Part 1 of 8
In 2025, New York enacted the Avoiding Vexatious Overuse of Impleading to Delay Act, commonly known as the AVOID Act. The law was introduced as Senate Bill S.8071-A and amends CPLR §1007, which governs third-party practice. Governor Kathy Hochul signed the Act into law on December 13, 2025.
The statute does not take effect immediately. The AVOID Act becomes effective 120 days after enactment, placing its effective date on April 12, 2026. It applies only to actions pending on or after that date, subject to the statute’s stated exceptions.
The AVOID Act does not create new coverage law. Instead, it compresses the timeframe in which risk transfer decisions must be made. As a result, mistakes that already existed in third-party liability analysis now surface faster, earlier, and often with less information.
That shift has created confusion in the claims world. Some view the Act as a change in coverage law, particularly with respect to additional insured status. Others see it as a plaintiff-friendly expansion of liability exposure. Neither view is accurate.
The AVOID Act does not change coverage law. It changes when decisions must be made. That timing pressure forces claims professionals to evaluate risk transfer earlier, often before the file feels fully developed.
What the AVOID Act Actually Does
The core function of the AVOID Act is to shorten the time allowed for third-party actions and impleader. Defendants now have limited windows to bring contractors, vendors, employers, and other potentially responsible parties into a lawsuit.
What the Act does not do is rewrite insurance policies. It does not alter additional insured endorsements. It does not change contractual indemnity language, and it does not expand defense obligations. All of that law already existed. The practical difference is that decisions tied to those obligations must now be made sooner.
In most cases, a defendant now has 60 days after serving an answer to file a third-party action when liability arises from a contractual relationship. Each successive layer of third-party practice carries even shorter deadlines, often measured in weeks. Extensions are limited and no longer routine. For claims professionals, this means risk transfer decisions occur earlier in litigation, frequently before the investigation feels complete.
The AVOID Act applies only once litigation is underway. These deadlines begin after a lawsuit is filed. While the Act does not govern pre-suit claim handling, its post-suit requirements push risk transfer analysis earlier in the overall life of a claim. Identifying potential third parties before litigation begins makes compliance far more manageable once suit is filed.
How Delay Used to Hide Weak Analysis
Historically, delayed third-party practice acted as a buffer. Tenders could be accepted loosely. Defense could be extended while facts continued to develop. Risk transfer decisions could be revisited later if the investigation shifted.
That delay often masked incomplete analysis.
When impleader could occur far down the road, early mistakes lacked urgency. Coverage positions drifted. Defense costs accumulated without clear allocation. Files remained open-ended.
The AVOID Act removes that buffer.
Why Early Decisions Now Matter More
With tighter timelines, early decisions carry greater consequences. Accepting a tender prematurely can lock a carrier into defense obligations that may not align with the actual risk. Misunderstanding indemnity obligations can shift costs into the wrong bucket. Reliance on certificates or assumptions can create exposure that is difficult to unwind.
These risks are not new. What is new is how quickly they materialize. A rushed decision early in the case can now drive years of defense spend.
Speed Is Not the Same as Discipline
The AVOID Act does not reward speed. It penalizes poor analysis.
Disciplined claims handling means maintaining analytical rigor even as timelines shorten. It requires separating additional insured coverage from contractual indemnity, treating tender letters as starting points rather than proof, and understanding where defense dollars truly originate.
Teams that equate speed with decisiveness will experience more pressure, not less.
What This Means Going Forward
Nothing has become simpler. Everything has become faster.
The AVOID Act exposes habits that already carried risk and forces claims professionals to confront them earlier, with fewer opportunities to correct course.
This series will examine where those risks most often arise and how disciplined adjusters can adapt without over-defending or overpaying.
The law did not change, but the clock did.
Thank you for reading the first article in this AVOID Act series. In the next article, we will examine why additional insured coverage and contractual indemnity are frequently confused and why that confusion carries greater consequences under the AVOID Act.
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