Workers comp fraud costs Americans billions of dollars every year--as much as $5 billion annually according to the National Insurance Crime Bureau. False claims drive up the cost of premiums to employers, and it isn’t just giant conglomerations that are targeted. Small businesses are equally at risk. If you’re concerned, here are some common worker comp scams to watch out for and some easy ways to help protect your small business from workers comp fraud risks.
6 Workers Comp Scam Red Flags
None of these alone is proof you’re being scammed, but they’re all red flags that a claim of on-the-job injury may merit further investigation:
- Accidents that happen on Mondays -- they’re often weekend off-the-job injuries in disguise.
- On-the-job injuries with no witnesses to corroborate them.
- Claims filed by a disgruntled employee-- like someone who has recently been reprimanded, demoted or just has an axe to grind.
- An employee who has a history of filing workers comp claims.
- A marked delay in reporting an injury or illness.
- A shift in the story the injured worker tells depending on whom he or she is talking to.
6 Tips to Protect Your Small Business from Workplace Fraud
- Install surveillance cameras to monitor employees on the job.
- Take care to weed-out serial scammers before you hire them. A pattern of frequent job changes or unexplained employment gaps could indicate a scammer. Do background checks and verify information provided by applicants.
- Have a written workers comp policy and require each new hire to sign and date a document saying he or she received it and read it.
- Put a workplace safety program in place and review it with your staff on a regular basis.
- Make sure employees understand the hard costs of workers comp fraud and fraud’s impact on the financial well-being of the company and the employees.
- Prominently post hotline numbers where employees can anonymously report suspected fraud to your insurance company or your state’s fraud detection unit.
Learn more about workers compensation insurance for small business and compare policy quote online here.