Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.

Workers’ Compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue their employer for the tort of negligence. 

While most people would agree with the idea of a workers' compensation system, unfortunately, there are people who try to defraud it in an effort to earn an extra buck. These individuals include both employers and employees. For this article, I will focus solely on the most common workers’ compensation fraud, claimant fraud (i.e., when an employee commits the fraud).

Claimant fraud includes false claims and exaggerated claims. These claims typically involve soft-tissue symptoms, such as headaches, whiplash, or muscle strain, which are all very difficult to disprove. In order to increase the value of the claim, claimants will also include multiple body parts. The most common types of claimant fraud includes reporting fake claims, injuries not received on the job, exaggerated injuries, and claimants working for another employer while collecting benefits from an injury claim.

Claimant fraud causes extreme frustration, animosity, and can lead business owners to question all claims, including those that are legitimate. Employers can feel helpless, especially when the system gives the benefit of the doubt to fraudsters. There are, however, red flags that both employers and insurance companies can pick up on to fight against these individuals seeking easy money.  

Ten Red Flags

The top ten red flags employers can look for on a possible fraudulent claims are: When the claimant;

1. Hires an attorney the day of the alleged injury.

2. Has several other family members also receiving workers’ compensation benefits.

3. Exhibits a strong familiarity with the workers’ comp system.

4. Has been disciplined several times or is disgruntled and fears termination.

5. Was engaged in seasonal work that is about to end.

6. Continues to cancel or fails to keep medical appointments or refuses a diagnostic procedure to confirm an injury.

7. Changes doctors when the original suggests they return to work.

8. Is seen working at another job while collecting total temporary disability.

9. Is reluctant to return to work and shows very little improvement.

10. Has problems with workplace relationships.

Contact me to learn strategies for combating fraudulent claims before and after it is reported.