March
1, 2008
Protecting Your Business from Workers’ Comp Fraud
By
Alandale Insurance Agency
Tempted to hire a private investigator to spy on employees
claiming workers’ compensation? You’re not alone. Luckily,
covert operations can be avoided by taking a proactive approach to
preventing workers’ compensation fraud.
Here are some effective tips for shielding your business.
Watch for red flags
Knowing common signals of workers’ compensation fraud is an
important step in protecting your business. Some red flags to watch
out for are:
· There are no witnesses of the accident (or the
only witnesses are friends/family members of the injured employee).
· It is difficult or impossible to reach the
employee.
· The employee changes his or her story about the
accident.
· The accident happened on a Friday afternoon but
wasn’t reported until the following week.
· The accident happened outside of the employee's
normal working hours.
Not all claims that occur under these circumstances are
fraudulent, but it may be worth it to take a second look.
Make safety a priority at your business
Creating a safer work environment not only lowers the chance of
accidents, it also reduces the opportunity for employees to fake an
injury. Your business should frequently conduct safety inspections
of all work areas and any equipment. Remove hazards immediately, and
be sure to document the repairs you make.
Thoroughly investigate workplace injuries
Take the time to review any surveillance videos of the area where
the incident allegedly took place. Also, be sure to interview all
witnesses shortly after the accident happens — and take any rumors
of dishonesty or fraud seriously.
Hire wisely
People who lie on rйsumйs are more likely to lie about
workplace injuries. Make it a routine part of your hiring process to
conduct background checks on all applicants. And don’t neglect to
verify their references and any other information included on their
applications and rйsumйs.
Clearly communicate your workers’ compensation policies
It’s important to discuss your workers' compensation policies with
all employees. Tell them what to do when an injury occurs, and
explain that insurance costs affect the amount of money available
for raises and bonuses. Also, make sure you tell your employees that
workers’ compensation fraud is a serious crime that will lead to
termination and prosecution. Post fraud awareness posters in
conspicuous locations explaining what fraud is and what its
consequences are.
Implement a return-to-work program
Workers’ compensation fraud is less inviting when employers have
transitional duty for injured employees. Make sure your employees
know that if they get injured on the job, your business will work
with the doctor to help them return to work as soon as possible.
Stay in touch
Don’t lose contact with employees who are off work because of an
on-the-job injury. Injured workers who are hard to get a hold of
might be committing workers’ compensation fraud. Contact them
periodically, and document each contact (whether you were able to
reach them or not).
Get signed statements when employees leave
In your exit interviews, obtain signed statements from exiting
employees stating that they have or have not had any unreported
injuries at work. This will go a long way in discouraging
post-termination claims.
Workers’ compensation is a major expense for most businesses,
and workers’ compensation fraud makes it more costly for everyone.
It pays to take a proactive stance to reduce workers’ compensation
fraud at your company.
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