Costs related the claim-related fraud amount to billions of dollars for American companies every year. Workers’ compensation fraud may originate from an employee, medical provider, policyholder or an insurance company vendor. The most common type of fraud occurs when an employee tries to claim workers’ compensation when the person isn’t really injured or was injured outside of the work environment.

Businesses can take five proactive steps that promote safety in the workplace and reduce fraud arising from workers’ compensation claims.

1. Write a Policy That Takes a Zero-Tolerance Stance With Regard to Insurance Fraud

Explain what insurance fraud entails so employees know what to look for when it comes to fraud. Encourage employees to report suspicions of fraud as soon as possible.

2. Create a Culture of Safety Within Your Company

Have a safety plan in place and train for safety first. Make sure everyone reads and understands the safety plan. The easiest way to track that is to have every employee sign a form acknowledging that the employee has read and understands the plan.

3. Hold Safety Meetings Regularly

This places even more emphasis on safety within the company culture. Place signage in strategic areas. Incentivize safety by rewarding employees who exhibit safe practices at work.

4. Hire the Right People

Onboard employees who understand safety comes first. Discuss safety during the initial interview with a prospective employee. Perform thorough background checks, because these checks may find instances of fraud in an employee’s work history or within the legal system. Other red flags for safety issues may include an extensive criminal background, exaggerated details about injuries, and an inconsistent work record.

5. Invest in a Video Surveillance System

One of the biggest protection methods against fraud comes from technology. A video surveillance system can be installed that monitors all parts of a working area. Where legal, video footage may help determine if a workers’ compensation claim is fraudulent or not.

Businesses should report all workplace injury claims to their insurance company as soon as possible. The same is true for fraudulent claims. The sooner the insurance company knows about your fraud concerns, the faster an investigation happens and the sooner the claim can be resolved.

All of these tips and safety measures save companies money in the long run, which is why this is a winning plan for your business.


We have just added Massachusetts to the markets we serve.

To lean more about what we offer in Massachusetts or any of the 40 other states we serve, contact Bruce Winterrowd at 630-416-7954 or bwinterrowd@workfirstcasualty.com.