An employer/owner of a roofing company allegedly defrauded his insurance company of over $107,000 in workers compensation premiums by misclassifying his workers on insurance policies.
The individual was arraigned in Hampden Superior Court and charged with two counts of workers compensation fraud and 4 counts of larceny over $250. He pled not guilty and was released on personal recognizance. (WCxKit)
The Attorney General’s office began an investigation after the matter was referred by the Massachusetts Insurance Fraud Bureau (IFB), which initially learned of the man’s activities from AIM Mutual Insurance Company (AIM). Investigators discovered during a four-year period the man allegedly misclassified his workers as carpenters, instead of roofers, in order to avoid paying higher workers comp insurance premiums.
Proper insurance premiums are calculated by the Workers’ Compensation Ratings and Inspection Bureau (WCRIB) which provides these rates based on the risk exposure of work conducted.
Authorities allege the man classified his workers as performing less risky work (as carpenters) in order to avoid paying a higher amount of workers comp insurance premium if he correctly classified them as roofers, a higher risk job classification. (WCxKit)
Authorities said the man told his insurance company he had a carpentry business and that any roofing was subcontracted to other businesses. IFB investigators discovered the man had employed full-time roofers since his first policy with AIM in May 2004 and, as a result of his fraudulent activities, he defrauded AIM of over $107,000 in workers comp premiums.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: Info@ReduceYourWorkersComp.com or 860-553-6604.
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
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