The State of the New York Insurance Market

Enacted in 1885, New York Labor Law § 240(1) was created to grant construction workers a legal avenue to recover for injuries resulting from workplace accidents which were on the rise at the time since worker safety was not a priority and modern safety equipment did not exist.  Similar laws were passed by other states with the same goal but have since been modified or repealed with New York now the only state with a strict liability statute such as Labor Law § 240(1) on its books.

• The expansion of Labor Law § 240(1) has coincided with a significant rise in verdict and settlement values for New York construction claims which has been amplified by the backlog in the court system and trials continuously postponed due to COVID-19.

• The expansion of Labor Law § 240(1) has coincided with a significant rise in verdict and settlement values for New York construction claims which has been amplified by the backlog in the court system and trials continuously postponed due to COVID-19.

• The rise of “nuclear” verdicts has coincided with a drastic increase in settlement values in Labor Law cases. (8 of the top 20 personal injury settlements in 2021 involved Labor Law claims.  Settlements in those cases averaged about $4.9 million and ranged from $3 million to $11 million).
• Third-party litigation funding and predatory lending has also gotten worse in recent years resulting in large liens/payments owed to lenders.
• Information from WTW’s carrier partners reflects an increase in both claims frequency and severity over the past five years, with settlements doubling in value. A typical Labor Law 240(1) claim will settle for above $1 million. Where a neck or back surgery is involved, the claim value is between $2 million -$3 million or more.

Successful risk transfer, loss control measures and claims management practices are critical for attracting underwriting/carrier support on your future projects and the favorable negotiation of terms and pricing.