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How To Spot The Warning Signs of Workers’ Compensation Fraud

Accidents can occur in the workplace. When an employee gets injured as a result of a work-related accident, workers’ compensation (WC) insurance protects the business and the injured employee. However, employees, employers and even health care providers can take advantage of the system by committing WC fraud. According to the National Insurance Crime Bureau, WC fraud costs insurance providers billions of dollars every year and can lead to higher insurance premiums or penalties to the business.

One in 10 small business owners fear employees will fake an injury. One in five owners do not know how to identify WC scams.  Know the warning signs to prevent these concerns and protect your business.

 Top 10 Warning Signs of Workers’ Compensation Fraud

  1. Disgruntled employee
    An employee who is likely to commit fraud may do so after being denied a vacation request or being reprimanded
  2. Hard-to-reach employee
    Trouble contacting an employee on medical leave may be a sign the employee is working another job while collecting benefits.
  3. New employee
    Statistically, the newer the employee, the more likely the claim is fraudulent.
  4. No witnesses
    A flag should go up if no one can corroborate the story.
  5. Different stories
    Beware if the story varies from you, medical professionals, peers or witnesses.
  6. Accident day
    Accidents on Monday mornings or Fridays  afternoons should raise concern.
  7. History of Claims
    Be aware if the employee has a history of filing claims that are suspicious.
  8. Late Reporting
    The accident was not reported right away and there was no explanation why it was reported late can be a sign of fraud.
  9. Changes in Employment
    Find out if the employee has a history of changing jobs, physicians and addresses.
  10. Refuses Treatment
    Employee refuses to see a physician to examine the extent of the injury.

Be alert for these warning signs and know when to ask more questions. Talk to your local insurance agent to learn more about WC insurance to make sure you are properly protected and have to right procedures in place to handle a claim or a fraud situation.