A Workers’ Comp Scandal

Mark Teich, who runs a plumbing company near Union Square in New York that his father started 65 years ago, wanted to save money on the workers’ compensation insurance he is required to carry should any of his 25 employees get injured on the job. His broker mentioned Poughkeepsie-based Compensation Risk Managers, which administered insurance trusts catering to New York small businesses. CRM offered cheap premiums.

“We joined it because my insurance broker at the time said it would be a lot more economical for us,” says Teich, president of M&T Plumbing & Heating Co. “Had I known then what I know now, I never would have gotten involved.”

Over nearly three years, beginning in 2002, Teich paid more than $147,000 in premiums to CRM. But he was dissatisfied with the value he was getting: He had only one injured worker and one claim, for $2,136. He canceled his insurance with CRM and didn’t give the company another thought until last year, when he learned that the state was accusing its execitves of fraud.

Full article here.