Small businesses have often complained that rising workers? compensation costs have made it difficult for them to stay competitive. As a result, some small companies break the law by not carrying insurance or understate payrolls to secure lower premiums. When a worker employed by a company with no insurance or insufficient coverage is injured, the costs are usually passed along to companies with insurance, who end up paying higher premiums. States are starting to crack down on companies who do not pay for insurance, and issue fines.
See Robin Stein, The New York Times, February 23, 2004