Since 2013, there is a clear trend as it relates to primary general liability limits, deductibles, and overall rates needed to insure wrap-up projects in New York. At the beginning of this time period, the rate to insure a project in New York was just over 5% of enrolled construction volume. Fast forward to 2025 and the rate has nearly doubled, with liability deductibles increasing eightfold—shifting a tremendous amount of risk from the balance sheets of the insurance companies and putting increased financial pressure on general contractors whose focus should be to construct a building in a safe and timely manner. Primary general liability limits have increased to the now standard of $5 million per occurrence with a deductible of $4 million, as excess liability underwriters look to stay out of what is considered the “working layer,” where losses are frequent. Deductibles outside of the state remain a fraction of this amount. We are currently seeing total rates above 10% and expect this trend to continue.
These changes reflect how insurance underwriters view the New York construction arena, as losses have escalated over time in both frequency and severity. A significant contributing factor is the exploitation of New York Labor Laws 240 and 241, which impose strict liability on general contractors and owners for certain construction site injuries. Historically, these claims involved legitimate accidents, but in many cases, minor injuries are exaggerated into major surgeries, supported by certain medical professionals and plaintiff attorneys to justify large settlements—now averaging nearly $3 million.
Emerging trends
Another concerning trend that emerged in 2018, and continues today, was staged construction accidents involving plaintiffs who were either not injured or not present at the site. Evidence suggests coordination among medical professionals, plaintiff attorneys, and third-party litigation financing companies. Plaintiffs—often homeless individuals or illegal immigrants using the same address—are recruited with promises of compensation they never receive. These fraudulent schemes have led to increased scrutiny and legal action, including RICO (Racketeer Influenced and Corrupt Organizations) suits led by organizations such as Tradesman Program Managers. Several law firms have since distanced themselves from suspicious cases.
These fraud schemes are placing unforeseen financial burdens on construction projects, further straining an already-limited insurance market and contributing to the overall rise in construction costs. Wrap-up rates and deductibles continue to rise, with general liability deductibles doubling since 2018 to between $3–$4 million. Wrap-up rates have averaged approximately 9.41% since 2018, with the past three years averaging around 10.1%. Total rates are currently trending between 10–11%, including the cost to place excess limits of $100M, which is typically the required amount for most large municipal and private projects.
To put this in perspective, the chart on the next page shows the averages of insurance placements in the metro area outside of New York over a similar time period. Current total rates in New Jersey and Pennsylvania are approximately 2%, showing an opposite trend with an overall decrease in total rate—about 80% lower for the same project just across the Hudson River.
Build your path forward
Addressing the root causes of rising insurance costs—namely, the misuse of New York Labor Law and fraudulent claims—is essential to restoring balance in the construction insurance market. Without meaningful reform, the financial viability of future projects across the state remains at risk.
Given the complexity and evolving nature of construction-related liability in New York, working with a trusted insurance advisor is essential. The Baldwin Group’s construction practice experts can help you navigate coverage options, mitigate risk exposure, and ensure you’re adequately protected against costly and potentially fraudulent claims.
This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The content of this document is made available on an “as is” basis, without warranty of any kind. The Baldwin Insurance Group Holdings, LLC (“The Baldwin Group”), its affiliates, and subsidiaries do not guarantee that this information is, or can be relied on for, compliance with any law or regulation, assurance against preventable losses, or freedom from legal liability. This publication is not intended to be legal, underwriting, or any other type of professional advice. The Baldwin Group does not guarantee any particular outcome and makes no commitment to update any information herein or remove any items that are no longer accurate or complete. Furthermore, The Baldwin Group does not assume any liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Persons requiring advice should always consult an independent adviser.
