Magazine article Occupational Hazards

Tips for Preventing Comp Fraud

Magazine article Occupational Hazards

Tips for Preventing Comp Fraud

Article excerpt

As employers worry about rising workers' compensation premiums and workers worry about coverage, an industry leader notes that fraudulent compensation claims are partly to blame for rate increases and that some of the fraud can be prevented.

"Fraudulent workers' compensation claims cost American businesses anywhere from $1 [billion] to $20 billion annually," said Tim Fargo, president of Omega Insurance Services, a St. Petersburg, Fla.-based company that investigates individuals suspected of workers' compensation fraud for insurance companies and private insurers.

Fargo offers businesses the following six tips for preventing fraud:

1. Learn more about the people you want to hire. Check credentials and references, and go beyond those offered by the prospective employee. "In a tight labor market, employers tend to use a stethoscope as a hiring tool," he said. "AS long as he's breathing, he's go a job."

2. Increase your risk management. What kind of safety measures are in place? Do you pay attention to ergonomics? Do you use safety equipment?

3. Do not wait to call your insurer. If you have a claim, get as much information as possible, including statements from witnesses, and contact your insurance carrier within minutes. Fargo noted that too many business owners worry that calling the insurer will cause premiums to go up. In fact, the longer companies wait to call, the more problems they are likely to have with the claim.

Fraud Popular Scam

Faking or exaggerating injuries to collect wage loss benefits from an employer's workers' compensation policy is among the top four insurance fraud schemes, according to the National Insurance Crime Bureau (NICB). …

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