5 Red Flags to Watch for to Protect Your Business from Fraudulent Claims
The effects of workers’ compensation fraud add up to billions of dollars every year.1
Workers’ compensation scams are as varied as the workforce on which they feed, but can be lumped into several broad categories. The largest fraud category concerns people who are injured away from work, but claim the incident happened while on the job. The second largest fraud category is made up of workers who receive a minor injury on the job and inflate it into a much more serious injury in order to collect more money and potentially stay off the job for a longer period of time. The third largest group of fraudulent claims is filed by able-bodied workers who claim to be hurt—false claims of back and neck injury or carpal tunnel syndrome are most common.2
There are 5 red flags that employers can watch for to protect themselves from workers’ compensation fraud:
- Accidents are reported to have occurred on late Friday or early Monday morning. This might indicate that the injury happened on the weekend as a result of a non-work related activity.
- The accident is not witnessed by other employees, is not reported immediately, or is said to have occurred in an area where the worker is not normally found.
- The injured worker is seasonal, part-time, or dissatisfied and about to be fired.
- The injured worker was seen performing other activities inconsistent with the purported injury, such as playing softball or golf.
- The worker has filed two or more workers’ compensation claims in the past.
While these red flags do not necessarily indicate that fraud has occurred, they show cause for investigation when combined. In order to help prevent insurance rates from rising, it is incumbent upon business owners to be aware of fraud and thus better able to protect themselves from scammers.