Flooring Company Ordered to Pay $6.3 million in Workers’ Comp Case

Cover All Inc., a 15-year-old flooring and carpet installation company in Chatsworth, has been ordered to pay $6.3 million in restitution to the State Compensation Insurance Fund (SCIF) after pleading no contest to one count of insurance fraud. The case, prosecuted by the Los Angeles County District Attorney’s Office, dates back to September 2001, when Cover All obtained a workers’ compensation insurance policy from SCIF. A subsequent SCIF audit revealed that the payroll Cover All reported was lower than that reported to the state’s Economic Development Department. An investigation by the California Department of Insurance ultimately revealed that Cover All underreported $26.9 million in payroll between Sept. 1, 2001, and April 16, 2005, to SCIF, resulting in a premium loss of $7.6 million. In addition to paying the restitution amount, Cover All has been placed on five years probation.