, the law is very clear that the owner is not liable, unless the owner has agreed to pay the subcontractor themselves. The consent of the owner to allow the subcontractor to work on the property is not enough. The owner has to take action that would show clear indication that they were going to pay the subcontractor themselves, rather than the GC doing so. The court did not address the validity of the mechanic’s liens in this decision at all.

Final Thoughts

To reach their decision, the court used existing New York law to bar the unjust enrichment case, simply because there was no evidence that the owner (MCM) had indicated any intention to pay the subcontractors. In some cases, however, a subcontractor could have a valid unjust enrichment claim if they can show that an owner had direct dealings with the subcontractor, even if there was not a contractual relationship. Included in this are situations in which the owner pays the subcontractor director or indicates that they will pay the subcontractor. This backed up existing law in New York. 

Condo Insurance: What to Know Before You Buy

Condo Insurance: What to Know Before You Buy

Purchasing a condo is a process that involves many different steps. One step in the process that many do not think about is buying condo insurance.  While condo insurance shares similarities with homeowners’ insurance, there are some distinctive differences to be aware of when it comes to purchasing and insuring your condo.

Master Policies

If you buy a condo, it will inevitably be a part of a condo association, along with the other units in your building or complex. The association typically purchases an insurance policy that covers all of the units in the building or complex, known as a master policy.  The master policy insures the common areas shared by all owners, as well as part of the structure of your condo itself. The tricky part here is that not every master policy is the same.  Some will cover only the roof of your condo, others cover anything from the wall studs on out, and there are even some that will cover every part of the structure of your unit.

It is incredibly important to check with your association to make sure that they have a master policy and to find out what it covers; that way, you know how much insurance you need to cover on your personal policy. Even if the master policy covers every part of the construction of your condo, there are still coverages that you can only get through a condo policy.

Personal Property

One of the most important parts of carrying an individual insurance policy on your condo is the ability to cover your belongings through personal property coverage. No matter how thorough your association's master policy is, it will not provide coverage for the belongings you own. Your agent can help you with recommendations as to the amount of personal property coverage to add, but ultimately it is a good idea for you to take inventory of your belongings and the total value so that you have an idea of the level of coverage that you are going to need. If you are purchasing the condo as an investment and don't believe you need property coverage, think again. Having a condo as a rental property presents a different set of complications.

Loss Assessment

Another important aspect of carrying your own insurance policy on a condo is the consequences of what happens when your association files a claim on the master policy. Just like you have a deductible on your own condo policy, a master policy often has a deductible as well. The difference is that the master policy usually has much larger deductibles – sometimes hundreds of thousands of dollars. The association then splits that deductible between unit owners and charges you a portion, which could amount to thousands of dollars per property.  Luckily, there is a coverage on your condo policy for those potential out-of-pocket expenses. Loss assessment coverage will provide coverage if your association makes a claim on their master policy and charges you a portion of the deductible. Making sure you have enough loss assessment coverage to meet the master policy's deductible is another reason to make sure that you know what your association's master policy will cover.

Condos can be a great place to live or a great investment, but they do come with many peculiarities when it comes to purchasing condo insurance. Make sure to check with your association and your agent to make sure that you have the right amount of coverage for your condo before you buy.

Thinking of purchasing a condo? Contact Skyline Risk Management, Inc. at (718) 267-6600 for a free risk assessment. 

Cuomo Works to Revive 421-A Tax Abatement Program

Cuomo Works to Revive 421-A Tax Abatement Program

New York City building projects need to continue to keep the economy moving in the right direction; however, the 421-a tax abatement program that was encouraging building in New York City has expired. Governor Cuomo is offering union officials and developers a wage subsidy program to help revive the program. This plan is somewhat similar to the bill that was submitted to the Senate at the end of the legislative session, but that bill did not include a wage subsidy.

Trying to Keep Construction and the Economy Healthy

A bill, called 421-A, was submitted right before the end of the legislative session in June, but it failed to pass. In the bill, it detailed a $55 per hour average minimum wage for construction workers who were working on projects located south of 96th Street, which included more than 300 apartment units.

