You’ve worked so hard to build your business and you’ve taken all the right steps to insure every aspect of your operation, right? Suddenly, you get hit with a workers comp claim that seems suspect. Trust us, it happens more often than you think! In fact, it is currently reported as the fastest growing insurance fraud! While workers’ compensation coverage is incredibly useful for covering expenses that may result from employees getting ill or injured on the job, it also has the potential for fraud.

Fraudulent workers’ compensation claims can put your company in a tight spot. Workers can falsify the cause or severity of their condition, or even fake an injury altogether in order to get out of work and collect compensation without facing any repercussions, if you don’t detect the fraud. Employees who commit workers’ compensation fraud put your business at risk by increasing overall coverage costs, hindering your reputation with customers, and potentially causing financial ruin.

Business Insurance Center is in the business of protecting your most cherished asset and here we’re bringing you some vital tips on how to spot workers compensation fraud within your organization!

Examples of Employee Workers Comp Fraud

Trust between you and your employees is tantamount to your business’ success, so we know it’s difficult to imagine that this could happen to your business. Also known as workers compensation claimant fraud, workers’ comp fraud by employees usually involves falsifying at least one element of illnesses or injuries, such as exaggerating the severity or length of time spent recovering from an injury to obtain a higher payout for an extended hospital stay.

Most common workers compensation fraud:

• Malingering. Exaggerating an injury is a common tactic that some employees use to prolong workers’ compensation benefits. For instance, if someone has a mild ankle sprain, they may claim it’s more painful or debilitating than it really was in order to extend the time allotted for recovery. Employees may even lie about the timing of when they were fully healed in order to collect more workers comp recovery funds.
• Faking a condition for workers comp. Many workers comp fraud cases involve a completely invented work-related illness or injury. Employees may say that they developed carpal tunnel due to repetitive motions on the job when in fact, they never had such a condition.
• Falsely attributing an ailment on a workman’s compensation claim. Sometimes employees who become ill or injured outside of work recognize this as an opportunity to make money off of a claim by committing workman’s compensation claim fraud. They would then claim that this condition occurred on the job site, or at work in order to make money off workers’ compensation coverage. For example, an employee may sprain an ankle while exercising and claim it occurred at work.
  

  Signs of Workman’s Compensation Fraud

  A vital part of protecting your business from workers comp fraud is knowing some common signs of employee workers comp fraud. If your employee makes a suspicious workers comp claim, assess the entire situation for possible fraud. Some warning signs of employee workers comp fraud include:

-The employee reports their injury or illness at the start of a shift
-There was no witness to the incident that caused the employee’s illness or injury (especially if the employee works near others)
-The employee does not provide a cause for their illness or injury
-The information provided by the employee of how the injury or illness occurred changes
-The employee switches medical providers during treatment for their illness or injury
-The employee is difficult to contact during the claim process
-The employee has a history of disciplinary issues
-The employee with the injury or illness claim is newly hired

Overall, it’s critical for you to be proactive in preventing and identifying employee fraud in your workers’ compensation program. Keep an eye out for these fraud warning signs to protect your business!

As the fastest growing insurance fraud in America, workers claimant fraud is one way employees may seek to make the most of an opportunity. Employee fraud in workers compensation claims can lead to serious consequences for your organization. It can increase overall claim-related expenses, through the complex investigation process, and raise your workers comp insurance premiums due to associated risk factors. Besides coverage ramifications, employee fraud can also affect the overall success of your organization, damaging your organization’s reputation and impacting your client relationships. These troubling claims may cause potential investors, shareholders, or even future contracts to be in question. You’ve worked so long to build your business, it would be disastrous for a fraudulent workers comp claim to threaten your most cherished asset.

The key to avoiding such destruction is to put in place effective preventative fraud measures that safeguard your business and dissuade any fraudulent actions. Business Insurance Center breaks down some simple steps that you can take to avoid employee workers comp fraudulent claims.

How to Avoid Workers Comp Fraud

Are you now wondering “how do I protect my business against workers comp fraud”? That’s the spirit! There are a number of ways to help prevent employee insurance fraud by taking precautionary measures and making informed decisions that best protect businesses against employee workers comp fraud.

1. Educate Your Employees About Workers Comp Fraud
During any meeting, routine training, or group session, take the opportunity to inform your staff about workman’s compensation fraud. Teach them the ins and outs of workers compensation. You’ll have peace of mind knowing that your staff are trained on how to properly file a claim, what isn’t covered by workers comp, and how fraudulent workers comp claims negatively affect a business. It also lets employees know that you’re aware and safeguarding against such false claims. Additionally, if employees are instructed to report any work illness or injury immediately, they are less able to make a false workers comp claim (the issue is treated more quickly and cannot escalate into a more serious condition). Open communication often discourages fake workers compensation claims.

2. Hire Trustworthy Employees to Avoid Workers Comp Fraud
During the hiring process, apply well-established screening systems such as criminal background checks and contact with references (and prior employers). These measures can help you choose employees who are unlikely to engage in criminal behavior. Another element of the hiring process should be an assessment to determine if the candidate is capable of performing any physical requirements for the job. When you hire the right people for the right job, it decreases the likelihood of a workers comp claim in general, while also making it less likely that they’ll be able to successfully fake an injury or illness.

3. Use Risk Management Strategies to Prevent Fraudulent Workers Comp Claims
Having a workplace safety plan and strategies that are beyond reproach increases the likelihood of employee safety. Implementing a successful and encouraging return-to-work program also supports employee happiness, health, and safety. This both limits workers’ compensation claims and keeps costs low when claims occur, making it more difficult for employees to engage in fraud.

4. Asses Workers Compensation Claims Carefully
Establish a diligent and thorough process for assessing workers’ compensation claims. This will help you to detect illegitimate workers comp claims and help deter employees from attempting fraud.

Protecting Against Workmans Comp Fraud

If this unfortunate situation does occur within your organization, there are steps you can take to minimize the damage. After all, employee workmans comp insurance fraud is illegal and your employee will face ramifications if found guilty of committing fraud, including civil penalties, court injunctions, and criminal charges. Thus, it’s vital to report suspicions as quickly as possible and determine if the claim is indeed fraudulent.

How to Report Workers Compensation Fraud
If you suspect that employee workers compensation fraud is happening at your organization, report your suspicions to your claims adjuster immediately. The claims adjuster has a handful of tools at their disposal to help determine if an employee’s claim is legitimate, fraudulent, or requires corrective action.

What to do about Employee Workers Comp Fraud
Together with your insurance claims adjuster, you can work to determine if your employee is making an illegitimate workers comp claim by:
-Having a case manager visit the employee randomly
-Analyzing all the medical records
-Requiring an independent medical examination of their injury or illness
-Surveilling the employee through video or social media

Hopefully these tips from the Business Insurance Center on workers compensation fraud protection have helped! It’s always most beneficial (and cost-effective) to deter false workers comp claims from the start – and now you know how!