Builders and insurers alike are calling for an end to a 19th century New York State statute that keeps construction insurance premiums at roughly double the cost of those in nearby states, Crain’s reported.
The statute, known as the scaffold law, is expected to add tens or even hundreds of millions of dollars to the $1.5 billion project to replace the Goethals Bridge. It is also expect to add some $200 million dollars in insurance costs to the $3.9 billion Tappan Zee bridge project, according to Kevin Dolan, a senior vice president at Alliant Insurance Services.
New York’s scaffold law is in fact the only one of its kind on the books anywhere in the United States. It states that if a worker is injured on a construction site by a fall on faulty scaffolding the contractor is liable, even if the worker could be considered responsible.
That, combined with insurance rates that ballooned 200 percent to 400 percent in the second quarter of 2012, according to numbers from the Associated General Contractors of New York, has spurred renewed lobbying efforts to overturn the law in Albany.
The Real Estate Board of New York has organized a special committee to study the scaffold law — construction insurance now accounts for nearly 12 percent of total building costs — as has the contractors’ association. And the Greater New York Construction User Council has also organized a meeting to build lobbying support.
“We could build another two or three schools a year for all the extra money we’re spending on insurance,” Ross Holden, general counsel at the New York City School Construction Authority, said.
However, both labor unions and trial lawyers support the law and insist that the contractors have nothing to fear as long as they are keeping their work sites safe.
“To the extent that they are losing these cases, it’s because they absolutely didn’t do their job and failed to protect workers,” Paul Fernandes, chief of staff at the Building and Construction Trades Council of Greater New York, said. [Crain's] –Christopher Cameron