Zurich American is chasing more than $1.1 million in unpaid workers' comp premiums from two California firms after payroll audits.
The insurer filed suit on March 31, 2026, in the U.S. District Court for the Central District of California, naming Managing Personnel Services, Inc. and Employee Force Provider, Inc. as defendants (Case No. 5:26-cv-01568). Both companies share an address in Ontario, California, and Zurich describes them in court papers as a captive insurance provider and program — and as alter egos of one another, calling them "essentially the extension of each other."
The dispute traces back to two workers' compensation policies Zurich issued to the defendants, covering consecutive annual periods from July 2023 through July 2025. Under the terms of both policies, the upfront premium was based on estimated payroll exposure. After each policy period ended, a "true-up" audit would compare the estimate against actual payroll numbers. If exposure came in higher than expected, additional premium was owed.
Zurich says this happened twice. Following an audit of the first policy in December 2024, Zurich says it billed the defendants an additional $179,753. A partial payment of $100,000 arrived the following May, leaving $79,752 still on the table.
The second policy did not fare any better. Zurich cancelled it effective June 9, 2025, for nonpayment. A post-cancellation audit completed that August put the outstanding premium at $1,059,255. According to the court filing, the defendants paid nothing toward that amount.
By February 2026, Zurich had issued a formal Statement of Account demanding a combined $1,139,007 across both policies, plus interest. The filing states that despite repeated follow-up, no further payment has been made.
Zurich's sole claim is breach of contract. The insurer maintains it delivered the coverage it promised under both agreements, while the defendants failed to pay what the audits determined they owed.
For carriers and underwriters writing workers' comp in the staffing space, the case touches on a familiar industry pain point. Companies that supply temporary labor tend to carry highly variable payroll, and that variability makes accurate premium estimation inherently difficult. When post-policy audits come back significantly higher than initial projections, as alleged here, the resulting premium gaps can be substantial, and collecting on them is not always straightforward.
The mid-term cancellation of the second policy adds yet another layer. Walking away from a policy for nonpayment is never a step carriers take lightly, and the aftermath — a seven-figure audit bill with no payment in sight — offers a pointed reminder of the financial exposure that comes with it.
No determination has been made in this case, and the defendants have not yet responded to the allegations. Zurich has requested a bench trial.
