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Protecting your business against workers’ compensation fraud

On Behalf of | Feb 21, 2022 | Business Law

As an employer, you probably have a compensation plan that covers workers against workplace accidents. This also means that you have probably dealt with compensation fraud at some point in time. This can happen in several ways, from employees making fraudulent claims to a service provider wanting to benefit themselves from the situation.

It is a common practice in the world of insurance fraud, and you need to safeguard your business against such claims. Here is what you can do as an employer.

Screen your employees beforehand

You might want to thoroughly vet potential employees before hiring them. Some red fags to look out for include prior fraud cases or negative reviews from former employers.

Have a well-structured workers’ compensation process

Your human resource department should be well trained to notice incidences of fraud before the business loses a lot of money. In addition, having a system that works efficiently will prevent any slip-ups that might make fraud go unnoticed.

Conduct due diligence

You need to investigate every claim, no matter how minor. Look into the details of the accident and, if possible, testimony from eyewitnesses. If there are significant contradictions, you may need to proceed carefully when dealing with the claim.

It is important to utilize approved medical providers specializing in workplace injuries. Doing so will prevent cases where doctors stretch the treatment process or delay giving the patient clearance to benefit themselves financially.

Have a no-tolerance policy for fraud

Your company policies should have no space for fraud. The position of the business on this should be clear that everyone will be held accountable for their actions, whether they are employees or third parties.

Given the high cost of workers’ compensation fraud, you need to protect your business against such claims. You can only do this by staying ahead of the situation and taking the right action whenever you suspect fraud.