Protecting Yourself
against ulent
Insurance Claims
By Elizabeth Lowman
I
nsurance fraud can fall into one of
two categories: hard fraud or soft
fraud. An incident is considered
hard fraud when someone deliberately
fakes an accident, injury, theft, arson or
other loss to collect money. These are
the typical kinds of false claims made by
employees or customers.
Since 2007, fraudulent insurance
claims in America have increased yearover-year in virtually every category.
2015 Issue 3 |
THE
SCORE
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Workers’ Compensation Fraud
Workers’ compensation insurance
protects employees who are hurt on the
job. This valued employee benefit pays
for medical expenses, lost wages and
other expenses while a worker heals.
While most workers are very
honest, a small number scam this
coverage for personal profit and the
damage they cause is vast. Workers’
comp fraud is a large crime in America
these days. Tens of billions of dollars in
false claims and unpaid premiums are
stolen every year.
Scams are forcing premiums higher
— draining business profits and costing
honest workers their pay and jobs.
Acts of fraud in this category can
include willfully making a false statement
to get benefits; concealing information to
receive benefits; misrepresenting how an
injury occurred; inflating costs; fabricating injury or anything willfully done to
exaggerate the claim.
There are a few clues to be suspicious of when an employee reports
this kind of claim, such as the injury is
claimed after being put on final warning.
Maybe the injury is reported first thing
Monday morning and claims it happened
the prior week, the claimant stops
communicating or the claimant refuses
a diagnostic procedure to confirm the
nature or extent of an injury. While these
are not guaranteed tip-offs to fraud, it is
worth noting when one or more of these
potential warning signs occur in conjunction with an insurance claim.
However, experts recommend that
if you do observe these red flags or
other indicators of
fraud, not to take
action on your
own to deny a claim or otherwise alert
a suspected perpetrator of your suspicions. You may inadvertently hinder
the investigation. Instead report these
indicators of fraud to your carrier.
So what can you do to protect your
business against false workers' compensation claims? It’s all about documentation and reporting:
• Get a written statement from the
claimant including a description of injuries in his/her own script.
• Get all witness statements in
writing.
• Capture any discrepancies in writing
(i.e., slip on wet floor that was unwitnessed and all the employees clothes
were dry).
• Get information to your carrier
immediately.
• Let the carrier know if there are
employment issues with the individual
submitting the claim.