CONTRACTORS INSURANCE TIPS
How to Avoid Bogus Workers Compensation Claims
Facts On Illegal Claims
False workers compensation claims can have a harmful effect on residential building companies. The numbers of fake claims vary from 1% to 20%, so it is not easy to obtain a solid picture of how widespread the phony claims are, and what they cost business owners.
Reasons For False Claims
The reasons for false claims stem from many dissimilar motives and circumstances:
A company needs to show that it appreciates its workers. When an organization fails to sustain a high level of morale, a discontent worker may go as far as creating an accident on the job to collect workers compensation. Businesses need not only to correct errors, but also they need to praise employees for well done work. Happy workers are less likely to file worker compensation claims.
Many owners want the most out of a worker at the least amount of money. Low salaries that are below the norm can create a workforce that cannot meet their personal obligations. Filing a phony workmen comp claim can allow an employee to get income and have more time to make undeclared money; by creating a home repair service, where the claimant adds those funds with his workers comp.
Hazardous Work Circumstances:
Safety is not always the number one concern of some building contractors. Workers, who are faced with laboring at an unsafe building site, may be tempted to file for workmen comp. In a hazardous situation, it would not be hard for an employee to fake an injury. The owner’s disregard for the well-being of his crew could easily motivate a worker to file the claim to gain the time to locate a job with a much safer working conditions.
Ripping Off The Owner:
Once and a while, an employee wants to rip off the owner of a company. Sometimes this worker is spurred on to do this by egotism or just plain spite. One way to take advantage of the boss is sometimes by filing a false workers com claim. Spotting individuals like this can be done through effective interviewing or by listening to the worker and what others have to say about this person.
Some workers compensation scam artists, who include phony medical clinics and shady lawyers, hire runners to recruit employees to file bogus claims. Stress to workers that getting involved in this type of scam can entail serious fines and jail time. Encourage staff members to report any approaches by runners to management.
Battling Bogus Claims
- Require employees to inform management directly after about any accidents on the job.
- Create a rapport with your workers. Use your conversations to gauge what type of ethics that a person has and would that individual be likely to file a phony workers comp claim.
- Teach your staff the techniques that will keep them out of harm’s way. Make sure that the persons in a restricted zone are there to complete tasks.
- Utilize monitors to identify and rectify hazardous conditions. Monitors should also reprimand any employee, who displays unsafe behavior on the job. Foremen are automatically responsible for worker safety, and should not be the designated monitor.
- The monitor needs to be well-informed about the work to be evaluated for safety issues. This individual should have a lighter schedule, so he can effectively apply the safety precautions. By OSHA regulations, the monitor cannot supervise more than six workers. Monitors can gather and give information about a witnessed accident.
- Check on the backgrounds in-depth of each new worker. Ascertain whether a recent employee has been convicted of fraud.
- Let your employees know how invalid workers compensation claims by co-workers can put their jobs at risk and add to their duties.
- Offer monetary rewards to workers, who identify an individual that has filed a false worker comp claim.
- Check with your insurance company to find out if they employ insurance investigators to validate claims. These investigators monitor the claimant’s behavior. If the “injured” worker is performing hobbies that require an individual to be in fit physical condition or doing odd jobs that are strenuous, the investigator reports that to the insurance company. These types of reports usually result in the immediate termination of the claim.
- Make sure that your insurance company utilizes medical staff and procedures to determine return to work status. If you feel one of your workers may be ready to return to work, notify the insurance company’s medical staff.
- Company owners are required by most state to carry workers compensation insurance. Do not embark on a project without workers compensation insurance. This coverage protects your business as well as your workers from liability. Without workers comp, your exposure to risk is dramatically expanded, and that places your personal assets in jeopardy.
Workers compensation claims will increase an employer’s insurance costs. However, do not make the mistake of questioning the validity of a claim when honest accidents and injuries are part of the building trade.