Prevent workers' comp fraud

Five Ways Businesses Can Prevent Workers' Compensation Claim-Related Fraud

According to the Coalition Against Insurance fraud, claim-related fraud cost businesses billions of dollars every year. Claim-related fraud can be perpetrated by an employee, a medical provider or vendor, or the policyholder. It typically occurs when an employee falsely claims a work-related injury in order to obtain workers compensation benefits.

Here are five proactive steps business owners can take to promote workplace safety and reduce potential claim-related fraud.

  1. Promote a fraud-free workplace and establish a zero-tolerance policy on fraud. Encourage employees to report suspicions of potential fraud immediately.
  2. Establish a culture of safety. If you don’t have one already, develop a safety plan. Make sure all employees understand the policies and procedures in place to keep themselves and their co-workers safe.
  3. Regularly hold safety meetings, use posters and signage to reinforce policies, and reward employees for meeting safety goals.
  4. Establish sound hiring procedures. It is worth the time and effort to hire honest employees. Often a thorough background check can reveal previous fraudulent claims. Know the red flags of potential fraud. A spotty work record, extensive criminal record, exaggerated details about the incident or symptoms, or a lack of witnesses should warrant further investigation.
  5. Consider legally authorized video surveillance to monitor for workplace fraud.  All workplace injury and illness claims should be reported to the insurance carrier in a timely manner. This is especially critical when a business owner suspects an employee has made a fraudulent claim.

Suspicious claims should be reported immediately to the workers compensation insurance carrier’s Claims Department and Special Investigations Unit, or to the appropriate law enforcement authorities for investigation. Workers compensation claim-related fraud can be a costly crime, but by following these steps it can be deterred or mitigated.


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