NEW YORK (WABC) -- The 7 On Your Side Investigates team has learned about a scam involving fake falls in New York that is costing everyone from construction companies to homeowners and renters.
The owners of several restoration companies in New York City tell Eyewitness News they have been receiving false claims from workers who said they fell while on the job.
"We're finding in some cases they never even worked at the job site," Jeff Heiser, the vice-president of K. Waterproofing, told investigative reporter Kristin Thorne. "They're just looking up permits and job sites and just filing claims."
Steve Katz, the owner of K. Restoration, says he rarely used to get fall claims. But in the last several years, he's getting one or two claims a year.
"I used to pay maybe $300,000 a year in liability insurance," he said. "Now, I pay $2 million."
The contractors have to pass on the cost of the higher insurance premiums to the building owner who then has to pass it along to the homeowner and renter.
"They're paying for it every day," James Fenniman, adjunct professor at St. John's University School of Risk Management, said. "It's a silent tax that they don't know about. So, when you have that rent increase or maintenance increase and it goes up 12%, 4% may have come from the insurance."
Construction industry insiders believe the bogus claims are happening because of a New York Labor Law which dates back to the late 19th century.
New York Labor Law 240 and 241, which was established...
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