New York's Scaffold Law Is Shrinking the Contractor Pool and Driving Up Project Costs
According to Engineering News-Record, New York’s Scaffold Law is doing something its drafters never intended: systematically eliminating the contractors and insurers needed to actually build the projects the state is counting on. Writing in ENR’s East Construction Views blog, attorney Charles “Chip” Pierce of Rosenberg & Estis P.C. argues that the 141-year-old statute has drifted so far from its original purpose that it now actively undermines the construction market it was designed to regulate. Pierce writes in an advocacy capacity as a construction and real estate attorney, and his argument reflects that perspective.
Background
New York Labor Law § 240, commonly called the Scaffold Law, was enacted in 1885 to protect workers from gravity-related injuries on construction sites. According to Pierce, the law imposes absolute liability on owners and contractors whenever a worker is injured in a fall, regardless of fault, regardless of what safety measures were in place, and regardless of whether the worker ignored those measures. That standard applies even if the owner or contractor did nothing wrong.
What makes New York an outlier is that every other state in the country uses a comparative negligence standard, where liability is apportioned based on the actual facts of the accident. New York stands alone in its absolute liability approach, and according to Pierce, the market consequences of that isolation are becoming impossible to ignore.
Pierce draws on a case from his own practice to illustrate the real-world impact. A family-owned roofing contractor with more than 30 years in business was involved in a fatal accident. There was no finding of negligence, but under the Scaffold Law, that didn’t matter. The contractor’s insurer refused to renew coverage, replacement insurance was either unavailable or unaffordable, and the company shut down when the policy expired. Dozens of workers lost their jobs.
On the legislative side, ENR notes that H.R. 3548, the Infrastructure Expansion Act, is currently under consideration in Congress. The bill would introduce a comparative negligence standard to certain federally connected projects in New York, though Pierce describes it as less than a comprehensive fix since it would apply only to federally financed work.
Analysis
The structural problem Pierce describes is a feedback loop that compounds over time. Absolute liability raises claim exposure. Higher exposure raises premiums. Higher premiums thin the field of contractors who can afford coverage to bid. A thinner contractor pool reduces competition. Reduced competition raises project costs. And rising project costs hit affordable housing and public infrastructure first, exactly the segments where margins are already the tightest.
Pierce notes that even non-admitted excess carriers, the insurers the state allows to step in when standard markets retreat, are pulling back. Their policies sometimes include endorsements that exclude injuries caused by falls from heights, which in a Scaffold Law context can render the coverage functionally worthless. Pierce describes this not as a quirk, but as the insurance market clearly pricing the risk and signaling a structural problem with New York’s liability environment.
The state’s housing goals make the timing particularly sharp. According to Pierce, New York has set a target of 800,000 new homes over the next decade. That’s an enormous construction mandate, delivered into a market where the liability environment is already pushing qualified firms out and baking escalating insurance costs into every project budget.
The Infrastructure Expansion Act offers a narrow path forward for federal projects, but the core problem, absolute liability on all other work, remains intact. For subcontractors operating in New York, that means the baseline risk environment doesn’t change on the majority of their work just because Congress acts on a specific funding category.
What It Means for Subcontractors
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Absolute liability is a real underwriting risk, not just legal boilerplate. If you operate in New York, a gravity-related injury claim can result in liability even when your safety program was fully compliant with OSHA standards. Price that into your bids and your risk management planning.
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Insurance availability is tightening in New York specifically. According to Pierce, carriers have been quietly retreating from the market for years. If your renewal is coming up, start conversations early and don’t assume your current carrier or limits will hold.
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Watch for policy endorsements that gut your coverage. Pierce specifically flags non-admitted excess policies that exclude fall-related injuries. Read those endorsements. Coverage that doesn’t respond to the most common Scaffold Law trigger may not be worth the premium.
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The contractor pool is shrinking, which cuts both ways. Fewer qualified firms means less competition on bids, which can improve your pricing position. But it also means owners may push harder on prequalification thresholds and insurance minimums, raising the bar to even get invited to bid.
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Track H.R. 3548. The Infrastructure Expansion Act would shift federally connected New York projects to a comparative negligence standard. If it passes, the risk profile on that category of work changes meaningfully. Subcontractors with federal project exposure in New York should monitor the bill’s progress.
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If you’re bidding affordable housing or public infrastructure in New York, model insurance costs as a line item, not an afterthought. Pierce makes clear that Scaffold Law insurance premiums are a significant factor in whether those projects pencil out at all.