The wage subsidy program has a two-tiered wage for government-assisted projects of over 300 apartments on the waterfront: one tier for Queens and Brooklyn and another for Manhattan. For example, in Manhattan, a project south of 96th Street asks for a 421-a tax abatement would be required to pay at least $65/hour minimum wage, including benefits. Meanwhile, in Queens and Brooklyn, the wages would be at least $50/hour, in both wages and benefits. New York State would reimburse or subsidize 30% of the wages. Additionally, a developer would need to allot a percentage of the units for below-market rents.

The issue that many people are worried about is where the money is going to come from. After all, this subsidy could run into the tens of millions of dollars. Also, how will the funds be managed?

Thoughts from Governor Cuomo

During a speech at the New York State AFL-CIO 33rd Constitutional Convention, Governor Cuomo discussed the much-needed infrastructure repairs the state needs, including upgrades to the Long Island Railroad and JFK and LaGuardia airports. He then mentioned the 421-a program, admitting that this plan was largely about union wages. “That’s what this fight on 421-a is all about, and they try to make it complicated, but it’s very, very simple. I have two problems with the program; first, it’s an affordable housing program, but it doesn’t provide the affordability for long enough.” His second issue was with the city not paying the union wages. “Developers don’t want to be forced to use union labor, because if they are left on their own they want to use non-union labor, and at one time, in this city, you would never dream of building non-union construction. I want to pay more so we have union jobs because the government shouldn’t pay a poverty wage, that’s why I want to pay more.”

Keeping the economy moving in the right direction means keeping everyone working, and for construction workers, this means that they need projects to work on. This wage subsidy program is meant to keep them working at a wage that will allow them to take care of their family and their financial commitments. In addition, it offers more affordable housing for others, so they can move into the state, get jobs, and contribute to the economy. All in all, it works to help everyone. 

Worried about how the 421-A bill could effect your business? You can protect yourself with sufficient insurance protection. Contact Skyline Risk Management, Inc. (718) 267-6600 to voice your concerns. 

Adjustable Life Insurance: A Change Might Do You Good

Adjustable Life Insurance: A Change Might Do You Good

If you are interested in a life insurance policy, but you want more flexibility than the standard coverage that universal or term life insurance policies provide, you may want to consider an adjustable life insurance policy.  An adjustable life insurance policy, also known as flexible premium adjustable life insurance, is a type of insurance policy that allows you to make more changes than your typical life insurance policy.  It combines features from both term and universal health care policies.

Policy Changes

One of the most significant benefits of an adjustable life insurance policy is the ability to increase or decrease the level of policy coverage as your situation changes, similar to a universal life insurance policy.  If you go through a life event such as a promotion or adding a family member, you may determine that it is necessary to increase your policy coverage.  With an adjustable life insurance plan, you have the ability to make the necessary changes. The insurance company may require proof to show that your insurable interest has changed, but it still allows for much more flexibility than a term life insurance policy. The policy also allows for changes such as altering the length of the policy term and changing the type of protection.  There may also be a time requirement on how long before you can make changes to the insurance. If the insurance company does put a required length of time on the policy before you can make a change, it is typically for one year.

When it comes to making changes to your life insurance policy, another big benefit that an adjustable life insurance policy offers is that it does not require you to cancel an existing policy, only to purchase a new insurance policy in order to obtain the coverage that you need. With an adjustable life insurance policy, being able to make changes to the current policy prevent you from having to get a new one.


Cash Value

Unlike a universal health insurance policy, an adjustable life policy includes the option to invest part of the cash value. While the policy is not likely to get the whole percentage of the return if the market is good, these policies can offer much higher returns than a universal health care policy. On the other hand, if the market is performing poorly, there is typically a zero percent return for the insured, so they do not risk losing the money that they paid toward their premium. An adjustable insurance plan offers a low- to no-risk option for your investment. You can withdraw returns whenever you'd like or leave them to mature.


