Obviously most Workers Compensation claims (work injuries) are valid and are paid so your team members can get back to work as soon as possible.  However, there are situations where people might try to take advantage of the system and below are some of the most common fraudulent situations as seen by insurance companies:


1.     faking an injury at work to get paid time off

2.     exaggerating the severity of a legitimate injury to get additional time off work with benefits

3.     reporting an injury as work-related when it actually occurred elsewhere

4.     accepting alternate employment and not reporting it to the insurance company, concealing income from another job, or lying about being able to return to work


1.     understating the company payroll to reduce insurance premiums

2.     claiming employees as independent contractors

3.     lying about employee classification codes to lower premiums

4.     failure to carry workers’ compensation insurance

Some ideas to prevent fraud…

To decrease individual fraud, the employer should follow the following procedures:

1.     Report ALL injuries as soon as possible

2.     Provide information to all injured workers specifying their rights and responsibilities in the workers compensation process and advise them every claim will be investigated

3.     Follow your established reporting procedure, including reporting all claims to the carrier within ONE business day and to your state workers comp authority

4.     Refer all claims to medical case management for nurse triage and recommendations

5.     Obtain statements from any witnesses

6.     Check to see if the injury was caught on your surveillance devices, if appropriate

7.     Take pictures of damaged equipment, e.g., vehicle involved in a collision

8.     Make sure your claims handler investigates ALL claims

To avoid employer fraud, all employers must:

1.     Carry the required workers compensation insurance. Check with your insurance broker, state workers compensation bureau and/or attorney if you’re unclear.

2.     If your employees cross state lines, make sure your workers comp insurance does, too!

3.     Periodically review your employee class codes, employment status and company payroll so that you are providing accurate information.

Overall, all parties involved with workers compensation claims need to recognize that any time they provide false information, they are committing an act of insurance fraud, and that the states are taking action against these cases. Ignorance is not a defense.