New York Scaffold Law: Time for a facelift?

Posted by John Cofini on Tue, Jan 07, 2014 @ 03:38 PM

A decades-long battle over New York’s Scaffold Law is heating up again.

Enacted in 1885 as skyscrapers increasingly dotted city skylines, the law was intended to protect construction workers from the growing dangers of working at greater heights.

Supporters argue that the law is essential to ensuring workers’ safety in some of the world’s most dangerous jobs, especially those employed by contracting firms that cut corners to save money. The law holds developers and contractors accountable for keeping job sites safe.

But opponents have long argued the law is outdated and prejudicial against contractors and property owners.

When a worker is injured, contractors and owners are liable. The law says nothing about worker responsibility (though the plaintiff still has to prove there was a violation of the law’s standards and that the violation caused his or her injury). Even when an injured worker is 99% to blame for the accident – such as being intoxicated or ignoring safety regulations – the developer is 100% responsible for the costs.

And with awards ranging from $3 million to $15 million in 2012, the stakes are only getting higher.

Those mushrooming payouts, opponents argue, are a goldmine for a growing cottage industry of attorneys. Huge settlements have wasted millions of taxpayer dollars, pushed insurance premiums through the roof, driven many smaller contractors out of business, and cost thousands of jobs. They say the current situation makes it virtually impossible for even the most conscientious builders to defend themselves in court, and it severely hampers construction and the state’s economic growth.

Public works projects feel the crunch too

The soaring cost of liability insurance is also hindering the repair and construction of schools, bridges, roads, and other crucial infrastructure, say critics of the law. The New York City School Construction Authority recently reported that its liability insurance costs for 2014 would be almost as high as they were for the years 2011 through 2013 combined.

Battle lines drawn

A lobby of contractors, property owners, and insurers are renewing their campaign to have the law altered. Pending legislation would replace the standard of absolute liability with the more equitable "comparative fault" standard in cases where an injured worker was intoxicated, violating safety standards, or committing a criminal act. The liability of the defendants, and thus the amount of damages, would be reduced accordingly in these cases.

Supporters of the law – a lobby of unions, workers’ advocates, and trial lawyers – are pushing back just as hard. They argue that this amendment would reduce accountability on job sites and dilute the incentive for property owners and contractors to take necessary safety precautions. They also claim that these changes would have a disproportionate impact on minority and immigrant laborers who are more likely to work for nonunion companies that may not provide proper safety equipment and training.

But opponents point out that because contractors and property owners could still face large payouts for settlements, even if they were found only partly responsible for an accident, the amendment wouldn’t eliminate the motivation to keep workplaces safe.

Is it time for a change?

New York is the only state in the nation with this law, and the cost of insuring construction projects in New York is as much as 10 times higher than in other states. With the future of the state’s construction industry at stake, let’s hope both sides can find a solution.

When you need help navigating through the maze of New York construction insurance requirements, talk to the experts at BNC Insurance and Risk Advisors. Also, download our construction case study collection to see how we’ve solved risk management issues for contractors like you!

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Tags: New York construction insurance, new york business insurance, new york scaffold law