Cons of Adjustable Life Insurance

In addition to not getting the full return on a well-performing investment, there is an additional drawback to adjustable premium life insurance policies.  Unfortunately, there is no guaranteed interest rate because the interest depends on how well the investment does. If the investments fail, you may not lose money, but you will not make any either.  You also face the risk of an increased premium over time, since the policy has allowances for such adjustments.

Adjustable life insurance policies offer the benefit of flexibility that other types of life insurance policies do not, as well as providing similar cash value opportunities to what a universal health insurance policy provides.  If an adjustable life insurance policy sounds like something that might be up your alley, contact your agent to review your portfolio and see if it may be beneficial for you to purchase one. While this type of life insurance may not be a good fit for everyone, it could be a good fit for you.

Has it been a while since you reviewed your life insurance policy? Contact Skyline Risk Management, Inc. at (718) 267-6600 to get free consultation on your life insurance policy!

Contractors are Now using Drones for Large Construction Projects

Contractors are Now using Drones for Large Construction Projects

Drones are becoming a household concept. More and more industries are looking for the best way to utilize drones safely and effectively to help save time and money for any task. Drones are even becoming something discussed around the home for personal use, especially when dealing with repair and maintenance issues around the house. However, using a drone for business is not that cut and dry. At home they may cause issues, however, businesses must adhere to regulations for their industries as well as insurance issues that could ultimately cause more trouble if ignored. The construction industry sees drones as a huge asset to their business. However, if the proper steps to obtaining and using drones are ignored, the fines and lawsuits could easily put a construction company out of business. Therefore, it is important to know and follow the rules before purchasing a drone for your site.


The Preliminary Work

Before you even purchase a drone, first you must complete some preliminary research and work. For instance, did you know you must receive approval from the FAA to operate a drone? The FAA has guidelines that must be learned and understood when applying for approval for use of a drone (or UAV: Unmanned Aircraft System) on a construction site. In addition to applying for approval from the FAA, you must have a new section of your employee handbook or operations manual that deals with the use of drones, risk management, and safety procedures. This includes proper employee training regarding drones and their proper usage on a job site. In addition to training your employees and receiving an FAA approval, you must prepare to hire drone operators or train current employees on drone operations and have those operating employees pass the required aeronautics test for them to serve as a drone operator.

Finally, the last piece of preliminary work that must be completed before purchasing your first drone is the insurance test. It is important to contact your insurance provider or broker to determine the following items:

  • Does your insurance cover drones?
  • If not, do you need a policy or rider that will cover drones on your worksite?
  • How much will this extra coverage cost, and is it cost effective in the long run?
  • Once coverage is purchased, how long will it take to go into effect?

Your insurance broker should be able to sit with you to discuss these and other issues which may pop up as the results of drone usage on a job site. Most importantly, when dealing with insurance, never assume anything.  Many policies specifically exclude drone usage and specific policies need to be purchased just for this type of issue.


Continuing Issues

Once you have set everything in motion and have purchased your first drone, your job has not ended. Each job site must be analyzed properly to ensure you are within the proper guidelines of the FAA in regard to drone usage. For instance, drones are not allowed to fly over people that are not directly involved with your project.  Therefore, if you are in a busy commercial district, it may be wise to leave the drone at the office or only do work with the drone during off business hours. This and many other regulations will play a constant issues for each job.

Furthermore, since drones are a relatively new technology, the issues involving drones are constantly changing and being updated.  Should you choose to utilize drones for your construction projects, dedicate an individual within your company to constantly check for updates regarding drones in your industry and adjustments you may need to make to accommodate their usage.

Finally, be prepared to always mitigate risks for each job that may occur. Drones are a great opportunity to save money and keep employee injuries down. However, they are new and still being analyzed and understood. Therefore, there is still quite a bit of unknown risk involved. Each job site may offer a different risk as well, therefore, it is important to know your risks in advance and prepare accordingly.  

Interested in using drone technology for your construction company? Contact the experts at Skyline Risk Management, Inc., (718) 267-6600 to get proper coverage for all your business needs.