How to Prevent Workers’ Compensation Fraud in Your Business

Posted on: June 27, 2019 by Javier iSure

Accidents can happen on any job site and time is needed for those who are injured to recover. In the event of a workplace injury, a company will have to tap into its workers’ compensation insurance program and work out the financial payout of a claim. However, sometimes these payouts are administered under false claims unbeknownst to the company.

According to the Insurance Crime Bureau, workers’ compensation costs an average of $7.2 billion annually and workers’ compensation fraud is said to be the fastest-growing portion of insurance fraud in the country.

There are many different types of workers’ compensation fraud, but the one type that’s leading the charge of this major financial pain is employee fraud, which involves workers taking advantage of the system in place. Here’s what to look out for when it comes to workers’ compensation fraud and how to prevent it in your business.

What to Watch For

Workers’ compensation fraud may be hard to detect at times, which doesn’t make things any better when it comes to that $7.2 billion nationwide total every year. However, there are still warning signs that can show up that business owners can be on the lookout for.

Here are some warning signs:

  • The reported injury happened right before or after employment changes, including termination of employment, layoff, the end of a big project or seasonal work
  • The injured employee is difficult to reach at home
  • The employee has a history of multiple claims
  • There are no witnesses to the accident in a claim
  • The injured employee refuses a diagnosis to confirm the extent of the injury

Preventing Fraud

Workers’ compensation insurance is looked at as a fixed cost of keeping a business going. But workers’ compensation fraud can, in turn, raise the cost of running a business. The best way to keep employees from trying to take advantage of the system is through detection and prevention.

Business owners can be more careful with how they screen their job applicants. Good predictors of this kind of fraud are usually related to criminal backgrounds and a history of injury claims that are suspicious. Also, business owners can encourage their employees to speak up more when they recognize that something is a bit off. Listening to employees who may have knowledge of workers’ compensation fraud can help to open lines of anonymous communication and help to flag illegal activity.

Next, companies can stay in contact with injured employees. Frequent communication will encourage an early return to work because the employee knows their progress is being monitored.

Lastly, business owners can establish and follow procedures more consistently. By using the same process for reporting and investigating all accidents, businesses show they are not singling any type of accident out and will put the same resources to investigating each issue.

Businesses should communicate their policies and educate new employees during hiring and orientation to help everyone understand the consequences of workers’ compensation fraud.

About iSure Insurance Brokers

After serving leaders in the Greater Miami market for more than three decades, iSure Insurance Brokers has become the provider of choice for discerning commercial clients and individuals alike. Because no two insurance programs are or should be alike, you can be sure that iSure will craft a comprehensive approach to protection that is as unique as you are. We welcome the opportunity to protect what you have worked so hard to build. Please contact us at (305) 223-2533 to learn more about what we can offer you.

Posted in: Blog Commercial Insurance Workers' Compensation