HABITAT Magazine
There are many reasons why New York City co-op and condo boards face staggering increases in their insurance costs. But the one most boards love to hate is the state’s one-of-a-kind Scaffold Law, which holds general contractors and property owners, including co-op and condo boards, fully liable for gravity-related injuries on construction sites.
For years the law, which has the staunch support of construction unions and trial lawyers, was seen as untouchable. “We didn’t even say the S word,” Travis Wattie, a vice president of government relations at the Association for Independent Insurance Agents, tells Crain’s. “It was just a nonstarter.”
Finally, that is beginning to change.
Supporters of reforming the Scaffold Law feel emboldened by the shift in opinions around housing construction in New York, along with the state’s recent reforms to auto insurance. Wattie indicated that reform conversations haven’t seen this much momentum in more than 10 years. Back then, hopes of reform were quashed by former Gov. Andrew Cuomo, who told Crain’s at the time that “you can’t change the Scaffold Law.”
Well, maybe you can.
The administration of Gov. Kathy Hochul has acknowledged that proposals to reform the law are on state officials’ radar. The administration of Mayor Zohran Mamdani has also started speaking with stakeholders about potential insurance reforms. In fact, a presentation by the city Department of Housing Preservation and Development outlines a legislative package that would include reforming the Scaffold Law to create comparative liability, where legal responsibility is divided among parties. The presentation also floated capping damage awards to plaintiffs and requiring disclosures of third parties who fund personal injury cases, two more factors contributing to rising insurance costs.
And it isn’t just co-ops and condos that are suffering. Enterprise Community Partners, a national housing nonprofit overseeing roughly 200 properties in New York, released a report this week underscoring how insurance costs have ballooned in recent years and how potential policy changes, including reforming the Scaffold Law, could address it. The group analyzed its own portfolio, finding that insurance costs have jumped 169% between 2018 and 2025.
Trial lawyers, predictably, are not warm to the idea of reforming the law.
“If the Scaffold Law were changed it would erode worker safety across the state in a dangerous and unnecessary way,” said Josh Kelner, an attorney and member of the New York County Trial Lawyers Association.
Construction unions have also historically opposed reforming the law, viewing such efforts as a threat to worker safety. In previous years, leaders of the state AFL-CIO referred to reform proposals as “putting dollars over lives.”
The Building Trades Employer Association released a report last year that insurance costs were two to five times higher in New York compared to other states, none of which have an absolute liability standard.
Wattie, whose group represents insurance brokers and agents, noted that some insurance carriers have clauses that prohibit writing policies in New York, thus shrinking the pool of potential underwriters and putting added upward pressure on premiums.
“What my members face is a very challenging marketplace,” he says, “where it’s hard to find the coverage, and when they do, it is staggering.”