15 Warning Signs of Workers’ Compensation Fraud

Workers’ compensation insurance is among the “must have” insurance policies for business. More than 94% of American businesses carry workers’ compensation insurance, protecting over 135 million employees.

This insurance works well as a no-fault method of paying workers for medical expenses and wage losses due to on-the-job injuries, but it is far from perfect. According to estimates by the Coalition Against Insurance Fraud and the National Insurance Crime Bureau, workers’ compensation insurance fraud costs up to $7 billion each year.

While the majority of workers’ compensation claims are truthful, studies indicate that 1% to 2% or more of all workers’ compensation insurance claims are fraudulent. To help you detect possible workers’ compensation fraud, experience shows a claim may be fraudulent if two or more of the following factors are present:

  1. Monday Morning: The alleged injury occurs either “first thing Monday morning,” or late on a Friday afternoon but not reported until Monday.
  2. Employment Change: The reported accident occurs immediately before or after a strike, a layoff, the end of a big project or at the conclusion of seasonal work.
  3. Job Termination: If an employee files a post-termination claim:
    • –  Was the alleged injury reported by the employee prior to termination?
    • –  Did the employee exhaust his/her unemployment benefits prior to claiming workers’ compensation benefits?
  4. History of Changes: The claimant has a history of frequently changing physicians, addresses and places of employment.
  5. Medical History: The employee has a preexisting medical condition that is similar to the alleged work injury.
  6. No Witnesses: The accident has no witnesses, and the employee’s own description does not logically support the cause of injury.
  7. Conflicting Descriptions: The employee’s description of the accident conflicts with the medical history or First Report of Injury.
  8. History of Claims: The claimant has a history of numerous suspicious or litigated claims.
  9. Treatment is Refused: The claimant refuses a diagnostic procedure to confirm the nature or extent of an injury.
  10. Late Reporting: The employee delays reporting the claim without a reasonable explanation.
  11. Hard to Reach: You have difficulty contacting a claimant at home, when he/she is allegedly disabled.
  12. Moonlighting: Does the employee have another paying job or do volunteer work?
  13. Unusual Coincidence: There is an unusual coincidence between the employee’s alleged date of injury and his/her need for personal time off.
  14. Financial Problems: The employee has tried to borrow money from co-workers or the company, or requested pay advances.
  15. Hobbies: The employee has a hobby that could cause an injury similar to the alleged work injury.

If your business has a need for workers’ compensation insurance, whether a new policy or a new approach, contact Campbell Insurance. As your trusted advisor, we are happy to work with you on the best approach for your business.