Carmoon Group Ltd. Business Insurance Hempstead New York

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

Floyd Arthur Insurance Expert New York http://floydarthur.info * http://carmoongroup.com * http://floyd-arthur.com

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

If you are an employer in the United States, you pay workers’ compensation insurance premiums to protect your employees who are hurt on the job. A benefit for both workers and employers alike, workers’ compensation insurance covers a portion of an injured workers income as well as medical and rehabilitation costs, and protects employers against expensive lawsuits.

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

Unfortunately, the workers compensation system is far from fool proof: Unscrupulous employers and employees often attempt to scam the system for personal gain. And though the rate of worker’s compensation fraud by employees is actually quite low (studies indicate that it is less than 1 percent*) employers still need to be aware of the signs that a claim may be less than legitimate.

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

What Workers Compensation Insurance Covers Worker’s compensation is government by state

law. However, statutes are fairly consistent across the United States.

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

Typically, workers’ compensation covers any employment related injury, including sudden accidents and injuries that occur over time, such as repetitive stress injuries or the physical effects of exposures to toxic chemicals. It also covers injuries that occur outside the workplace if they occur while the employee is “on the clock”.

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

Workers compensation typically excludes:• Injuries caused by drugs or alcohol intoxication• Injuries that occur because the employee violated

company policy (including safety rules)• Self-inflicted injuries• Injuries that occur as a result of a physical altercation• Injuries a worker suffers off the job• Injuries claimed by an employee who has been fired

or laid off

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

Types of Worker’s Fraudulent Workers Compensation Claims

According to the insurance industry, fraudulent

workers’ compensation claims by employees tend to fall into five basic categories:

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

• Employees who are hurt off the job and claim the injury occurred at work. For example, an employee injures his shoulder playing softball and claims it happened on the job.

• Minor injuries that the employee claims are more serious, such as reporting that a minor back muscle strain is major sprain

• Fake injuries—these are often soft-tissue injuries, which are difficult to prove or disprove.

• Old injuries that the employee claims are job related, for example, a knee injury that never completely healed that flares up after some period of time

• Malingering after a job-related injury has healed.

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

How to Spot a Fraudulent Workers’ Compensation Claim

Even a trained physician is not always able to

determine if an injury is real or when and how it occurred. However, there are a sometimes indications that a claim of an on-the-job injury may not be quite what it seems. These include:

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

• Timing: Injuries reported on Monday actually may have occurred over the weekend. Similarly, any injury reported at the beginning of the work day may have happened the night before. Ask other employees if the injured worker displayed any signs of injury before the reported injury occurred.

• Delayed reporting: An injury reported several days after it allegedly occurred may be legitimate, but it may not.

• Witnesses: A lack of witnesses to an accidental injury is sometimes a red flag.

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

• Repeat claims: About 35 percent of workers compensation claims involve a second injury. However, this is not always an indicator of worker fraud. Examine the workplace environment where the injury occurred. Are there safety hazards that have not been addressed? If so, more repeat claims are likely to occur.

• Inconsistencies in reporting: When a worker makes a claim of an on-the-job injury, always require a written report. Later, interview the employee about the incident and compare his verbal statement to the original document. Although a certain level of inconsistency is normal, the employee’s statements about how and where the injury occurred should be essentially the same.

• Motive for retaliation: Employees who have recently been disciplined, demoted or had their work hours or compensation cut may have a stronger motive to defraud the employer.

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

Guarding Against Workers’ Compensation Fraud The best protection against workers compensation

claims is a safe workplace. Let your employees know that you care about their welfare and take injury prevention seriously by encouraging them to report hazards and remedying issues promptly when they occur. Partner with key workplace leaders, including managers, supervisors and employees, to ensure that worker safety is a high priority.

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

Additionally, institute a zero-tolerance policy for behaviors that put employees at risk, such as drug or alcohol use, intimidation, harassment or fighting. These behaviors not only endanger those who engage in them, they put your entire workforce in harm’s way.

To decrease the potential for fraud, have a clearly defined policy for documenting workplace injuries and treating them promptly when they occur. At minimum, the documentation should include:

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

• An evaluation by a health care professional immediately after the injury and, if state law allows, a blood or urine test for drugs or alcohol

• Witness reports, including statements from other employees, supervisors and non-employee witnesses.

• A description of the conditions at the workplace at the time. For example, was all equipment in working order and properly secured?

• A supervisor’s statement regarding all actions taken after the event

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

What to Do If You Suspect a Worker’s Compensation Claim Is Fraudulent

In many places the United States, insurance fraud is a crime.

Any employer who has valid reasons for believing an employee has filed a fraudulent workers’ compensation claim should report it to the Department of Insurance in his or her state. Contact information for the appropriate officials and agencies is available online at the U.S. Department of Labor’s Office Workers Compensation Programs.

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

Additionally, it’s important to notify your workers compensation insurance provider of any suspicious claims and keep your coverage up to date. If you have questions or concerns, contact us at 516-292-3780 any weekday between 9 a.m. and 6 p.m. to set up an appointment for an insurance review, or request a free consultation online now.

* The Myth of Workers' Compensation Fraud

Protect Your Business Against Fraudulent Workers’ Compensation Claims By Floyd Arthur

www.CarmoonGroup.com

• Tags: Workers’ compensation insurance, Workers’ compensation insurance covers, Workers’ compensation insurance premiums, Workers’ compensation claims, Workers’ compensation fraud, Fraudulent workers’ compensation claims