Real and fraudulent workers' comp claims
Even though you have workers’ compensation coverage, claims will result in considerable indirect costs. That’s why you should watch out for fraudulent claims
There are some studies that show the indirect costs of workers’ compensation claims for employers can exceed the medical and wage replacement benefits paid by insurers. Indirect costs could include:
- Any wages paid to the injured employee not covered by the insurance company;
- OSHA fines;
- Overtime costs;
- Legal fees;
- Costs related to works stoppages;
- The cost of the time spent handling the claim;
- The costs of hiring and training a replacement;
- Productivity losses due to rescheduling and new employees having to get up to speed;
- Costs associated with issues caused by the accident; and
- Pain and suffering claims by the employee.
If you have a policy that includes Experience Modifications you’ll also face higher premiums as the result of a workers’ compensation claim.
While it will be the insurer’s responsibility to investigate the validity of any claim, there are some things you should look for and, if necessary, discuss with your insurer.
Be wary of accidents or injuries that occurred when the employee was alone. The fact there are no witnesses may or may not be intentional.
Scrutinize accidents or injuries that are reported to have happened on a Monday. It’s possible there’s an actual injury, but it could have occurred over the weekend.
Repeated accidents claimed by one person can be indications of a number of things; one is possible fraud. There are studies that indicate more than 35% of those who file a claim have done so before.
Don’t play interrogator, but pay attention to how the employee describes the accident. Do they resist making eye contact? Do they pause for a long time before answering a question? Are there inconsistencies in their story?