Business Insurance

Tips on Preventing Fraudulent Claims

workers comp

By Julie Beezley, Leavitt Group

When a business owner has to file a workers compensation claim that they suspect may be fraudulent, it can leave the owner questioning “Why is this happening to me?” Handling a suspect fraud claim is one of the most distasteful things an employer may have to deal with and can create an environment of mistrust among employers and employees.

The act of filing claims, whether they be legitimate or fraudulent, is responsible for driving up the already high cost of workers compensation insurance. Unfortunately, today’s economic situation is having an adverse effect on employees who may not be litigious, but who see a seemingly easy way out of their personal financial woes: lawsuits involving falsified claims of workplace injuries. Does this mean that ALL work-reported injuries have been falsified? No, certainly not. However, it does mean that we need to provide a consistent, safe work environment that will minimize negligence on the part of the employer. Here are a few proactive strategies to help prove or disprove a claim of illness or injury:

Install Camera Equipment Where Possible
Cameras, as a whole, can be a deterrent. It is more difficult for an employee to claim they were injured in a specific area if the camera monitoring that area shows otherwise.

Provide the Correct Tools for Getting the Job Done
When we instruct employees to wear Personal Protective Equipment (PPE), we must be consistent about enforcing that they wear it. More importantly, we need to ensure that we are providing the PPE specific to performing that job or task and that all PPE be in safe, working condition. Failing to do so leaves an owner open to possible fraudulent claims implying that the employee was injured because the employer failed to provide adequate Personal Protective Equipment.

Be Consistent in the Handling of Claims
A common mistake made by owners and managers is to treat an injured employee as though they are not legitimately injured. Remember, your obligation to an employee claiming to be injured is to ensure they receive medical attention. Handle the processing of all claims as though they are legitimate. Communicate and work with your industrial care clinic to verify whether or not the injury that the employee is alleging is evident when the employee is there to receive medical attention. If you suspect or know of facts that what the employee is alleging did not actually happen while they were at work, or maybe never occurred at all, notify your workers compensation insurance carrier of your suspicions. Typically, treating the employee “different” since they filed an injury claim can escalate at a later date into other types of claims such as harassment or wrongful termination. Employees who feel threatened or harassed may feel they have no recourse and turn that into a reason to file or escalate a claim into possible litigation.

Document, Document, Document!
Failing to document the instances of general and job-specific training will not work in the favor of an owner or manager. If an employee suggests they were injured because they were not properly trained, consistent documentation by the employer showing that the employee understood and participated in such training will aid in dealing with the claim. Employees’ signatures, dates of training, and tasks learned should be present on all documentation.

Hire the Right Person for the Job
Questions during an interview must always ONLY BE JOB RELATED. It is against the law to ask a potential candidate questions such as “have you ever filed a workers compensation claim with a previous employer” or “are you currently involved in any lawsuits with previous employers regarding an injury at work?” Instead ask questions related to the job that require them to answer more than just a “yes” or a “no.” Why is this important? If you can get a candidate to positively express how they felt about their work, you can see if they enjoyed what they did, liked working with people, worked well with others, and were committed to doing the job well. Generally, people who are excited about the work they do are more likely to work in an alert and safe manner and less likely to become injured. It shows they CARE about their job and the people they work for and are less likely to file fraudulent claims. People who are not excited or “vested” emotionally in their work sometimes feel less connected to their employer. Finding and hiring the right person for the job generally will leave you with an employee who is least likely to file a fraudulent claim.

Contact your Leavitt Group advisor for more information about your employee policies and Human Resource questions.

The coverages discussed herein are for illustrative purposes only. The terms and conditions of your specific policy may differ from those described. Please consult the provisions of your policy for the terms, conditions, and exclusions that apply to your coverage.