New York City, December 14, 2025
New York City’s construction industry is facing a crisis due to skyrocketing insurance premiums driven by the state’s Scaffold Law. This law imposes absolute liability for gravity-related injuries, resulting in insurance rates that have tripled since 2010. As costs escalate, construction projects are becoming more expensive, hindering economic growth and the availability of affordable housing. Industry leaders are calling for reforms to alleviate the financial burden on construction, but substantial changes to the law have yet to be implemented.
The Insurance Squeeze: New York’s Construction Crisis
New York City, December 14, 2025 – New York’s construction industry is grappling with escalating insurance premiums, a situation that is significantly impacting project costs and economic growth. The primary driver of this crisis is the state’s “Scaffold Law,” which imposes absolute liability on property owners and contractors for gravity-related injuries on construction sites. This law has led to soaring insurance rates, with premiums for multifamily rentals increasing by an estimated 26% annually, even as coverage options narrow and availability declines.
Impact on Construction Projects
The surge in insurance costs is causing significant financial strain on construction projects. For instance, the cost to insure a $100 million project has tripled since 2010, rising from 4% in 2010 to 8.5% in 2020, and reaching a staggering 12% in 2024. This escalation is not only inflating project budgets but also deterring new developments, thereby hindering economic growth and the availability of affordable housing in the state.
Legal and Economic Factors
The Scaffold Law, enacted in 1885, holds employers and property owners fully liable for injuries resulting from falls at high elevations, regardless of fault. Critics argue that this absolute liability standard has led to increased litigation and higher insurance premiums, making New York the only state with such a law. Additionally, the prevalence of third-party litigation funding has contributed to a “lawsuit culture,” further driving up insurance costs.
Calls for Reform
Industry leaders and policymakers are advocating for reforms to the Scaffold Law to alleviate the financial burden on the construction industry. Proponents of reform argue that millions of dollars could be saved in state and municipal budgets and infrastructure costs. However, efforts to amend the law have faced significant challenges, and as of now, no substantial changes have been implemented.
Conclusion
The escalating insurance premiums in New York’s construction sector are a multifaceted issue, primarily driven by the Scaffold Law and compounded by economic and legal factors. Addressing this crisis requires a comprehensive approach, including potential legal reforms and strategies to mitigate litigation costs, to ensure the continued growth and sustainability of the state’s construction industry.
Frequently Asked Questions (FAQ)
What is the Scaffold Law?
The Scaffold Law is a New York State law that holds employers and property owners fully liable when an employee becomes injured due to a gravity-related fall while working at high elevations without proper safety equipment.
How has the Scaffold Law affected insurance premiums?
The Scaffold Law has led to increased insurance premiums in New York’s construction industry. For example, the cost to insure a $100 million project has tripled since 2010, rising from 4% in 2010 to 8.5% in 2020, and reaching a staggering 12% in 2024.
What are the calls for reform?
Industry leaders and policymakers are advocating for reforms to the Scaffold Law to alleviate the financial burden on the construction industry. Proponents argue that millions of dollars could be saved in state and municipal budgets and infrastructure costs.
Key Features of the Issue
| Feature | Description |
|---|---|
| Scaffold Law | New York State law imposing absolute liability on employers and property owners for gravity-related injuries on construction sites. |
| Insurance Premiums | Significant increase in insurance premiums for construction projects, with costs tripling since 2010. |
| Economic Impact | Rising insurance costs are inflating project budgets and deterring new developments, hindering economic growth and affordable housing availability. |
| Legal Factors | Absolute liability standard and third-party litigation funding contributing to increased litigation and insurance costs. |
| Reform Efforts | Advocacy for reforms to the Scaffold Law to reduce financial burdens on the construction industry, though no substantial changes have been implemented. |
Now Happening on X
- @TheBlackChron (Dec 10, 2025): A new report highlights how New York’s Scaffold Law is increasing insurance costs and draining billions from the state’s economy. View on X
- @amNewYork (Dec 10, 2025): New York’s Scaffold Law is costing billions on MTA and other construction projects, leading to job losses and delays in affordable housing development. View on X
- @LawsuitReformNY (Dec 8, 2025): New York’s absolute liability Scaffold Law is driving up insurance premiums by as much as 10%, adding significant costs to construction projects. View on X
- @LawsuitReformNY (Dec 9, 2025): The Scaffold Law is estimated to add $8 billion to federally funded construction projects in New York over the next five years, prompting calls for reform. View on X
- @Newsday (Dec 10, 2025): Reports reveal a network of law firms and medical professionals exploiting New York’s Scaffold Law through staged accidents and frivolous lawsuits, impacting construction costs. View on X
- @bilbospizza (Dec 11, 2025): New report shows New York’s Scaffold Law is taxing public projects like the MTA with billions in extra costs due to higher insurance. View on X
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