Insured must pay retroactive workers’ compensation insurance premiums for failing to include family employees’ wages.

Petitioner did not report the annual wages he paid to his sons, who were employees in his carpentry business, on his applications for workers’ compensation insurance coverage, relying on erroneous advice that he was not required to include family employees under his workers’ compensation coverage.  Because workers compensation premiums are calculated based, in part, on payroll amounts, the nondisclosure resulted in an underpayment of premiums to Respondent AmTrust, his insurer.  Although AmTrust was entitled to recover the additional premiums owed by Petitioner under his initial policy, it was not entitled to recover for the premiums owed under the policy entered into after a 2007 audit of Petitioner’s business, when AmTrust should have discovered the error and informed him of the requirement to include family employees under his workers’ compensation coverage.