Authorizes the use of owner-controlled and contractor-controlled insurance for certain construction projects; requires a report on the use of such insurance.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10362B
SPONSOR: Rules (Wallace) 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::
The purpose of this bill is to allow the Department of Transportation,
The State University of New York at Buffalo, and the Niagara Frontier
Transportation Authority to utilize owner-controlled and contractor-
controlled insurance programs in connection with certain construction
projects.
SUMMARY OF PROVISIONS::
This bill would allow the Department of Transportation, The State
University of New York at Buffalo, and the Niagara Frontier Transporta-
tion Authority to utilize owner-controlled and contractor-controlled
insurance programs (OCIP/CCIP) 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-controlled 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.
This bill would also require the Office of General Services to submit an
annual report to the governor and legislature which documents each
contract subject to an OCIPs and CCIPs used by the Department of Trans-
portation, The State University of New York at Buffalo, and the Niagara
Frontier Transportation Authority pursuant to the act.
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 DATE::
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
10362--B
IN ASSEMBLY
May 21, 2024
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Wallace) --
read once and referred to the Committee on Insurance -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee -- again reported from said committee with amend-
ments, ordered reprinted as amended and recommitted to said committee
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
contractor-controlled insurance
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 2 of subsection (a) of section 2504 of the insur-
2 ance law, subparagraphs (A) and (B) as amended and subparagraph (C) as
3 added by chapter 602 of the laws of 2023, is amended to read as follows:
4 (2) In paragraph one hereof, "public corporation" and "public authori-
5 ty" shall not include:
6 (A) a public corporation or public authority created pursuant to
7 agreement or compact with another state,
8 (B) the city of New York, a public corporation or public authority, in
9 connection with the construction of electrical generating and trans-
10 mission facilities or construction, extensions and additions of light
11 rail or heavy rail rapid transit and commuter railroads, [or]
12 (C) the city of New York, the city school district of the city of New
13 York, the New York city industrial development agency, the New York city
14 health and hospitals corporation, or the New York city housing authori-
15 ty, in connection with a contract the principal purpose of which is
16 construction that (i) has an estimated cost of no less than five million
17 dollars or (ii) is subject to an owner-controlled insurance program for
18 projects, provided that any contract undertaken pursuant to this subpar-
19 agraph that has an estimated cost of five million dollars or more may
20 only be undertaken pursuant to a project labor agreement as such term is
21 defined in section two hundred twenty-two of the labor law,
22 (D) the state department of transportation in connection with a
23 contract or contracts, the principal purpose of which is construction or
24 reconstruction of state route 33, also known as the Kensington Express-
25 way, and the Humboldt Parkway, in the city of Buffalo, that (i) has an
26 estimated cost of no less than five million dollars, or (ii) that is
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15222-05-4
A. 10362--B 2
1 subject to an owner-controlled insurance program for projects, provided
2 that any contract undertaken pursuant to this subparagraph may only be
3 undertaken pursuant to a project labor agreement as such term is
4 defined in section two hundred twenty-two of the labor law,
5 (E) the state university of New York at Buffalo, in coordination with
6 the state university construction fund as created pursuant to article
7 eight-A of the education law, the principal purpose of which is
8 construction at the state university of New York at Buffalo and shall
9 include without limitation the empire AI research institute authorized
10 pursuant to section three hundred sixty-one of the economic development
11 law, in connection with a contract or contracts that (i) has an esti-
12 mated cost of no less than five million dollars, or (ii) that is subject
13 to an owner-controlled insurance program for projects, provided that any
14 contract undertaken pursuant to this subparagraph may only be undertaken
15 pursuant to a project labor agreement as such term is defined in section
16 two hundred twenty-two of the labor law, or
17 (F) the Niagara Frontier transportation authority as established
18 pursuant to article five of the public authorities law in connection
19 with a contract or contracts, the principal purpose of which is
20 construction to extend or expand the railroad in the Niagara Frontier
21 transportation district, that (i) has an estimated cost of no less than
22 five million dollars, or (ii) that is subject to an owner-controlled
23 insurance program for projects, provided that any contract undertaken
24 pursuant to this subparagraph may only be undertaken pursuant to a
25 project labor agreement as such term is defined in section two hundred
26 twenty-two of the labor law.
27 § 2. A report shall be submitted no later than September 30, 2025 and
28 annually thereafter, to the governor, the temporary president of the
29 senate and the speaker of the assembly by the office of general services
30 in coordination with and on behalf of the department of transportation,
31 state university of New York at Buffalo, and the Niagara Frontier trans-
32 portation authority containing information regarding each contract
33 subject to an insurance program authorized pursuant to this act. Such
34 report shall include for each contract awarded in the preceding fiscal
35 year: a description of the project to be implemented by such contract;
36 information regarding the procurement process for each such contract,
37 including the list of responding entities that demonstrated the general
38 capability to perform such contract, to the extent such contract was
39 awarded on a best-value basis or such a list is otherwise available; the
40 total award value of each contract; and an explanation of the estimated
41 savings resulting from using owner-controlled or contractor-controlled
42 insurance in conjunction with such contract. Such report shall also
43 include for each contract concluding in the preceding fiscal year: a
44 description of the dispute resolution processes used for insurance or
45 liability disputes arising during such contract's performance, to the
46 extent not legally privileged; the total cost of such contract; a
47 comparative description of work site safety relative to similar
48 construction projects not subject to an insurance program authorized
49 under this act; the participation rate of and total dollar value of
50 monies paid to minority- and women-owned business enterprises under such
51 contracts, and a separate listing of the participation rate of and total
52 dollar value of monies paid to minority- and women-owned business enter-
53 prises for projects using contractor-controlled insurance that cost no
54 less than five million dollars and no more than twenty-five million
55 dollars.
56 § 3. This act shall take effect immediately.
