Something to be Thankful for

Two weeks before Thanksgiving, I drove to Glenmont PIA headquarters for our committee and board days. On the way up, I crossed the Tappan Zee Bridge. For anyone who hasn’t driven over the bridge recently, it’s amazing to see the cranes, the pilings going in and the amount of progress being made on this construction project: I could see the caissons being placed and the big cement barges out on the Hudson Rive and it’s apparent that we’ll see a new structure soon.

My insurance background immediately drew my attention to the huge worker injury exposure for the Tappan Zee project. Considering the significant barge work, there will be maritime law exposures in addition to the regular workers’ compensation expense. Employers’ liability and general liability premiums can expect to absorb $200-$400 million in extra costs due to Labor 240/241(a) claims.

That’s a really scary thought.

I’ve heard reports that the current toll to cross the bride, which is now $5, will be raised to $15. And, who knows how many tax dollars will go into overruns for this project? We do know who pays those taxes: you and me.

My second thoughts were about Governor Cuomo and the $5 billion wind- fall to the State of New York. He certainly has lived up to his promise to turn New York State’s deficit around. Where once our state faced an enormous fiscal shortfall, this year we will see a $5 billion profit, due largely to settlements with banks and insurance companies. There are a lot of state agencies that will scramble for a piece of that pie and I’m sure the New York State Thruway Authority will get a slice to pay for the cost of the bridge.

However, the construction of the Tappan Zee serves as yet another reminder: That New York is the only state in the union to have a law like 240/241(a). The labor law must be revised. It’s costing our state’s businesses and taxpayers untold millions of dollars in unnecessary fees and premiums.

Most of us recognize this unique rule stands thanks to the trial bar and members of the Assembly, which are supported with trial bar contributions. The trial bar lobby is so strong that last year, the top 127 donors gave $16.8 million to their PAC. And, that’s just a drop in the bucket. When you look at the amount raised by the major agents’ associations, the total combined PAC is under $150K. It’s easy to see what an uphill battle we face in this case. We all know the reasons the labor law must be changed, but this is an issue where money talks and common sense is thrown out the window.

While we’re considering the Tappan Zee Bridge and all the contractors and tradesmen who are, or will be, working on it shortly, take a moment to imagine all the certificates of insurance that are associated with this project. We have seen certificates that list coverages, endorsements and forms that are not actually on their insureds’ policies. We’ve heard nightmare stories, like the well-publicized crane col- lapse that took place in New York City a few years ago. When an accident and associated claim occurs, everybody suddenly starts running around wondering why proper coverage was not in place. The certificates of insurance issue has dogged agents and contractors for years.

PIA has been working hard to address this issue for years. I’ve written before about the ACORD 855 addendum form, and the association’s numerous meetings with the Department of Financial Services to see whether enforcement measures against inappropriate use of certificates can be enacted and strengthened. I’m happy to say that both—the New York State Assembly and the Senate—passed bills that regulate certificates. In 2013, similar legislation was vetoed by the governor. This year, the association and lawmakers again passed a bill, which addressed concerns the governor cited in his last veto. As I write this column, the week before Thanksgiving, the bill has not yet been sent to the governor’s desk for signature. We hope Governor Cuomo will do the right thing and sign the law.

I commend all the PIA members who have sent letters to our governor in support of this bill. We need a strong push for him to see how important addressing the certificates issue is to so many people. If you have not yet sent a letter, I urge you, regardless if you are a member or not, to go to the PIA Website, see the sample letter and send yours in.

For years, I have heard about abuses caused by certificates. Now is our chance to correct the situation. I’m asking every- one now to step up to the plate. There is no reason remaining for the governor to not sign it.

The issues of New York’s labor law and certificates of insurance have played a central role in PIA’s legislative efforts for too long. As the association met and discussed the issues on which we plan to work for the up- coming year, we all voiced a desire to get these priorities done, and move on. It certainly would be something to be thankful for.