(The Center Square) — New York’s “scaffold law” is driving up insurance costs and draining billions of dollars from the state’s economy, according to a new trade industry report, which is renewing calls for reform.
The analysis released Wednesday by the Building Trades Employers’ Association said the law, which dates back to 1885, continues to impose “absolute liability” on New York property owners and contractors for injuries on construction sites, which has caused insurance rates to “skyrocket” in recent years.
On average, insurance costs in New York are 200% to 500% higher than other states because of the law, according to HR&A Advisors, a New York City-based consulting firm that produced the report for the trade group.
“For decades, New York’s insurance law has pushed construction budgets to the brink, forcing developers – and public authorities like the MTA – to waste billions on premiums that don’t make construction work any safer and are a driving force behind the affordability crisis that is crushing our state’s economy,” Elizabeth Crowley, the group’s president and CEO, said in a statement.
Crowley urged New York City Mayor-elect Zohran Mamdani to make good on his campaign pledges to target the high cost of insurance in the city as part of broader plans to increase housing and expand the city’s economy. She said the reforms would reduce the cost of Mamdani’s affordable housing plan by about $8 billion.
The report said the rising construction insurance rates are also hurting the state’s economy by driving up the cost of housing, schools and infrastructure. It has also resulted in “significant fraud” as staged accident suits have flooded the courts, according to the report.
Meanwhile, the report’s authors cited government data also showing that New York construction workers “are no safer” than those in neighboring states with a comparative liability standard that restricts construction-related lawsuits.
In 2023, New York City’s construction fatality rate of 11.6 per 100,000 workers, and New York State’s rate of 10.4, significantly exceeded the national average of 9.6, according to the report.
The report’s authors detailed several “real world” examples of major New York construction projects they claim could have saved money without the “scaffold law” driving up insurance costs.
That includes the Penn Station redevelopment project, which could have saved up to $560 million, enough to support up to 1,500 new jobs and $300 million in wages. A project to upgrade the 2nd Ave subway could save up to $550 million, generating over $710 million in new economic activity, the report claimed.
“This latest report further confirms what we’ve known for a long time: because of the Scaffold Law, New York is one of the most expensive places on earth to build,” said Tom Stebbins, executive director of Lawsuit Reform Alliance of New York. “It’s time for lawmakers in Albany to stand up to the billboard lawyers’ lobby and finally fix the law and bring the Empire State in line with the rest of the nation.”
“We can’t afford to upgrade our infrastructure, invest in clean energy, or build more housing if already scarce resources are wasted under this archaic law,” Stebbins added. “Every dollar spent on liability is a dollar not spent on making New York more livable and affordable.”
