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How businesses can fight workers’ comp fraud

On Behalf of | Apr 19, 2023 | Workers' Compensation Defense |

As we have said in the past, worker’s compensation fraud costs the insurance industry and its clients $30 billion a year. It is not a victimless crime. Instead, workers who try to game the system contribute to the rising costs for all employers. Whether claim-related or policy-related, these fraudulent claims may also prompt carriers to scrutinize subsequent claims more closely.

Four steps to combat workers’ comp fraud

Employers can take the following actions to keep their premiums under control:

  • Establish a zero-tolerance policy: Employers should communicate their expectations regarding workers’ comp claims. Rather than look the other way, they can establish a clear anti-fraud policy.
  • Give workers different ways to report fraud: Workers may fear that they will alienate themselves from others if they report a coworker. They may feel more comfortable if they can report fraudulent claims that involve anonymity or discretion.
  • Keep accurate records: Accurate record-keeping is key for all well-run businesses. Employers sometimes misclassify employees, which can lead to fines if it is intentional. Accurate payroll information is also vital for determining the right premiums.
  • Hire good people: The insurance agent or consultant should be trustworthy and not cause issues by cutting corners or making mistakes. The same goes for employees – reliable workers with a strong work history make a difference. Whether they are agents or workers, checking references is essential.

Creating a better work environment

Expecting quality work and behavior sets the tone for a safe and positive work environment. Taking these and other steps related to the job can go a long way toward avoiding workers’ compensation fraud and other issues that negatively impact a company.

Companies can report suspicions to the appropriate authorities, who can investigate the claim. They should include relevant information about the incident and details about the person.