N.Y. Lien Law § 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.