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Fighting comp fraud: 'Fear factor' works

Jim Giuliano
by Jim Giuliano
May 18, 2009
1 minute read
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Workers-comp fraud costs employers $30 billion a year, according to insurance-industry estimates. So someone is cheating. Your best approach to the problem: Stop it before it starts.
Most of your company’s employees probably are honest people who wouldn’t fake an injury to collect workers compensation. Keep in mind, however, that it just takes one cheat to cause your comp bills to go up and – not incidentally – hurt the morale and productivity of good people.
The best way to stop the problem? Call it the “fear factor.” Warnings,
when they come from the right source, really do help, according to
the National Insurance Crime Bureau.
Strongest ally
Your strongest ally in this fight – if you’re not self-insured – is your insurer. It can educate and warn employees that they’re playing with fire when they fake an injury.
Consider asking a rep to come in and talk to employees about:

  • how adjusters and reps get trained to pick up on red flags that are the trademarks of fraudulent claims – no need to get specific; just telling employees about the system can be enough to discourage a crook
  • what happens when cheaters are caught – firing, criminal charges, restitution – and how the insurer aggressively goes after cheaters  “to keep the premiums down for honest companies and their hard-working employees like you”
  • actual cases of fraud that have been uncovered – and the penalties meted out to the cheats.

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