One of the ways in which project developers can be hurt, he said, is that contractors may put in injury claims for workers who are actually hurt on another job site where they have workers employed.

Frequently, said Mr. Thacher, it is difficult to track the comings and goings of everyone on a large construction site and preventing such scams involves careful monitoring and examination of sign-in sheets. "It's an intense investigative piece," he said.

Mr. Thacher said that often there is no checking of contractors' certificates of insurance and he has been amazed at the number of times scam artists have been able to slip by with phony documents that could be exposed if someone were to notice the word "Assurance" printed in place of "Insurance."

Turning from workers' compensation to surety issues, he said that when it turns out there is a failure of a contractor's performance bond, the burden then falls on the project's insurer, he noted.

As evidence that insurers are failing to look closely enough at contractors, Mr. Thacher said that during his time with the School Construction Authority, the agency was able to debar 290 contractors and of that group "every one had a surety bond."

The debarred contractors were kept off the job for a myriad number of factors including organized crime ties, fraudulent activity, environmental violations and other criminal activity, as well as prevailing wage law violations.

Mr. Thacher said while carriers' claims departments would favor advance screening of contractors, but the underwriting side of the business is so cost conscious that "you don't have insurers doing this kind of integrity vetting."

Another misdeed, involving contractors his firm has noticed is that they may quietly substitute to a second-tier subcontractor that is so insubstantial that their address is a vacant lot.

Project owners, he said, need to have good controls and risk management that does checking for fraud and job site monitoring. Such activity, said Mr. Thacher, can "result in huge savings."