With the economy such that it is, we are finding there are many more worker compensation claims being filed than previously. An employee may feel a layoff is eminent or perhaps he/she was laid off and has no other job in the horizon. Suddenly you receive papers from a lawyer stating the employee was injured on the job. No one witnessed the injury or perhaps it is a cumulative trauma case (injury that has occurred over years because of repetitive motions at work). This person could be a person you have employed for years and have had a good relationship with. Many of these claims are legitimate, but some are fraudulent. The fraudulent ones are the most frustrating to the business owners.
According to the California Department of Insurance, insurance fraud occurs whenever “someone knowingly lies to obtain some benefit or advantage to which they are not otherwise entitled or someone knowingly denies some benefit that is due and to which someone is entitled” Worker compensation fraud takes many forms: fake an injury (or lie about the extent of the injury), claim that a non-work injury is work related, failure to disclose a prior injury, collecting benefits for the same injury from more than one employer or working while receiving worker compensation benefits.
In addition, there are “claim mills, the term for organized worker compensation fraud rings. These rings are comprised of chiropractors, doctors, attorneys and their employees who help in the recruitment of people to file fraudulent claims. There are also times when providers (doctors, chiropractors) receive legitimate claims but then illegally render unnecessary treatment, overbill for services or bills for services that were not performed.
There are steps you can take to prevent claims and reduce your worker compensation costs. Your goal should be to prevent, as many accidents are possible. Careful hiring, thorough training, drug testing and promoting safety practices can accomplish this.
However, a claim is bound to occur. How you handle it will make all the difference. First and foremost, make sure you carry worker compensation insurance. If you have it, don’t allow it to lapse. Having no coverage leaves you vulnerable, and once it cancels you will most likely pay a higher premium for your next policy.
If you have an injury, report it promptly. When your employee informs you he has an injury, you are on notice of this event. Contact your insurance carrier and give them a full report. Don’t wait for the attorney letter. Do it now.
Once you are aware of the injury, do your own investigation. Determine how it occurred, where there any witnesses, etc. Give that information to your insurance carrier.
It is important for you to communicate with your insurance carrier, i.e., the claims adjuster who is assigned to the case. You must work together. Even if you believe the claim is a fraud, the insurance company has to spend money to investigate the claim. Don’t hesitate to exchange information. It is important for you to monitor the claim. It will benefit all for a rapid closure of the claim.
Modified duty and early return to work programs are important. This is the most efficient way to control worker compensation costs. I realize that many times in our small businesses, that is limited availability for modified duty. However, if there is a way, do it.
I hope that this has given you a little insight into the world of worker compensation claims. This is a part of your business that you cannot ignore.