By Joe Palumbo
“East Side, West Side, all around the town there’s something wrong with our city — it’s the sidewalks on the ground.” OK, so I changed the words of James Blake’s and Charles Lawlor’s “The Sidewalks of New York” a little bit.
So you’re a retail outlet in Queens. It does not matter whether you are on the main shopping strips of Astoria, Jamaica or Forest Hills or you’re just a small side street outlet. Without a doubt you have a sidewalk in front of your business. You do not own it, but if it should happen to snow or some kid on his way home from school drops a banana peel in front of your locality, technically you’re somewhat responsible for that walkway.
But since the city passed a new liability law in September, you are not just somewhat responsible — you are totally responsible. How it worked in the past is that if someone suffered an injury in front of your place of business the city was ultimately accountable; however, since the passage of the liability law, the owner of the building is now responsible.
If you’re just renting and your lease has an expense pass-along clause, you can sooner or later look for a hike. And this does not just pertain to business owners but homeowners, too. You can actually consider this the equivalent of an added tax. Why? Because when all the smoke settles, insurance carriers can have a real windfall.
There is the great possibility (especially if you’re just a homeowner and not a business in this scenario) that you will need more coverage, and, of course, more coverage means higher premiums. Insurance companies won’t have to be that competitive on their rates because you will need to have this coverage.
It gets even a little better. Look for insurance companies to visit your premises for any sidewalks that may be damaged and considered a hazard. Your insurance company may decide to cancel or refuse insurance to you, pending your sidewalks’ condition. Remember, insurance companies like collecting premiums with the object of giving back the least possible amount in claim settlements.
So now enters the construction industry. If your sidewalk needs repair (even minimal) you may be told you need a whole new sidewalk. That’s not a $5 job, my friend. So don’t look for them to be that competitive, either.
So how’s business in the region of sidewalks? One can shout “hooray” if he or she is underwriting insurance policies and lying cement, but the situation is somewhat harder for businesses and homeowners. It gives new meaning to the New York theme song “The Sidewalks of New York.”
Joe Palumbo is the fund manager of The Palco Group Inc., an investment company, and can be reached at email@example.com or 718-461-8317.