Employers take a number of steps to keep their workers’ comp premiums in check through safety programs, job training and safety awareness. Even with these programs, it is still possible to have a fraudulent workers’ comp claim filed which can cause havoc on any business, especially smaller businesses.
One out of every four insurance fraud claims in the United States is related to workers’ compensation. Each year employees report personal injuries that happen outside of the job as a workplace-related injury. More often than not, these fraudulent claims usually appear in two forms: a legitimate workplace injury that is then exaggerated for excessive lost time and medical expenses OR a claim for an injury that did not, in fact, occur (or did not occur at work).
To protect yourself from any type of workers’ comp fraud, here are three questions that should be asked.
Is the Timing of the Claim Suspect?
One of the most important signs of a fraudulent claim is a delay in reporting the injury or a delay in filing the claim. In the U.S., each state has different “statutes” or time someone is able to file a workers’ compensation claim. A delay in reporting or filing should raise concerns. Other claims that should be questions are those that are filled around “season shutdown times”. Additionally, it’s important to look at the employee's past history. Does the employee get injured at the start of each summer/hunting season? Or does the employee’s spouse have a set time off? It’s important to dig deep and verify that any claim is a legitimate claim.
Has There Been Recent Adverse Employment Action?
Ask yourself, was this employee recently disciplined or on the verge of termination? An employee who sees a layoff or termination coming may make a fraudulent claim to collect workers’ comp benefits instead of unemployment. Other factors to consider are if the employee was passed over for a promotion or negative job evaluation.
Do the Circumstances of the Claim Raise Red Flags?
One of the most common items of fraudulent claims is that there were no witnesses to the alleged incident or injury. This should raise a giant red flag in any workers’ compensation claim. Additionally, extra attention should be paid to injuries that reportedly occur away from the employee's normal workstation.
If any of these, and/or other red flags arise, you should carefully review the FROI and any internal reports. Additionally, since workers’ compensation laws can get quite complex, consulting a workers compensation attorney can help you sift through all the legalities if a claim is fraudulent and especially if a claim is legitimate. Be sure to look closely at each employees claim, no matter how trustworthy they might be.