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Small Business: How to detect Workers Comp Fraud

A former NY Port Authority officer pleads guilty to workers comp fraud after getting caught singing in a band while collecting disability from the police department for an injured arm…

An actor dances energetically in a high-profile commercial even as he was collecting over $51,000 in workers comp benefits for a previous injury that should have rendered him disabled…

Related: How the insurance company checks if your auto claim is legitimate

These and other fraudulent workers comp claims harm every business. While most workers compensation claims are legitimate, it is important to learn how to detect the estimated one or two percent that are not.

Five Potential Red Flags in a Workers Comp Claim

  • If an employee submits an injury claim over a week later than he or she was hurt, suspicions should be raised. Talk to the claimant and any workmate that may be able to give leads about the potential of fraud.

  • If a worker files a claim following the weekend, do the research. Is this employee involved in any recreational activity that could have caused the injury while away from work? Was there any talk of engaging in a sport over the weekend between other workfellows? Ask pointed questions to the injured worker. Watch out for body language that may indicate he or she is not telling you the genuine facts.

  • If there were no eyewitnesses at the scene of the injury, there may be a possibility that the claimant is making it up. Inquire about the backdrop and location of the injury to see if the claimant incurred an injury at a restricted site that he or she should not have entered. Pinpoint who the first person to see the injured worker was following the episode. Interview that person to get to the bottom of the facts.

  • If an injured worker declines an x-ray, MRI or other test that can accurately diagnose the injury, question why this is so and insist on getting related findings.

  • If the injured worker fails to present a detailed account of what occurred, your suspicions should be on alert. Use your business knowhow and common sense in detecting any discrepancy in his or her injury story.

In the event your personal investigation leads you to believe there is foul play, follow up with your insurance claims’ adjuster.

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Summary: We all lose when there is a workers compensation fraud. Here are five ways you may be able to tell the claim is not genuine.








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