Bloomberg) -- Applied Underwriters, a workers’ compensation insurer owned by Warren Buffett’s Berkshire Hathaway Inc., agreed to provide additional disclosure to customers about a product in California after a state review of potential abuses.

The deal requires Applied Underwriters “to stop the bait-and-switch marketing tactics used to sell a workers’ compensation insurance product, which led to numerous complaints from employers caught up in the costly and complicated policies,” the California Department of Insurance said Thursday in a statement.

Wave of litigation

Applied is facing a wave of litigation over products where the costs to employers could vary based on their claims. Dozens of businesses allege the insurer peddled plans that regulators hadn’t approved. They also complain about being surprised by large bills based on formulas that stacked the deck in Applied’s favor. Regulators in Vermont and Wisconsin have outlawed some of the company’s plans.

The insurer has said its coverage saves employers money and that customers were aware of the terms. Companies that are litigating account for only about one in 400 policies sold, Jeffrey Silver, Applied’s lawyer, told Bloomberg News for a story published in November. The plans didn’t work out in their favor because they had claims that caused costs to go up, he said. They’re now “taking advantage of a regulatory situation” to avoid paying what they owe, according to the lawyer. About 90% percent of employers renew, Silver said.