One of the most expensive coverages that many business owners face is workers’ compensation insurance. Not only is the insurance costly, but it also has one of the highest rates of fraud. There are several things you can do as a business owner to assist in preventing fraudulent claims. These steps may also lead to lower insurance costs in the long run:
1. Thoroughly check an employee’s references. If possible, find out if the employee was away from their previous job for any significant period of time (this could indicate a previous accident).
2. Educate your employees to ALWAYS report workers’ compensation injuries promptly.
3. Institute a safety program and make sure it is clearly communicated to all employees.
4. Post your insurance company’s fraud hotline number in the employee break room.
5. Offer an incentive program to employees who are able to maintain a safe work environment and a low accident rate.
How can you recognize a possible fraudulent claim?
1. Employees are never available when you need to reach them.
2. There are no credible witnesses to the accident.
3. The incident occurred prior to a layoff or termination.
4. The employee was on probation and/or about to be written up.
5. The incident was not reported in a timely manner.
6. The employee can only provide vague details which seem to change frequently when questioned.
7. No visible injuries.
If you suspect that an employee may be committing a fraud, contact your worker’s compensation carrier immediately.
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