A local contractor said many more companies escape being fined for having no insurance.
2005 was a record year for the number of companies fined because they lacked proper workers' compensation insurance. In a year-end report, Attorney General Jay Nixon's office said that 262 companies were fined a total of $755,000.
That figure is up from $557,000 paid by 148 businesses in 2004.
Missouri law requires that all businesses with more than five employees and construction companies with one or more employees purchase workers' compensation insurance.
Four businesses in Cape Girardeau, Bollinger and Scott counties were among those that were fined, according to the attorney general.
Local contractor Mike Annis said that figure is just a drop in the bucket. "I could probably find 262 companies without insurance right here in Cape Girardeau," he said. "It's not just one- or two-man operations, either; I've seen multiple-man crews without it."
Annis said that his company receives a 15 percent discount on insurance rates because of a history of safe working conditions, but for others the price can be prohibitively high.
One local roofer who prefered not be named said that he pays $29 to workers' compensation insurance for every $100 in payroll.
Workers' compensation premiums averaged less than $2 per $100 of payroll in 2005, according to the National Council on Compensation Insurance.
Craig David of Premium Industries Inc. in Sikeston, however, said he has six employees and pays more than $40,000 yearly for workers' compensation and other liability insurances. Because of this, he said, he is regularly underbid by companies without insurance.
"Not only can they undercut us," he said, "but because their overhead is so much lower, they end up with a higher profit margin. To me, this thing needs to be reformed. I know they tried to do it out in California, but it hasn't spread the way it should."
David also said that rate increases after accidents cause employers to do anything within their power to avoid making a claim.
A call placed to Missouri Employers Mutual Insurance, the largest provider of workers' compensation insurance in the state, was not immediately returned.
Homeowners getting work done on their house should ask for a certificate given by the insurance companies that certifies a workers' compensation policy say local contractors. This is the only way to avoid possible legal wrangling should an accident take place.
The record enforcement year ended with legislation backed by Gov. Matt Blunt seeking to decrease the number of claims made by employees. That legislation took effect in December.
Jon Fougere, a spokesman for Attorney General Jay Nixon's office, said the two are not linked.
"The new legislation has not had an impact," he said. "I don't think we can put our finger on one reason. We continue to be aggressive as far as enforcement is concerned. We've been doing what we always do."
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