About The Law

New York State Labor Law sections 240/241 – better known as the Scaffold Law – presents a serious threat to the construction and development industries throughout the State. The statute imposes absolute liability for gravity-related injuries that occur on construction work sites on the contractors and property owners – regardless of the circumstances. 

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School Construction Authority

Without reform, over 800 certified minority and women owned businesses (M/WBEs) currently under the School Construction Authority’s owner controlled insurance program will be left without general liability insurance as of December 31, 2013. Most – if not all – of these firms will be unable to afford their own insurance, which will endanger billions of dollars of construction contracts and countless jobs.

NYC School Construction Authority Insurance Costs

 

Currently the New York City School Construction Authority (SCA) operates a wrap-up insurance program, at a cost of $100 million annually. 

Although their number of claims has actually decreased in the current program, the dollar value of individual claims has increased, as has been the industry-wide trend with Scaffold Law claims.

As a result, the SCA’s carrier has sought to end the current wrap-up program early and has indicated uncertainty about participating in a new program going forward.  However, the agency was advised that if there were to be a new program, premium would be in the $125 million range annually—a 25% increase.

It is also important to note that the SCA’s current insurance program is an important component of their highly successful MWBE mentor program.  If their current insurance program were to end, it is highly likely that their MWBE mentor program would, too.  Were that to happen, many of the MWBE firms that rely on the current program could well go out of business.

At the same time, if the SCA were to construct their program in New Jersey—where labor and material costs are very comparable and the major variable is no Scaffold Law—their insurance costs would be approximately $25 million for the same term.  That is, the total cost of insurance coverage for their program in New Jersey is equal to the likely increase moving forward, if the SCA is able to secure a renewal for their wrap-up program.  The Scaffold Law is costing the SCA an extra $75-100 million a year in insurance costs.

Ave Incurred Claim Costs NY, NJ Joint bridge Projects

Currently the New York City School Construction Authority (SCA) operates a wrap-up insurance program, at a cost of $100 million annually. 

Although their number of claims has actually decreased in the current program, the dollar value of individual claims has increased, as has been the industry-wide trend with Scaffold Law claims.

As a result, the SCA’s carrier has sought to end the current wrap-up program early and has indicated uncertainty about participating in a new program going forward.  However, the agency was advised that if there were to be a new program, premium would be in the $125 million range annually—a 25% increase.

It is also important to note that the SCA’s current insurance program is an important component of their highly successful MWBE mentor program.  If their current insurance program were to end, it is highly likely that their MWBE mentor program would, too.  Were that to happen, many of the MWBE firms that rely on the current program could well go out of business.

At the same time, if the SCA were to construct their program in New Jersey—where labor and material costs are very comparable and the major variable is no Scaffold Law—their insurance costs would be approximately $25 million for the same term.  That is, the total cost of insurance coverage for their program in New Jersey is equal to the likely increase moving forward, if the SCA is able to secure a renewal for their wrap-up program.  The Scaffold Law is costing the SCA an extra $75-100 million a year in insurance costs.

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