The Construction Insurance Transparency Act (S.465/A.5980) | 2019

February 26th, 2019

Enacts the “construction insurance transparency act of 2019

S.465 (Lanza)/A.5980 (Bronson)

MEMORANDUM IN OPPOSITION

Unshackle Upstate, a non-partisan, pro-taxpayer, pro-economic growth, education and advocacy coalition made up of business and trade organizations from all parts of Upstate New York, opposes this legislation.

If enacted, this bill would mandate all insurers that issue liability insurance policies covering contractors or property owners against claims made under Labor Law § 240 (the Scaffold Law) to annually report 16 different types of information to the state Department of Financial Services (DFS).

While the sponsors purport that the intent of S.465/A.5980 is increasing transparency in the construction insurance industry, in truth this legislation is intended to serve as another distraction from reforming the state’s antiquated and unnecessary Scaffold Law.

The problem is not a lack of information. It is that most insurance companies no longer offer contractors or property owners liability insurance that include Labor Law § 240 coverage, and those that still do have increased premiums by 300 to 600 percent. It’s yet another high cost of doing business in New York that makes us uncompetitive with other states. The state Builders Association has estimated that higher liability insurance costs related to the Scaffold Law add $10,000 to the cost of a house in Buffalo, $7,000 to one on Long Island and $6,000 to one in Albany.

New York is the only state in the nation that imposes strict liability on contractors for worker injuries resulting from falls. The law was enacted in 1885 to protect people working at great heights in the skyscrapers of New York City. Employers are often held liable for falls despite any misconduct or mistakes by workers, from failure to use a safety device or even showing up for work intoxicated. The question is not whether employers will pay but how much.

Unshackle Upstate supports Scaffold Law reform, specifically legislation to apply a comparative negligence standard (liability proportional to fault) under the Scaffold Law in situations where a worker’s injury is caused by a failure to follow safety training, intoxication or commission of a crime.

For these reasons, Unshackle Upstate opposes the enactment of this legislation and supports commonsense reforms to the Scaffold Law in New York State.