How to Avoid Workmen's Compensations Scams

Workmen's compensations scams are multi-million-dollar problems for companies. Some states are more prone to having this problem than others, with California and New York leading the way. If you are a business owner, even a single scam can have a great impact on your company's future. If you don't have the proper insurance, it may even mean bankruptcy.

Instructions

Difficulty: Moderate

1. Have a good hiring policy in place. Knowing who your employees are and what their histories include will clue you in on any possibility that they will file fake workmen's compensation claims. Background checks are a good option or you may simply check in with past employers to learn about a person's work ethic and history.
2. Avoid workmen's compensation scams by establishing a series of preventive practices. By educating your employees, providing training and handing out safety equipment, you can reduce the chances that somebody will file a fake workmen's compensation claim. With such practices in place an employee will not be able to claim work hazards as a reason for her problems.
3. Build a team of knowledgeable employees to handle claims. One of the best ways to avoid workmen's compensations scams is to stop them before they are even filed. The person in charge should understand the importance of looking for medical help immediately, dealing with the paperwork involved and making sure everything is covered when an injury occurs.
4. Look for red flags in employee behavior and circumstances. This can be anything from frequent complaints to denied requests for a raise. Scams related workmen's compensation claims often follow problems at work or are filed immediately before a strike or an announcement of early retirement.
5. Hire a workmen's compensations fraud investigator. Instead of depending on the investigator provided by your insurance company, look for a third party who can provide neutral feedback. An investigator can handle video surveillance, check on employees who claim to be injured but cannot be reached and double-check medical paperwork to make sure it is authentic.

Tips & Warnings

• A great way to avoid fake claims is to make sure the claim investigation is as thorough as possible. Confusing claims, lack of witnesses and stories that seem to change over time are all clear signs of fraud.
• Make it clear from the beginning that your company will prosecute people who file fake claims. Letting employees know that scams will not be tolerated may reduce the chance of them filing scam claims.