Crain’s New York: Op-ed: Wrongful death lawsuit bill will hurt minority- and women-owned businesses

By: Kenneth Thomas

Gov. Kathy Hochul recently signed legislation to strengthen New York's minority- and women-owned business enterprises—welcome news for small-business owners across the state. Unfortunately, another bill under consideration by the Hochul administration threatens to dramatically raise the cost of doing business, especially for MWBEs in a higher-risk and capital-intensive industry, such as construction.

Earlier this year the state Legislature passed S.74-A, which will expand the scope of wrongful death lawsuits, leading to a massive increase in the cost of insurance for businesses of all sizes. But as we have seen time and again, small businesses and historically underrepresented entrepreneurs will be the most affected by unintended consequences—notably, MWBEs.

MWBEs already grapple with significant challenges, from institutional barriers to securing financing to a lack of peer-support networks. For construction contractors and developers across New York, there is an insurance availability and affordability crisis due to the state's uniquely problematic liability laws. According to the Institute for Legal Reform, New York already has the costliest liability environment in the nation, which means an expensive and unstable insurance market.

In recent years the pandemic, inflation and a tight labor market have further increased the difficulties facing minority-owned businesses, especially in construction. This bill will only make matters worse. Businesses will be forced to pay higher insurance premiums and will be left with fewer and less robust options for coverage as insurers opt to avoid writing policies in New York altogether.

MWBEs sustain hundreds of thousands of jobs, stimulate local economies and lead the way for the next generation of women entrepreneurs and entrepreneurs of color. If Hochul signs this bill, the resulting insurance increase will shutter many MWBEs for good, reduce access to government projects and damage the economy—ultimately setting back business ownership and economic mobility in these communities.

The impacts of S.74-A will be felt the most by those with the fewest resources; it's this lack of operational, financial and administrative capacity that creates a precarious arena for MWBEs to navigate. This bill will only compound those issues.

The governor can continue to be a friend to MWBEs across New York by vetoing this bill—thwarting inflated insurance premiums and preventing a higher barrier from being erected because of shortsighted legislation.

Kenneth Thomas is a co-founder and board member of the Minority and Women Contractors and Developers Association.