A new law is about to fundamentally change how construction liability claims are handled in New York. Miss a deadline, and you may permanently lose the right to recover costs from the subcontractor actually responsible.
New York's construction industry has long operated under some of the strictest liability laws in the country. Labor Law §240 and §241 — collectively known as the Scaffold Law — expose general contractors and property owners to absolute liability for gravity-related injuries on job sites. For decades, the standard response was to implead subcontractors after the fact, spreading liability through indemnity claims as the facts developed through discovery.
That playbook ends on April 18, 2026.
The AVOID Act — Avoiding Vexatious Overuse of Impleading to Delay Act — was signed into law in December 2025 and takes effect April 18, 2026. It applies to all cases pending on or after that date, meaning active litigation is not grandfathered in.
The law imposes strict, non-extendable deadlines on when construction defendants can bring third parties into a lawsuit. Its stated purpose is to reduce tactical delay, but its practical effect is to force general contractors to conduct full liability investigations and make strategic impleader decisions within days of receiving a complaint — not months.
For indemnity and contribution claims based on a contract (your subcontract agreements), you have 60 days from the date you serve your answer to file a third-party action. This is a hard deadline with no provision for extension. See the full deadline timeline →
For common-law indemnity and contribution claims not based on a written contract, the clock starts when you become aware that another party may bear responsibility. This ambiguous standard will generate significant litigation of its own — expect disputes over exactly when awareness was triggered.
Once a third-party action is filed, additional impleader layers face compressing windows:
Once the plaintiff files a Note of Issue, no impleader is permitted at all — regardless of when you learned about a subcontractor's potential liability. Late third-party actions must be severed or dismissed and cannot be re-consolidated.
Under the old system, GCs had the luxury of time. You could wait for discovery to reveal which subcontractor's work caused an injury, consult with counsel, negotiate settlements, and make calculated decisions about who to bring into the case.
Under the AVOID Act, that luxury is gone. Here's what changes in practice:
The AVOID Act doesn't just change litigation strategy — it amplifies the consequences of insurance gaps that previously might have been manageable.
If a subcontractor's Additional Insured endorsement is missing, expired, or improperly worded, you may lose your ability to tender the claim to their carrier. If your subcontract's indemnification language doesn't hold up, and you've missed the impleader deadline, there's no backstop.
Key insurance issues the AVOID Act makes urgent — see our full breakdown of the 5 gaps to close:
The bottom line: The AVOID Act turns insurance and contract hygiene from a back-office function into a front-line risk management priority. Firms that have been sloppy about certificate tracking or indemnification language will feel it in their loss experience within the first year of the law's operation.
There are four things every general contractor in New York should do now:
April 18 is closer than it looks. The firms that will navigate the AVOID Act successfully are the ones that have already restructured their contracts, insurance requirements, and internal workflows before the first complaint lands under the new rules.
We work with New York general contractors to audit insurance programs, tighten subcontractor agreements, and build the operational workflows the AVOID Act demands.
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