Insurance companies and construction businesses are in open war with trial lawyers and labor unions over New York's 129-year-old "Scaffold Law," which institutes absolute liability on contractors if an employee is injured or killed on the job.

The law, put in place in 1885, was drafted to protect construction workers in high-elevation situations (at the time the tallest skyscraper in New York City was a 281-foot spire at Wall Street's Trinity Church), and made contractors liable in gravity-related accidents, such as falling from a platform.

Over the past few decades, the law has seen a number of reforms by courts who have included falling objects and required safety implementations, but it's also put into place a number of safeguards for construction companies that had feared employees could get a pass by filing a lawsuit and reaping millions, such as requiring workers to prove that an accident was safety-related.

But the absolute liability clause remains problematic for insurance groups that argue the law is antiquated and needs to be reformed to give contractors the ability to prove that construction employees may have also been at fault during an accident.

"Right now if there's an elevation related injury, the fault of the worker is never considered and that's a problem," Kristina Baldwin, vice president of state government relations at Property Casualty Insurers Association of America (PCI) tells PC360. "The responsibility of all the parties should be able to be considered."

Raising rates

The absolute liability clause has forced insurance companies to refuse business in New York City, dramatically raising insurance premiums for construction sites, according to insurance groups. Such is the case for New York City's School Construction Authority (SCA), which this past year saw insurance rates increase triple to $240 million for school construction projects, according to business news outlet Crains.

The SCA also projects that in five years, insurance coverage will cost them nearly $650 million by 2019, according to an agency report.

"The reason why companies can't underwrite this business, if someone is found 1% at fault you gotta pay everything," says Senior Vice President for State Affairs for American Insurance Association (AIA), Joe DiGiovanni. "If you're an insurer, you lose pretty badly."

However, proponents of the law argue that it has kept owners and contractors in check with safety standards and should have no fear of being held liable as long as they maintain safety standards.

"Employers can't be held liable under the law as long as they provide the equipment necessary to keep construction workers safe," says Josie Duffy, policy advocate at the Center for Popular Democracy (CPD).  

Dangerous work

Rising evidence shows construction jobs are the most dangerous jobs in New York City, with more deaths per year than any other field. But reports have also showed disparities in how many minorities die each year in gravity-related construction accidents, according to the CPD and other advocate groups.

A report released last year by the CPD used Occupational Safety and Health Administration (OSHA) reports on fall-related deaths in New York City between 2003 and 2011, showing that 60% of falls were Latino and immigrant workers. It's among a handful of reports that have shifted the reform argument from a problem of insurance costs to a civil rights issue, where a number of leaders claim the Scaffold Law is protecting minority workers.

"Minority construction workers are more likely to die on the job because they are more likely to work for smaller, non-union firms that may shortcut safety for the sake of cutting costs," Assemblyman Francisco P. Moya tells PC360. "Dismantling the Scaffold Safety Law would have a disproportionately large impact on minorities and immigrants."

But turning the law into a civil rights case is just a tactic to get away from the real issue, and there's no proof that reforming the law would hurt minorities, says Marc Craw, vice president of the New York Insurance Association (NYIA).

"The law is neutral, objective and all workers are treated equally," Craw tells PC360.

"We don't think that reforming the scaffold law will make the worker less safe," says Baldwin. "All we're proposing is a comparative negligent system. Employers are not going to reduce employee safety measures because they'll still be on the hook if negligence is proven."

New legislation

A number of legislative bills trying to strengthen the law have been put in front of the New York Assembly and Senate, including Moya's bill which would require transparency into how much insurance companies pay out to see if the Scaffold Law actually causes rate increases, as insurance companies say.

"Scaffold Safety Law opponents claim that the law drives up insurance rates, but the fact is—we simply don't know if that's true. We don't know how insurance companies set their rates, and we don't know if the Scaffold Safety Law is actually causing rates to rise," says Moya.

"The Moya bill is nothing but a diversionary tactic," says DiGiovanni. "It says rather than talk about the issue, let's bang on the insurance companies."

And the sentiment is shared across insurance groups.

"They want to know about salary, insurance advertising costs. It's almost ludicrous the amount of information they're requesting," says Baldwin. "Not only are they requiring to file the past 10 years, but they're also requiring to make it public and put it on a website. There is obviously information we wouldn't want put out within that breadth."

Insurance groups have pointed to the large amount of settlement payouts in 2012 and 2013, when over half of settlements each year were based around the Scaffold Law, as added proof that the Scaffold Law is too costly. However, according to court documents obtained, each case with large payouts over $2 million had proven severe negligence on the part of the construction company or owner.

 "Without the Scaffold Safety Law, construction deaths and injuries would increase," says Moya. "The Scaffold Safety Law saves lives. Period."