Buffalo News: Another Voice: After auto insurance reform, Hochul should target construction insurance

By: Elizabeth Crowley

Albany doesn't hand out wins like this often. Gov. Hochul just defeated one of the most powerful special interests in state government − the New York State Trial Lawyers Association − to deliver historic auto insurance relief for millions of New Yorkers.

Next, she should take them on again to reform the Scaffold Law so we can make building everything from housing to schools to public transit projects more affordable.

Mundane as it may seem, there’s no doubt that auto insurance reform stands tall among the many wins for New Yorkers in this year’s budget. For decades, staged crashes and outright fraud alone have been inflating everyone's premiums by as much as $300 per year.

New York's affordability crisis has been quietly fueled by a legal system that rewards frivolous lawsuits, invites fraud and abuse, and pushes legal costs 67% beyond the national average. Nowhere is this more destructive than in construction insurance, where the Scaffold Law drives premiums to levels up to 500% higher than other states. 

The numbers are irrefutable. In most of the country, insurance accounts for roughly 2% to 4% of total construction costs. In New York, the Scaffold Law drives that figure to 10%. This is an invisible tax on every building that goes up in this state − costs that flow directly into higher rents, stalled affordable housing developments and ballooning price tags on critical public infrastructure.

The root cause is a liability framework that emboldens bad actors. Under the Scaffold Law, contractors can be held fully responsible for damages regardless of their actual share of fault − the same kind of legal loophole that ambulance chasers and third-party litigation funders have exploited for years.

One simple reform − moving to a comparative negligence model where liability is shared based on fault, as every other state in America already does − would unlock billions in savings currently hemorrhaging into avoidable insurance premiums.

For decades, the New York State Trial Lawyers Association has killed every serious attempt at construction insurance reform in Albany. Hochul just proved she's the first governor with the courage to beat them.

Now it's time to finish the job.

Elizabeth Crowley is president and CEO of the Building Trades Employers’ Association.