New York Laws
Article 2 - Mechanics' Liens
4-A - Insurance Proceeds Liable for Demands.

§ 4-a. Insurance proceeds liable for demands. Owner, contractor or
subcontractor diverting proceeds, guilty of larceny. The proceeds of any
insurance which by the terms of the policy are payable to the owner of
real property improved, and actually received or to be received by him
because of the destruction or removal by fire or other casualty of an
improvement on which lienors have performed labor or services or for
which they have furnished materials, shall after the owner has been
reimbursed therefrom for premiums paid by him, if any, for such
insurance, be subject to liens provided by this act to the same extent
and in the same order of priority as the real property would have been
had such improvement not been so destroyed or removed.

The proceeds of any insurance which by the terms of the policy are
payable to a contractor or subcontractor, and actually received or to be
received by him because of the destruction or removal by fire or other
casualty of an improvement on which he has performed labor or services
or for which he has furnished materials, shall, after such contractor or
subcontractor has been reimbursed therefrom for premiums paid by him, if
any, for such insurance, be liable for the payment of demands for labor
or services performed or materials furnished by his order and for which
he is liable, in the same manner and under the same conditions as
payments to him under his contract would have been had such improvement
not been so destroyed or removed.

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