Learn How to Identify Workers Compensation Fraud

How to avoid fraudulent workers compensation lawsuits that could damage your company

avoid labor lawsuitsWorkers compensation costs can add up and possibly destroy your business’ hard-earned reputation. While no company wants to discourage its workers from filing legitimate claims, the ability to detect fraudulent claims can help reduce expensive insurance rates. So how can you avoid falling victim to workers comp fraud and a frivolous labor lawsuit? Here are some ways you can minimize your risk and learn to spot false workers compensation claims.

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  1. Document well
    Make it a priority to do due diligence when documenting and investigating any claims of illness or injuries. Maintain contact with the employee and keep records of all documents shared, this helps all information related to this claim become more searchable and traceable if needed later on. By documenting well you’ll avoid any confusion and define the standards you expect from all your employees.
  2. Hire a risk management company
    To make sure you remain in compliance with current labor laws and standards it can be a good idea to hire a risk management company. Construction related companies especially often rely on a team of experts who are updated current and proposed labor law regulations and provide training for the skilled labor your organization needs. Risk management firms can help you protect your organization by minimizing workplace injuries and absorbing risk on your behalf. To learn how to minimize your risk exposure see what Construction Labor Contractors has to offer.
  3. Learn the signs of workers compensation fraud
    Though all legitimate claims should be filed and paid according to regulation, learning to spot fraudulent claims is an important part of the review. The following are some indicators that the claim needs further investigation:
  • The claim coincides with a layoff or termination
  • The claimant has another job
  • The person has doctor’s notes that are contradictory
  • The claimant has relocated out of state

These indicators do not mean that a claim needs to be rejected, only that the claim needs to be further investigated.

Fraudulent workers compensation claims increase insurance rates and can be a large cost to your construction company. Learn to properly investigate the validity of the claim can help protect your company and your workers from the fallout of a fraudulent lawsuit. Many construction related companies turn to risk management firms to help establish a solid risk management program with our human resources outsourcing

Focus on the growth of your business, and let CLC handle administrative concerns.

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