BILL NUMBER: S9327B
SPONSOR: RYAN
 
TITLE OF BILL:
An act to amend the insurance law, in relation to authorizing the use of
owner-controlled and contractor-controlled insurance; and in relation to
requiring reports on contracts subject to owner-controlled and contrac-
tor-controlled insurance
 
PURPOSE:
To expand the state and municipalities outside of New York City's abili-
ty to use owner-controlled and contractor-controlled or "wrap-up" insur-
ance.
 
SUMMARY OF PROVISIONS:
Section 1: amends section 2504 of the insurance law by adding new
subparagraphs (d), (e), and (f) to subsection 2 to make owner-controlled
and contractor-controlled insurance available for the Department of
Transportation, The State University of New York at Buffalo, and the
Niagara Frontier Transportation Authority in connection with the
construction or reconstruction of the Kensington Expressway and the
Humboldt Parkway, the construction of the Empire AI Research Institute,
and the construction to extend or expand the railroad in the Niagara
Frontier transportation district, respectively. To utilize owner-cont-
rolled and contractor-controlled insurance programs, such projects must
have an estimated cost of no less than $5 million, or be subject to an
owner-controlled insurance program that is undertaken pursuant to a
project labor agreement.
Section 2: expands the content of the report described in section 2 of
chapter 602 of the laws of 2023 to be consistent with the content of
section 2504 of the insurance law as amended in this legislation.
Section 3: effective date.
 
JUSTIFICATION:
Last year, a law went into effect authorizing public works projects in
New York City to utilize wrap-around insurance. This is because small
contractors, including many small businesses and MWBEs, often struggle
to find competitive insurance options that meet the standards required
for public construction projects, and these contractors have a more
difficult time obtaining affordable insurance. High insurance premiums
make these businesses less competitive as prime contractors and subcon-
tractors.
"Wrap-up" insurance helps solve this issue. An owner-controlled insur-
ance policy is a single policy held by the owner that covers the owner
and contractors of all levels for the entire project or group of
projects. A contractor-controlled insurance policy is held by the
construction manager or general contractor and covers the owner as well.
In a conventional project structure, in which many contractors provide
insurance to the public owner, disputes between different carriers over
liability and coverage consume considerable time and resources, escalat-
ing costs. In contrast, "wrap-up" insurance can provide more efficient
coverage through a single policy. Further, when a public owner imple-
ments a "wrap-up" policy, the owner is relieved of the burden of moni-
toring that each contractor maintains coverage if the project continues
beyond the length of an applicable policy.
This bill seeks to expanded the benefits afforded to New York City last
year to the entire state.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DA 1E:
This act shall take effect immediately.