NEW YORK HOME BUILDERS ARE planning to supply their own insurance coverage under the new Reciprocal Liability Insurance Co., which should begin offering plans to builders and remodelers this summer. The New York State Builders Association will run the company, which executive vice president Phil LaRocque says was created as a last resort after other major insurance providers, such as North American Casualty and Great American, recently pulled their coverage from the state.

Before departing from the state altogether, insurers had been increasing their premiums in New York, complaining that the state's “strict liability” standard for builders makes them particularly susceptible to litigation over worker injuries. However, the Insurance Journal reports that the state assembly has not shown interest in changing the law, saying it has helped New York retain one of the highest construction safety records in the country. LaRocque notes that the lack of available policies has driven up the cost of insurance for the state's home builders and has substantially raised the average price of a new home in the state. The state's insurance department, along with Sen. Nancy Larrain Hoffmann, has worked with the builders association to set up the new company.

“It's no longer an issue of affordability, the issue is availability,” said Hoffmann. “Insurance just doesn't exist for home builders. Their last resort is to become their own underwriters.”

LaRoque, whose group will run the company, told the Journal that he estimated the cost of new single-family homes or smaller, multifamily units is $3,000 to $10,000 higher because of the insurance issue “unique” to New York builders.