Scaffold Law Bumped This Project’s Insurance Tab by 557 Percent

Insurance brokers for the city’s co-op and condo boards have joined the never-ending battle to repeal New York State’s so-called Scaffold Law. The only law of its kind in the nation, it places full liability for a worker’s gravity-related injury on building owners and contractors, even if others share blame for the accident. Boards that fail to secure adequate indemnification clauses in their insurance policies leave themselves open to millions of dollars in damages. In addition, the law has caused construction and building maintenance costs to soar. 

Consider the East Side Access project. Documents from the Metropolitan Transportation Authority's board meeting last week show that insurance costs on this decade-delayed effort to link the Long Island Rail Road to Grand Central Terminal have ballooned 557 percent, Crain’s reports. 

The MTA acquired a $93 million policy in 2002, when it projected it would complete the digging and track work by 2010. As that deadline has been extended by a decade, the coverage package has swelled to $584 million. 

Upon hearing the news, opponents of the Scaffold Law were quick to point fingers. "Insurers, it has been documented over and over, have left the market because of the Scaffold Law," says Tom Stebbins of the Lawsuit Reform Alliance of New York (LRA), a tort-reform group. "These are billion-dollar policies and people don't want [to sell] them. That should tell you something." 

With the support of co-op and condo advocates, the LRA has long pushed, without success, for amending the law to allow for "comparative negligence" – that is, apportioning blame to everyone (worker, contractor, property owner, ladder company, etc.) for their role in causing the injury, rather than have all the financial liability fall to the building owner and contractor. 

The infrastructure-boosting Regional Plan Association has echoed this call, citing studies that found the statute increases construction costs by an average of 7 percent. The association's president and CEO, Tom Wright, argued that Albany's special interest-dominated culture is the reason New York is the only state in the nation with a Scaffold Law.