N.Y. Carrier’s Cancelation for Nonpayment Places Liability on Contractor for Subcontractor’s Worker’s Injury

New York, NY (WorkersCompensation.com) -- A worker's injury on a construction job set off a chain reaction leading to a contractor's liability for the claim.

In Singh v. Atlas Construction Corp., No. CV-22-2011 (N.Y. App. Div. 02/15/24), evidence established that a subcontractor's carrier did enough to show that it canceled the policy for nonpayment to let itself off the hook for the worker's claim.

The worker was injured when he fell from scaffolding while working for a subcontractor on a construction project. The carrier denied liability for the claim, asserting that it had canceled its workers' compensation contract with the subcontractor for nonpayment of premiums.

Following hearings, a workers' compensation law judge ruled that the carrier effectively canceled the insurance contract and, thus, liability for the claim rested with the general contractor under New York law,

Workers' Comp 101: Under Workers' Compensation Law Section 56, a New York contractor who subcontracts all or any part of a contract involving hazardous employment shall, in case of injury or death to any employee arising out of and in the course of such hazardous employment, be liable for and pay compensation to such employee or persons entitled to compensation on the death of such employee, if the subcontractor has secured compensation coverage.

In New York, a carrier has the burden of establishing its compliance in regard to notice of cancellation of coverage. When service is by mail, the notice of cancelation must be sent by certified or registered letter, return receipt requested, addressed to the employer at its last known place of business.

According to the court, there was substantial evidence to support the board's finding that the proof submitted by the carrier to establish cancelation of the policy was sufficient.

The court noted that the carrier produced the U.S. Postal Service certified mail barcode reflecting the tracking number and the number and the employer's name and address and the notice of cancelation. The board credited the carrier's contention that all of the information was printed and mailed together as one document to the contractor.

Thus, the court upheld the board's ruling in the carrier's favor.

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