Workers’ Compensation insurance is designed to protect employees and businesses in the event of genuine workplace injuries. However, there is always a certain level of risk that employees will try to make fraudulent claims, leading business owners to incur unnecessary costs and operational disruptions.

Picture it, if you will:

• In a bustling restaurant kitchen at the end of a successful night, a staff member named Cammy walks by a freshly mopped area of the floor and proclaims, “If I slip and fall, I’m filing a Workers’ Comp claim!”
• Frank, a construction site crew member, is reminded to don his hard hat…again.
• Stan, a gym manager, is regularly observed tossing heavy weights back and forth between his hands while walking around the premises — a well-known safety risk.

In the world of Workers’ Comp insurance, these are what we call “big red flags.” Sure, Cammy’s comment about slipping could simply have been made in jest. But as Shakespeare once wrote, “many a truth is said in jest.” While Frank could also be a bit absent minded about wearing his hard hat, when do his actions (or inactions) cross the line to negligence? Stan, who as a manager certainly knows better than to toss around weights willy nilly, could just not be paying enough attention to what he’s doing in any given moment.

These examples underscore the importance of how clear safety protocols, consistent use of personal protective equipment (PPE), and other proactive workplace measures, can help prevent both avoidable workplace injuries and fraudulent claims.

Here are some actionable tips:

Tip 1: Establish and Enforce Workplace Safety Measures

The mere existence of official workplace safety measures that are openly communicated and enforced by management can go a long way in protecting your business from avoidable or fraudulent Workers’ Comp claims.

• Post “CAUTION – WET FLOOR” signs in areas before floor mopping begins and until the floor is dry and provide staff with non-slip shoes in workspaces where slick floors may be a danger.
• Establish a safety checkpoint at worksites to assess workers for proper safety equipment.
• Train and frequently review safety policies — and don’t forget posting signs for daily visual reminders.

All of these steps also help to ensure that safety measures are followed improves alignment with OSHA regulations.

Tip 2: Thoroughly Investigate Claims

While it’s true a Workers’ Comp claim will be investigated by your insurance provider, having an internal system in place to review the details of every reported incident can further help prevent fraudulent claims.

• Security cameras — without audio — are practical, widely-used tools for clarifying the cause and details of an employee’s injury even before a Workers’ Comp claim is filed.
• Collect statements from any available witnesses to provide other viewpoints to an accident.
• Require prompt medical treatment to ensure the employee has the best chance of proper recovery and for professional documentation of the injuries sustained.

Tip 3: Know Employee Work Histories

History matters. This isn’t to say that people with past claims aren’t being truthful. Every claim should be assessed; however, patterns of past incidents may indicate a need for a closer eye.

• Conduct background checks and safety assessments prior to hiring new employees.
• Immediately address repeat safety infractions to avoid future safety risks.
• Ensure that all screenings and assessments comply with federal and state guidelines.

Tip 4: Pay Attention to the Timeline

Delayed reporting can make Workers’ Comp investigations more difficult. This is where we’ll note that it’s also important to understand specific reporting requirements that vary by state.

• Clearly communicate reporting requirements and deadlines to employees — don’t we all love reading the Workers’ Comp section of the employee handbook?
• Require immediate reporting/documentation of any accident for more accurate recollection of key details.
• Stay on top of state-specific Workers’ Comp guidelines — these can and do change.

Where there’s insurance available, there is also the risk of insurance fraud. Vigilant business owners can take proactive measures to potentially save a lot of time and trouble from dealing with nefarious injury claims.

To be better prepared, be sure to discuss the details of your Workers’ Comp coverage, and other tips for protection, with your insurance advisor or carrier. Don’t have Workers’ Comp insurance yet? We’ve got you — partner with Direct WorkComp to get the best quotes from quality carriers FAST!