ESSA Comments
on Insurance Crisis (Go Top)
In connection with a series of public hearings held around the state
during November, the Empire State Subcontractors Association (ESSA) has
provided written testimony to the New York State Insurance Department on the
state of insurance coverage for commercial liability markets.
NESCA’s state affiliate
responded to an invitation by the Insurance Department for interested parties
to provide written and/or oral testimony about the cost and availability of
commercial general liability insurance coverage, and whether the New York
Property Insurance Underwriting Association (NYPIUA) should be required to
provide commercial liability insurance coverage. NYPIUA is a joint underwriting association in which all New York
licensed property and casualty companies participate.
ESSA testified that obtaining
affordable general liability insurance coverage has been the single most
pressing business concern for commercial subcontractors over the last three
years. While the confluence of natural
disasters, terrorist attacks on the World Trade Center and a precipitous
decline in the stock market caused an unusually severe hardening of commercial
liability markets in general, the construction industry has been particularly
hard hit as a result of the absolute liability standard contractors face under
Sections 240 & 241 of the Labor Law.
This has caused most of the commercial liability carriers that
previously underwrote coverage for subcontractors to abandon the New York
marketplace. Subcontractors throughout
the state have been hit either with cancellations or enormous premium
increases, and many have had difficulty finding coverage at any price.
For the short term ESSA
expressed support for requiring NYPIUA to provide liability insurance coverage,
but made it clear that the only long-term solution will be reform of Sections
240 & 241 of the Labor Law. Members
who would like a copy of ESSA’s testimony should contact the NESCA office.
Subcontractor Groups Form
National
Subcontractors Alliance (Go Top)
Over the past two years, NESCA has played a key role in the formation
of a new national organization uniting subcontractor groups in different
states. Officially incorporated in May
2003, the National Subcontractors Alliance (NSA) was formed to provide a forum
for participating chapters to exchange information and ideas, and have a voice
at the national level on issues affecting subcontractors. In addition to NESCA, the Alliance includes
subcontractor groups based in New York City, Boston, Chicago, Tucson, Akron and
South Florida, together representing more than 2,000 members.
NSA held its first annual
meeting and election of officers on October 3-4 in Biloxi, Mississippi, and
will meet again in the spring. Roger
Jones, with Campito Plumbing & Heating, Inc., has been appointed as NESCA’s
representative on the NSA Board of Directors.
NESCA
Holiday Meeting & Reception
December
11, 2003 - Century House
6:00 p.m. – Cocktails Available for
Three Hours
Champagne Station – Hors D’oeuvres
7:00 p.m. – Dinner – Entrée Duet
Sliced Tenderloin of Beef and DiJon
Swordfish
Toys For Tots Presentation
Comedian/Impressionist Steve Van
Zandt
Cost - $50
Spouses (significant others) Come For
Free!
PRESIDENT’S MESSAGE (Go Top)
This
past October 3-4, I had the pleasure of attending, along with Kevin Garrity
from Rose & Kiernan and Roger Jones from Campito Plumbing & Heating,
the first annual meeting of the National Subcontractors Alliance (NSA), held in
Biloxi, Mississippi. NSA is a newly
formed federation of local subcontractor associations that was organized to exchange
information between participating chapters and to foster opportunities for
representation at the national level on construction industry issues. While NESCA has been involved over the last
two years in the formation of NSA, this was the first meeting I personally
attended, and I found it to be very enlightening. The seven charter chapters of NSA are among the largest local
subcontractor organizations in the country, so we all have much in common. We have similar staff size and budget
requirements, and each chapter offers its respective members a wide variety of
member programs, services and benefits.
In other words, this is a good fit for NESCA.
At
the Biloxi meeting, chapter representatives discussed and traded information on
the important legislative and regulatory initiatives of each group. We also discussed chapter services, meetings
and educational programs as well as membership development issues. I believe that everyone walked away from the
meeting with some good ideas offered by the other organizations, and it was
well worth our time to attend.
