Protect Your Small Business from Worker’s Compensation Fraud


A small business that incurs several workers compensation claims in one year is no laughing matter. It can drive any business owner into anxiety and nail biting worry. Small business owners are a constant victim of workers compensation fraud. But there is a solution to all this worriment. Get a contractor insurance to help put your mind at ease. This way you won’t need to put a camcorder in every corner of your establishment to spy on your employees. This type of insurance for contractor aims to help identify fraudulent claims and fight it.

Claimant fraud takes place when an employee deliberately lies in order to collect claims or benefits. A lot of employers become fidgety about employees staying off work for a long period of time but still collecting benefits. State law dictates that injured employees don’t need to go back to their jobs right away unless the attending physician gives them the thumbs up sign to get back to their jobs.

Here are some tips to catch workers who may be committing worker’s compensation fraud;

  • Unreachable employee. This is a common practice for employees committing double dipping or employees who are working at another job while taking in benefits from another employer. This is considered as fraud.
  • Regular claimant for worker’s compensation. A new employee with a series of records on worker’s compensation claims is enough to raise red flags for the business owner.
  • Dissatisfied employee. An employee who’s just been fired or reduced in rank may have motive to cook up or manufacture a fake claim.
  • Various recounts of the incident or the accident. An employee who tells the story of the accident differently every time he’s asked or claims a different story from what witnesses are saying is another red flag to watch out for.
  • Employees with recurring accidents during Mondays or Fridays should raise suspicions. This employee may be double dipping.
  • A no-witness case accident is something hard to believe especially if your employee is hardly alone. It’s so easy to make a claim especially if there are no witnesses to validate what actually happened.

Good contractor insurance can give you your much needed coverage but each claim should be fully investigated. But your insurance for contractor should not be abused unless you want to be slapped with very high premiums. The saying “prevention is better than cure” is something that can also be applied here. The best way to protect your business from these fraudulent claims is to be proactive.

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