§ 1-07 Insurance Requirements.
RCNY § 1-07
The applicant is required to submit to the Agency, for its approval in a form satisfactory to the Agency including but not limited to, an endorsement that fifteen days prior notice by registered mail, return receipt requested, of cancellation shall be given to the City of New York as the Agency shall prescribe, the following evidence of insurance prior to loan closing or commencement of construction or installation, whichever is first: (a) An original policy of fire insurance with extended coverage, for a term of three (3) years, in an amount at least equal to the amount of the loan. During the construction period coverage may be for less than the amount of the loan. Such policy must contain a loss payable clause, naming the City of New York, c/o Department of Housing Preservation and Development as mortgagee and further provide that "buildings in course of renovation with permission granted to complete and occupy" or a similar description to this effect. When the improvements are completed, such proviso is to be deleted from the policy.
(b)An original policy of owners protective liability and property damage insurance issued to the contractor, with the owner and "The City of New York Department of Housing Preservation and Development" as additional insured, to protect the owner and the City against claims for property damage and for personal injuries, including accidental death caused by the operations of the contractor or his subcontractors during the performance of work at the building or adjacent thereto, in at least the sum of $100,000 - $300,000 bodily injury and $25,000 - $50,000 property damage, or in such larger amounts as may be determined by the Agency. When improvements are completed, this coverage may be discontinued.
(c)Evidence of the contractor's coverage for public liability and property damage insurance, or by the comprehensive general liability insurance to protect him and his subcontractors, the owner and the City against claims for property damage and for personal injuries including accidental death in at least the sum of $100,000 - $300,000 bodily injury and $25,000 - $50,000 property damage.
(d)An original policy of boiler insurance (broad form) in the amount of not less than $50,000 providing coverage in the event of explosion, collapse, or rupture of boilers during installation or operation, where applicable.
(e)The contractor and each subcontractor shall provide adequate Worker's Compensation Insurance for all employees engaged in the work on a building who may come within the protection of the Workers' Compensation Law, and where practicable, Employer's General Liability Insurance for employees not so protected.
(f)A payment and performance bond guaranteeing performance by the contractor and payment for all services and material. Where satisfactory proof has been presented that after a diligent effort such bond cannot be obtained, the Agency may accept in lieu thereof (1) a guarantee of completion executed by the owner and where the owner is a corporation, by the principal stock-holder(s) or officer(s) thereof, (2) a financial statement by each party executing such a guarantee, showing sufficient net assets and net worth to give reasonable certainty of financial ability to fulfill such commitment, and (3) an amount equal to two (2%) percent of the construction cost as a non-refundable fee. The Agency may in its discretion, where satisfactory proof has been presented that after a diligent effort such bond cannot be obtained, accept in lieu thereof bonds furnished by subcontractors covering at least fifty (50%) percent of the construction cost, in which case the balance of the construction cost shall be covered by guarantees of completion and fees as described above. Following completion of the rehabilitation the owner shall maintain public liability insurance against claims for personal injury or death and for damage to property suffered by others, occurring upon, in or about the building in at least the sum of $100,000 – $300,000 bodily injury and $25,000 – $50,000 property damage in a form satisfactory to the Agency. Modification of those insurance requirements as to term, amount, or coverage may be made only with the approval of the Deputy Commissioner of the Agency charged with the administration of this pro- gram.