On
October 24th, NESCA’s Board of Directors held its annual strategic
planning meeting at the Century House.
Basically, this meeting allows the Board to spend an entire afternoon
assessing NESCA’s performance and value to the membership, and to look forward,
on a long-range basis, to try to determine our members’ needs in the
future. The Board discussed some of the
top business problems faced by subcontractors today, such as the
availability/affordability of commercial general liability insurance, and what
NESCA can do to help address these problems on behalf of our members. We discussed ideas for some new initiatives,
such as establishing an Alliance with OSHA, the formation of a group general
liability insurance program, and a group website program for our members. We discussed new ideas for legislative
proposals, membership meeting programs, and leadership development. In short, for more than 30 years NESCA has
been an energetic, vibrant organization, and by engaging in some long-range
planning each year, we hope to stay ahead of the curve and keep it that
way.
I
hope all members make plans to attend NESCA’s December 11th holiday
reception and dinner at the Century House.
Instead of our normal “business meeting”, this special meeting will
provide members with a more social atmosphere in the holiday spirit. We will have a 3-hour open bar, fantastic
hors d’oeuvres and a first-class dinner, along with our annual Toys For Tots
presentation to the Marine Corps and special entertainment by comedian/
impressionist Steve Van Zandt. Best
yet, all spouses (or significant others) come for free! I hope to see you there!
Jeffrey B.
Senft, President
SUBCONTRACTOR AVOIDS
INDEMNIFICATION CLAIM FOR
CONTRACTOR’S STRICT LIABILITY ON LABOR LAW (Go Top)
The Supreme Court of New
York, Appellate Division, First Department on June 12, 2003, decided the Celio
Gomez. v. National Center for Disability Services, Inc. case in which
the court addressed the interaction between strict liability provisions of the
New York State Labor Law and General Obligations Law §5-322.1.
Gomez, an employee of Schlesinger Building
Restoration, Inc., the subcontractor, fell and slipped on ice while working on a
roof of a building owned and operated by the National Center for Disability
Services, Inc., the owner. He brought an action against the owner and the
general contractor alleging violations of Labor Law §200, §240(1), and §241(6)
and common-law negligence. The owner brought a third-party action against the
subcontractor for contractual indemnification.
The court in addressing the
issue of the subcontractor’s liability under the contractual indemnification
clause pointed out that General Obligations Law §5-322.1 prohibits the
enforcement of indemnification agreements that seek to exempt the indemnitor,
as owner and operator of the premises, from liability for negligence. The intent of the General Obligations Law
§5-322.1 is to prevent a prevalent practice in the construction industry of
requiring subcontractors to assume liability by contract for the negligence of
others. Because the section is
inapplicable where liability is purely statutory, there must be a showing that
the indemnitee was actually negligent.
The court’s holding in this
case demonstrates the interaction between strict liability provisions of the
New York State Labor Law with respect to an owner who seeks indemnification
from the subcontractor and General Obligations Law §5-322.1, which allows the
subcontractor to avoid the obligations of the indemnification agreement by
proving negligence on the part of the owner.
Terence J. Burke
NESCA Legal Counsel
NEW YORK’S LOCAL TAX BURDEN DWARFS THE
NATIONAL AVERAGE (Go Top)
New York State is home to
the highest local taxes in the nation, more than 70 percent above the national
average, according to a new study by the Citizens Budget Commission (CBC). In fact, New York's overall tax burden, and
its local taxes in particular, dwarf even those in comparably large and
urbanized competitor states with similar economic profiles and histories, the
study shows.
"Excessive local government taxes are only one
part of a broader and troubling pattern of state fiscal practices that includes
extraordinary debt levels and looming multi-billion dollar budget gaps,"
said Charles Brecher, CBC research director and professor at NYU's Wagner
School. "These practices must be
improved, if New York is to compete more effectively with other states."
