FOR RELEASE: MEDIA
CONTACT:
June 25, 2003 (#076)
Norman D. Williams
(916)
492-3566
MEDIA STATEMENT
COMMISSIONER GARAMENDI WARNS EMPLOYERS
OF BOGUS WORKERS' COMP INSURANCE
SACRAMENTO - "Bogus workers' compensation insurance is a serious and growing threat to employers in the State of California. An alarming number of reports indicate that unscrupulous firms are using the dire situation in this broken workers' comp system to entice employers with sales pitches that seem too good to be true. Unfortunately, they are too good to be true.
My Department is investigating the mounting complaints of those who are victimized by this sham. With premiums at historic highs, businesses too often reach for the first seemingly affordable coverage offered. By the time they learned they have been duped, it is too late.
California law calls for severe and immediate penalties to be meted out by the Department of Industrial Relations (DIR) should an employer operate without proper workers' comp coverage. Whether intentional or inadvertent, the penalties for this violation remain the same.
I pledge to do everything within my power to root out these unauthorized frauds and protect the honest employers who are fighting the odds to obtain affordable workers' comp coverage. The California Department of Insurance (CDI) is working with DIR and the Employment Development Department to launch an educational outreach effort to make employers aware of the dangers and to give them answers.
In the meantime, business owners must make every effort to verify whether their workers' compensation carrier, or a company offering to provide coverage, is authorized to write business in California. They may do so by calling the CDI hotline at 1-800-927-HELP or accessing the Department's Web site at www.insurance.ca.gov . The Department also recommends employers review the information found in 'An Employers Guide to Workers' Compensation,' which is available on the Department of Industrial Relations Web site at www.dir.ca.gov ."