IREON Insights: The 90-day warning: How the AVOID Act rewrites risk for New York contractors - by Kenny Eisman

For decades, New York construction defendants have played a slow chess match. Get served, investigate, depose, and eventually (sometimes years later) bring the responsible subcontractor into the case. The AVOID Act ends that game.

Effective April 18, 2026, defendants in any New York lawsuit have 90 days from serving their answer to implead third parties. Miss the window and you can be on the hook for the entire judgment, regardless of what your contracts say about indemnification, defense, or insurance procurement. For owners, general contractors (GC), and subs operating under Labor Law 240 and 241, where strict and absolute liability already do most of the heavy lifting, this is the most consequential procedural change in a generation.

The End of Discovery-Driven Impleader
Governor Hochul signed the AVOID Act (Avoiding Vexatious Overuse of Impleading to Delay) into law on December 19, 2025, with Chapter Amendments following February 13, 2026. The Act applies to litigation commenced on or after April 18, 2026. Three points worth memorizing:

• The 90-day clock starts the moment the answer is served. Untimely third-party actions must be severed or dismissed, and the statute expressly prohibits consolidation. That means you can end up litigating two parallel cases over the same incident, with all the cost and inconsistency that implies.

• There is a narrow 120-day window for claims against a plaintiff’s employer where a “grave injury” under Workers’ Comp Law §11 is alleged, or where the employer’s identity was unknown at the time of the answer. Grave injury is a high bar (death, paraplegia, loss of an index finger, traumatic brain injury, and a short list of others), so the exception will not save most cases.

• The window applies to both contractual and common-law indemnification. This is the part the industry needs to internalize: AVOID does not care whether your indemnification rights are airtight. If you do not assert them within 90 days, they may be gone.

Why This Hits Labor Law Cases Hardest
The economic logic of NYC construction insurance assumes you can transfer risk down the chain. An owner gets sued under Labor Law 240. The GC and the trade sub get impleaded. The sub’s CGL and excess respond per the contractual indemnification and additional insured language. Premiums, retentions, OCIP structures, all of it is priced around that workflow.

AVOID compresses the entire workflow into the first three months. If the responsible trade is not identified and impleaded by day 90, the cost of that risk transfer does not just shift. It potentially evaporates.

Old Way Versus New Way
Under the old regime, defendants could be flexible: add subs as discovery developed, fold them into consolidated trials, and let liability sort itself out before verdict. Under AVOID, the posture is rigid. Every potential third party must be identified upfront, impleader must happen within 90 days of the answer, and missing the deadline can fragment the litigation into separate, costlier proceedings.

In practice, expect a wave of “protective impleader.” Rather than wait for proof of fault, GCs and owners will likely implead every trade on site at the time of an incident, sorting it out later. For subcontractors, that means being dragged into more litigation, earlier, regardless of actual involvement.

Your Day One Checklist
The AVOID Act is a contracts-and-process problem before it is a litigation problem. Four things to do now:

1. Centralize your contracts. Vendor agreements, subcontracts, COIs, and indemnification clauses need to be retrievable in hours, not weeks. Defense counsel will need them on Day One, not Week Three.

2. Tighten your incident response workflow. Site logs, accident reports, RFIs, and daily reports should be flagged and preserved the moment an incident occurs, not pulled together after a summons arrives.

3. Audit the chain. Subcontractors who do not understand the new deadlines are a liability to everyone above them. If they cannot timely implead their own sub-tier vendors, the chain of indemnification breaks at their level.

4. Engage defense counsel before the answer. The 90-day clock does not start until the answer is served, so pre-answer motion practice can buy investigation time. Loop in your broker and counsel the day a claim hits.

The Bottom Line
For New York contractors, AVOID turns risk management into a sprint. Contracts you have not read, subcontractors you have not vetted, and claim protocols you have not stress-tested are no longer back-burner items. They are the only thing standing between you and a judgment your contracts say someone else should pay.

In the post-AVOID world, speed is not just a defense. It is the defense.

Kenny Eisman is a vice president of the northeast division at HUB International, Manhattan, N.Y.