New York Construction Insurance and the Scaffold Law Controversy

According to most real estate developers and construction executives, an arcane New York state law has dramatically driven up the cost of construction insurance in New York. Apparently this law foists the liability for construction accidents solely on the builder, and they claim that it acts as a deterrent for worker safety.

Furthermore, opponents of the law now say they have proof of its ill effects on both the industry and the economy. A study conducted jointly by the Cornell University Department of Policy Analysis & Management and State University of New York (SUNY) Nelson A. Rockefeller Institute of Government, paid for by the nonprofit New York Civil Justice Institute, concluded that the law has resulted in more accidents and has cost the construction and real estate industries billions of dollars.

Study points out flaws in the law on New York construction costs

The study found that New York state has 667 more construction accidents per year on average because of the rule, and that it incurs as much as $3 billion a year in additional costs. This means that if you’re a contractor, you will likely benefit from the law’s repeal.

Proponents of the law, which includes Paul Fernandes, chief of staff of the Building and Construction Trades Council of Greater NY, believe that rescinding the law will only weaken responsibility for workplace safety and health. Fernandes said, “We’ll put this on the shelf next to the rest of the research in this decade-long campaign against scaffold safety that has later been proven to be completely false.”

This “Scaffold Law”, known as Labor Law 240, according to its opponents, mandates that a construction contractor or developer who holds a New York construction insurance policy for a job be solely responsible for any injuries suffered by workers on that project. But critics say the law is problematic, as it excludes workers from any responsibility for an accident they suffer, even when they are carrying out work improperly or with disregard to safety procedures, driving up the cost of construction insurance in New York.