(DeWitt, New York, Feb. 13, 2014) — Amid growing momentum for reforms to New York’s so-called scaffold law, the Independent Insurance Agents & Brokers of New York is making the issue its top legislative priority for 2014.
New York’s oldest insurance producer trade association called for action on the controversial law in its 2014 legislative position paper. Calling the law “antiquated,” the paper noted that it has made contractors’ liability insurance expensive and difficult to obtain. “In these difficult economic times,” the paper said, “any law driving up business costs and preventing job growth needs to be carefully examined.”
Sections 240(1) and 241(6) of the state’s Labor Law, commonly known as “the scaffold law,” apply to construction worker injuries that result from falling from heights or being struck by falling objects. The law makes construction project owners and contractors absolutely liable for these injuries. Legal precedents leave owners and contractors with very limited defense arguments in such cases. Often, they cannot successfully cite an injured worker’s conduct that may have contributed to the accident. New York is the only state in the country that still has such a law.
The cost of legal settlements courts have imposed under this law can be very high. For many years, construction firms in New York have pointed to the law as a drain on the state’s economy and the cause of high liability insurance premiums. Lawmakers have shown little interest in addressing the issue, but that may be starting to change. Newspaper editorials are questioning its economic effects; hundreds of contractors visited the State Capitol this week to argue for reform; and Gov. Andrew Cuomo said yesterday that he is open to discussing reforms.
IIABNY members from across the state will gather in Albany on March 25 for the association’s annual Legislative Day (also called “L Day”). They intend to discuss several issues with members of the Assembly and Senate that day. Scaffold law reform will be the first priority, but others include:
The abuse of certificates of insurance, which are one-page documents that summarize an organization’s insurance coverage. In recent years, third parties have often demanded that certificates change the coverages that the policies listed on them provide. This use of certificates violates the insurance laws in every state in the U.S. The New York Legislature passed a reform bill last year, but Gov. Cuomo vetoed it in December.
Defining a standard event for all insurance companies to use before they apply high hurricane deductibles. Deductibles are amounts a homeowner must pay out of pocket before the insurance company pays. Special hurricane deductibles apply to homes located in the New York City metro area and Long Island. They range from one to five percent of the amount of insurance on a home.
Unfortunately, different homeowners insurance policies apply these deductibles for different events. For example, one company may charge the hurricane deductible if a Category 1 storm hits, while the company insuring the home next door may charge it only for Categories 2 or higher. This could lead to insurance buyers feeling that their insurers have treated them unfairly. IIABNY supports setting one standard trigger for all companies to use and allowing the market to decide the proper size of the deductible.
Creation of a state catastrophe pool, funded by insurance companies, that will help cover the cost of future severe weather events. The pool would help ensure that harsh storms will not drive insurers into bankruptcy. Hurricane Andrew in 1992 left several insurers in Florida unable to continue in business.
Improved regulatory oversight of the New York State Insurance Fund. The State Insurance Fund is New York’s largest single provider of Workers’ Compensation insurance.
The Independent Insurance Agents & Brokers of New York, Inc. has represented the common business interests of independent insurance professionals since 1882. More than 1,750 agencies and their 13,000 plus employees currently rely on the DeWitt, New York-based not-for-profit trade association for legislative advocacy, continuing education and other means of industry support. In addition, most IIABNY members proudly identify themselves as Trusted Choice® agents and brokers, a national consumer brand uniting more than 21,000 independent agencies across the United States. For more information, go to www.trustedchoice.com or www.iiabny.org.