Among the 11 large,
urbanized states with which New York most directly competes, six have local tax
burdens below the national average, and the second highest is New Jersey, where
taxes are 20 percent above the national average. The report also found that,
when measured as a proportion of personal income, New York's combined state and
local tax burden is 26 percent above the national average. The state with the
second highest tax burden, California, is far behind New York at only 8 percent
above the national average.
The CBC attributed the high
tax burden to four government programs:
§
Medicaid: New York’s
Medicaid program is the most expensive in the nation and requires more local
funding than any other state. One fourth of the tax disparity between New York
and the national average can be blamed on Medicaid.
§
School aid: Education
spending accounts for another quarter of the tax disparity. New York’s
per-pupil spending is among the highest in the nation, but state aid to local
school districts is poorly targeted.
§
Benefits and pensions:
The state-regulated pensions and fringe benefits for local government
employees’ accounts for another quarter of the tax disparity.
§
Government employment:
New York’s government employment, and the salaries paid to government
employees, are both 25 percent above national average.
New York State faces a major
structural imbalance between spending and recurring revenues, the report said.
“Recent history of failure to confront the unsustainable expenditure base has
serious future consequences,” it added.
December 4, 2003
Board of Directors Meeting
Century House, Latham, 6 pm
December 11, 2003
NESCA Holiday Meeting
Century House, Latham, 6 pm
December 16, 2003
NESCA/GBC/ECA Seminar
Lead In Construction
Building Industry Center, 3
pm
January 8, 2004
Board of Directors Meeting
Century House, Latham, 5 pm
January 8, 2003
NESCA Membership Meeting
Joint Meetng with
NAWIC
Century House, Latham, 6 pm
NESCA’s December 11th
Membership Meeting is our Annual Toys for Tots Night!
Please remember to bring an unwrapped toy with you
to donate to the U.S. Marine Corps Toys for Tots Campaign. Toys for Tots was started in 1947 by Major
Bill Hendricks, USMCR, and NESCA has participated in the campaign every year
since 1978. Let’s bring the Marines
lots of toys this year! In addition to
the toys members bring to the meeting, NESCA will donate $2,500 raised at the
October 9th Trade Show.
WHAT’S YOUR MEMBERSHIP IN NESCA WORTH? (Go Top)
What is the worth of your
membership in NESCA? The actual dollar
value is hard to calculate, but NESCA’s Board of Directors recently discussed
the value of specific NESCA benefits and services at a recent strategic
planning meeting. Here’s what your
peers on the Board came up with:
Service Value
Lien Filing Service $1,500
Lien Reporting 300
Business Practice Interchange 500
Membership Meetings 750
Educational Seminars/Courses 1,500
Monthly Newsletter 75
Special Bulletins 75
Legislative Advocacy 500
Membership Directory/Website 1,000
Sample Forms, Letters, Documents 750
Direct Staff Assistance 1,000
Total Value $7,950
In total, the Board
determined that the selected NESCA services shown above have a value of $7,950,
more than ten times NESCA’s annual dues investment. This does not even include additional NESCA services such as our
Workers’ Compensation Safety Group, Employee Assistance Program, Group DBL
Program, Legal Defense Fund, Section 125 Employee Benefits Program, Trade Show,
and Liaison with Public Contracting Agencies.
While pricing out NESCA’s services can be somewhat subjective, one thing
is clear. On the whole, taking even
moderate advantage of your benefits as a member of NESCA recoups the cost of
your dues investment many times over!
WOULD
YOU LIKE YOUR COMPANY TO BE PROFILED IN THE NESCA NEWSLETTER? (Go Top)
As
a new feature in upcoming NESCA Newsletters, the Board of Directors would like
to include member profiles. Each month
a different member’s company will be profiled, selected at random from those
who would like to be included for consideration. Profiles will likely include such information as: location of
company; type of work the company performs; company history; key employees;
recent noteworthy projects; and unique characteristics of the company. Please let the NESCA office know if you are
interested in being considered for a member profile in a future NESCA
Newsletter by contacting NESCA at (518) 869-9800.
