Uncovering Warning Signs of Worker’s Compensation Fraud
There’s no doubt that accidents happen in the workplace. However, when an employee makes a false claim of injury, your business is on the line. Workers’ compensation fraud costs the insurance industry $5 billion each year according to the National Insurance Crime Bureau, and ultimately those costs are passed on to insureds through rate increases, not to mention the increased cost of coverage faced by employers victimized by this crime. Because of this, it is important to be able to identify the signs of workers’ compensation fraud.
What is Workers’ Compensation Fraud?
Workers’ compensation fraud occurs when someone willfully makes a false statement about an alleged injury or conceals information in order to receive workers’ compensation benefits. This may happen for a variety of reasons, such as having sustained an injury on their personal time. If you have a suspicious claim on your hands, look for these signs of fraud.
Delay in Reporting
Employees who get a legitimate on-the-job injury most typically report it right away. While it is true that the effects of an injury may not be fully known until the next day, a delay in reporting much beyond that can be a sign that the claim might have origins other than what’s being reported.
Monday Morning Claims
Mondays are one of the highest claim-reporting days of the week. Why? Because if someone claims an injury happened late Friday and waits until Monday to make the claim, there may be something suspicious going on. It could be a non-work-related injury over the weekend trying to be submitted as workers comp to avoid personal medical expenses.
Most often your employees will have someone around as they perform their duties, so if an accident happens there should usually be someone who can verify the event.
Most legitimate claimants can remember the details of their injury. If the story changes or if answers are vague, it could be a warning sign. Look more closely to see if the employee’s account matches the incident report or conflicts with the medical record.
In some cases, financial hardships can lead people to file false claims. Time off from work with pay can allow the employee to “double dip” by taking extra work on the side while they’re supposed to be home recovering.
History of Claims
If a person has had past suspicious or litigated workers comp claims, it may be a tendency to attempt feeding off the system.
An unhappy/unsatisfied employee may have more motivation to make a fraudulent claim that one that is happy and content with their job.
Post Employment Claim
If the claim comes at the end of a contract or work season, or right before or after being laid off, it can be a good reason to look more closely into the claim.
Difficult to Reach
Legitimate claimants are usually not hard to reach. If someone is consistently avoiding calls, it may be a red flag that they’re avoiding you for a reason.
Missed Medical Appointments
Those who are truly injured on the job will not miss or avoid follow-up medical appointments. Those committing fraud are motivated to miss them because each appointment may uncover the truth.
Engaged in Activities not Consistent with Recovery
If you learn the claimant is still involved in an activity that seems inconsistent with recovering from the injury they reported, like jogging or painting their house after reporting a back injury, it may warrant further investigation.
While none of these factors may point to fraud on its own, seeing a combination of these can be cause for concern. If you suspect a fraudulent claim, be sure to call your insurance company immediately. Insurance companies have the tools to legally investigate fraud, and doing so benefits the insured, the insurer, and keeps costs down for everyone.
Eclipse Insurance and Risk Management is an expert in pairing businesses with insurance solutions that keep their premiums AND claim-costs down. If you have any questions about insurance and minimizing your risks, call us today at 800-530-4448.