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Workers’ Compensation Insurance Lawsuit Against Applied Underwriters


Berger Montague is representing proposed classes of California and New York employers who participated in Applied Underwriters Inc.’s EquityComp or SolutionOne workers compensation insurance at any time between January 1, 2006 and the present.

About the case

Applied Underwriters Inc. is a Berkshire Hathaway subsidiary that designs financial services and workers’ compensation solutions for small and midsized businesses. Plaintiffs allege that from at least January 2006 to the present, Applied Underwriters deceptively marketed and sold unlawful workers’ compensation insurance programs under the names EquityComp and SolutionOne.

What is workers’ compensation insurance?

Workers’ compensation insurance covers employers for medical costs and a portion of lost wages for an employee who becomes injured or ill as a result of their employment. State law requires insurance companies offering workers compensation insurance policies to file all policy forms and the rates charged with the state Insurance Commissioner.

Workers’ compensation insurance is usually sold to employers through one of two forms of insurance policies:

  • Guaranteed Cost (GC) Policy: A policy where the insurance premium is fixed at the start of the policy period, regardless of subsequent claims experienced during the policy term.
  • Retrospective Rating Plan (RRP) Policy: A policy where the premium charged at the beginning of the policy period is subject to change depending on the actual claims experience incurred during the policy period.

Regardless of the employers’ claims and loss experience during the term of either a GC or RRP workers’ compensation insurance policy, the amounts owed by the employer cannot exceed either the fixed GC premium or the RRP maximum possible premium.

What is Applied Underwriters’ workers’ compensation insurance program?

Applied Underwriters markets and sells its EquityComp and SolutionOne workers compensation insurance programs to small and midsized employers as “Profit Sharing” plans that operate as RRP policies.  Through the use of a “Reinsurance Participation Agreement” (RPA) that is not filed with state insurance regulators, Applied Underwriters attempts to convert the filed and approved one year GC policies that it sells into an RRP policy.  In order to sign up for the GC policy and obtain workers compensation insurance, employers must also sign the RPA, which requires a three year commitment rather than a single year.  However, the RPA is never filed with or approved by state insurance regulators and contains onerous provisions modifying the terms of the GC policy.

Using the RPA, Applied Underwriters:

  • Bills and collects money from employers that exceeds the estimated maximum cost of the EquityComp and SolutionOne programs;
  • Refuses to provide information to employers explaining how monthly invoices are calculated;
  • Misrepresents and/or omits from program information provided to employers the anticipated total program costs;
  • Charges and collects significant penalties when an employer  participant leaves the EquityComp or SolutionOne program before their three-year term expires;
  • Multiplies and inflates existing claim reserve requirements to require additional payments from employers;
  • Charges premiums, costs, and fees that are not based on the participants own claims but which instead underwrite the claims of other program participants;
  • Refuses to return excessive money charged to employer participants; and
  • Requires confidential arbitration in a foreign venue if an employer participant wants to sue.

If you are an employer in California or New York, participated in Applied Underwriters’ EquityComp or SolutionOne program from 2006 to the present, and are interested in discussing this class action, please contact Glen Abramson at or 215-875-4683 or Michael Twersky at or 215-875-3052.

Do I have to pay to consult with an attorney? No.

We are happy to talk with you about your potential claims free of charge. If we decide to represent you in a lawsuit, we will enter into a written contingent fee agreement with you. A contingent fee agreement means we advance all the costs of the litigation, we only get paid if we win, and we will receive our fees from the amount paid by the Defendant in the case.

Lead Attorneys

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Glen L. Abramson


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