Inside This Article:
- Two “spyder” cranes came crashing down onto a scaffolding outside a 12-story building that was under construction.
- No injuries were reported related to the incident, which occurred just a day after a partial stop-work order at the site was rescinded.
- This type of incident could lead to reputational damage as well as costly lawsuits, which can be covered by a developer or contractor’s Commercial General Liability (CGL) Insurance.
- Stringent safety protocols are critical for crane operators, who may also require Riggers Liability Insurance and other policies.
A sidewalk shed on a bustling Manhattan street collapsed on April 4 when two mini cranes fell from the construction zone above and onto the scaffolding. According to WABC Eyewitness News in New York, the shed was set up in front of a 12-story building in Midtown that is under construction. When the incident occurred, one of the mini cranes—known as “spyder” cranes—was on the roof of the building attempting to hoist the second crane from the ninth to the 10th floor and became dislodged, causing both cranes to fall.
No injuries were reported despite heavy foot traffic in the area, which is just two blocks from Times Square.
“It is very fortunate in this situation that no one was seriously injured or killed,” said Travis Verdino, Associate Managing Director, Underwriter, Commercial Insurance, Burns & Wilcox, Las Vegas, Nevada. “Anything to do with cranes, especially when it comes to construction in a place like New York City, is high risk. With so many pedestrians on these sidewalks, dropping something from a 12-story building is just that much more dangerous.”
Anything to do with cranes, especially when it comes to construction in a place like New York City, is high risk.
A construction company’s Commercial General Liability (CGL) Insurance and Excess Liability Insurance can help pay for expenses related to this type of accident, including third-party bodily injuries and property damage. These policies are also important for crane operators and others involved in the project.
“When a construction company gets called into a lawsuit, everybody is usually going to get called in as well—the developer, the landlord,” and others, said Fernando Batista, Manager, Transportation, Burns & Wilcox, Toronto, Ontario. “It could cause a company to go out of business if they do not have the proper coverage or limits in place.”
It could cause a company to go out of business if they do not have the proper [insurance] coverage or limits in place.
Crane accidents ‘becoming more and more common’
The accident in Manhattan occurred the day after a partial stop-work order at the site—issued for failure to obtain a permit for one of the spyder cranes— was rescinded, Chelsea News reported. According to PIX11 News, the Department of Buildings had a total of 28 complaints on file for the location dating back to last May, including a complaint about failure to follow proper safety measures. The department is investigating the accident, WABC noted, and the developer said in a statement that it will continue to “cooperate fully” with the review and that the safety of everyone on the construction site is “non-negotiable.”
“Construction had just been allowed to resume when the crane came crashing down,” Batista said, adding that a “root cause analysis” into the accident would be a key step. “We do not know what the root cause of this was, whether someone was negligent, or if there was a malfunction, part failure, or a maintenance issue.”
According to the U.S. Bureau of Labor Statistics, an average of 42 crane-related deaths occurred each year between 2011 and 2017, with more than half of the fatalities involving a worker being struck by an object or equipment. About 43% of fatal work injuries involving cranes occurred in the private construction industry.
Accidents like the one that recently took place in Manhattan are “unfortunately becoming more and more common,” Verdino said. “A lot of companies out there cut corners, and unfortunately that puts individuals’ safety at risk. With inflation and the economy going up and down, some companies may be cutting corners to get as much profit out of a job as they possibly can.”
How developers, crane operators can protect against losses
In July of 2023, 11 individuals were injured when a crane burst into flames while working on a 54-story building in New York City, striking a neighboring building as it fell. In February of 2024, a crane incident in Calgary, Alberta, caused serious injuries to a worker when it fell over at a construction site, Canadian Occupational Safety reported. At the time, it was one of a series of recent crane incidents in the region, which led to calls for stricter regulations and training programs across British Columbia, the outlet reported.
When a company is sued over a crane incident, its CGL Insurance can help pay for legal defense, settlements, and other costs, with Excess Liability Insurance often recommended in order for companies to obtain adequate limits for their exposure. Riggers Liability Insurance, which provides coverage for non-owned equipment being moved by a crane, is also important for crane operators.
Serious crane accidents often lead to lawsuits, Verdino said. “If the incident is making national news, the company is probably going to have to go to court over it,” he said. “We have seen defense costs increase by almost three to four times what they were a few years ago just because of the severity of these claims.”
We have seen defense costs increase by almost three to four times what they were a few years ago just because of the severity of these claims.
Court judgments are also on the rise, with “nuclear verdicts”— or awards above $10 million—continuing to challenge the construction industry. “For the last 40 or 50 years, limits of $1 million or $2 million have been the standard. With the cost of defense and medical payments going up, there is the need for Excess Liability Insurance coverage. As these claims get more severe, $1 million does not go as far as it used to.”
Managing risks to avoid ‘catastrophic’ outcomes
The high-risk nature of work involving cranes, particularly in a city environment with high-rise buildings and significant foot traffic, make strict safety protocols particularly crucial, Batista said. Having these protocols in place is also important for obtaining CGL Insurance and other policies.
“From an insurability standpoint, I would be looking at their safety record, their standard operating procedures, and their experience,” he said, adding that safety briefings should take place “before anybody lifts a tool.”
As risks increase, fewer insurance options are available, Verdino said. “Unfortunately, we are seeing a lot fewer carriers willing to offer insurance for cranes and crane operators,” he said.
This makes partnering with a specialized insurance broker essential, according to Verdino. “Find somebody who specializes in Crane/Crane Operators or Construction Insurance risks,” he suggested. Beyond that, companies “need to have a proper safety plan in place and ensure that everyone is following that,” he said.
“Sometimes we find that certain foremen or superintendents in the company are not following their protocols,” Verdino said. “The company needs to be checking and quality-assuring that all of their job sites are following their safety procedures.”
There is a lot that can go wrong [with cranes] and the consequences can be catastrophic if something does go wrong.
With work involving cranes, Batista added, “there is a lot that can go wrong, and the consequences can be catastrophic if something does go wrong.”
