Fraudulent Injury Claims
Every year insurance companies spend millions investigating and prosecuting fraudulent injury claims. While some fake claims slip through, many more are caught and denied. The most serious cases of fraud end up in criminal courts. And the sad truth is, that honest, hard-working people often end up paying for the wrong doing of others. With their options limited, insurance companies are forced to pass on the costs of investigating fraudulent claims to their customers, in the form of higher premiums.
With statistics showing that about one in four workers compensation claims is fraudulent, the small business owner can share a big financial burden as well. Fighting these battles in court is expensive, but not fighting them can be even more expensive. Not only will your premiums be higher, but legal fees and settlement costs will cut into profits even further.
What can you do to prevent this?
Below are a few tips that can save you money.
Have a Safety Plan in Place
Having a written safety plan in place makes it less likely employees will “try and pull a fast one.”
A good safety plan should include job descriptions, job duties and safety hazards. It should also outline what steps to take if an injury occurs. In addition, it should be displayed in a common area and in company vehicles, and should be signed-off on, every 3-6 months to ensure compliance. Enforce it at all times. This will help employees know what they should and shouldn’t be doing and violations can be written up a misconduct and avert a workers compensation claim.
Provide and Promote a Safe Work Environment
The easiest way to prevent fraudulent injury claims is to provide a safe and comfortable workplace and
- Assure your employees that safety – and their well-being – are top priorities.
- Track and display the number of days that elapse without an incident and celebrate milestones by putting on a company pizza party or taking employees out to lunch.
Spending money on incentives could save you more on fake claims.
Carefully Screen All Job Applicants
Another good way to combat fraud is through careful screening of all job applicants. Conduct background checks on all candidates prior to hiring, carefully verifying all references and background information. Be alert to criminal records and especially to individuals with a history of injury claims. Spending the extra time in the hiring process ensures you have a more ethical workforce and can save you big headaches down the road.
Recognize Red Flags
The Coalition Against Insurance Fraud puts out a list of the most common forms of workers’ compensation fraud by workers. Here are just a few. Visit their website for more help stopping fraud.
- Remote injury. Workers get injured away from work, but say they were hurt on the job so that their workers comp policy will cover the medical bills.
- Inflating injuries. A worker has a fairly minor job injury, but lies about the magnitude of the injury in order to collect more workers comp money and stay away from work longer.
- Faking injuries. Workers fabricate an injury that never took place, and claim it for workers compensation benefits.
- Old injury. A worker with an old injury that never quite healed claims it as a recent work injury in order to get medical care covered.
- A worker stays home by pretending the disability is ongoing when it is actually healed.
Knowing the common warning signals of suspicious claims will help you identify possible workplace injury scams more easily.
At Freedom Insurance we want help you with all your insurance needs so you can concentrate on what you do best — running your business. If you or someone you know has been scammed by insurance fraud share a comment below. We always love to help our readers!
