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Workers’ Compensation insurance fraud is a growing trend, which can have serious financial repercussions. If you can learn to recognize common warning signs, you could save yourself from costly issues, like rising premiums, production delays and retraining costs.
What is Workers’ Compensation Fraud?
Workers’ Compensation fraud occurs when an employee files an insurance claim, which either exaggerates an injury or fabricates it entirely. It is a serious crime that has a very real impact on both business owners and employees.
How common is it?
Workers’ comp fraud is the fastest growing type of insurance fraud in America.
How much does it Cost Employers?
Workers’ Compensation insurance scams cost employers an estimated $7.2 billion per year.
Types of Bogus Claims
An employee may attempt to gain Workers’ Compensation benefits by making one of these four types of false claims:
- A fake injury
- An exaggerated injury
- An off-the-job injury
- An old injury that did not completely heal
Workers typically initiate a bogus claim about a disabling workplace injury to gain free money and receive extended time off.
11 Common Insurance Fraud Warning Signs
You can protect yourself from insurance fraud, if you learn to recognize these common warning signs of fake claims.
- No witnesses
- Injured employee refuses treatment
- Delayed reporting of injury
- Inconsistent, conflicting or suspicious story of the incident
- A history of making claims
- Injury occurred just before or after a weekend or holiday
- Claim happens right before or after a job termination, layoff or conclusion of seasonal work
- The injured employee is working a side job
- The claimant is doing things inconsistent with their injury
- The out-of-work employee is hard to reach when on leave
- The employee hired an attorney and is trying to receive a quick settlement
What to do to Protect your Company
It’s best to have a zero-tolerance policy on workers’ comp fraud. If you suspect an employee is committing insurance fraud, you can report the suspicious act to your insurance carrier. After notifying your insurance company, compile supporting information and documentation. By following these simple steps, you can reduce the likelihood of falling victim to a costly false claim.
