Johnny, the owner of a restaurant he had been running for many years, received a notice from his insurance company regarding a work injury claim from his own restaurant’s cook. In January 2014, his cook, Mr. Liu, claimed that he fell off the ladder which caused injuries to the right side of his body including his right hand, ribs, and neck. Johnny immediately took a look at the surveillance footage of the security cameras that were installed in the kitchen and found out that Mr. Liu was actually just sitting on the floor and purposely kicked the ladder so that it would seem like he had fallen. Other employees heard the sound of the ladder falling and ran into the kitchen, seeing Mr. Liu lying on the floor, making it seem like he had just fallen from the ladder.
After the footage was provided to the insurance company’s fraud investigation department, they concluded that the employee had falsely reported the alleged injury to get monetary benefits. It was also reported that Mr. Liu had falsely reported the same trauma injury claim at his previous job back in 2012. It turns out that he even tried convincing another employee to do the same thing because it was an easy way to get money. The case was sent to law enforcement for further criminal investigation, and in July 2014, Mr. Liu was convicted of committing felony insurance fraud. Not only was he ordered to pay $10,000 in restitution, but he was also on formal probation for three years, and had to complete 80 hours of community service.
To all the business owners out there, workers’ compensation fraud is something you never want to have to encounter or deal with. In the event of any work-related injury claim, there is a high chance that your workers’ compensation premiums will increase. Workers’ compensation fraud investigation is also a very long, tedious, and time-consuming process.
Employers Insurance came up with a list of ten ways to identify workers’ compensation fraud. What are some warning signs you should be aware of?
- Injuries reported on Monday: Employees come to work early on Monday and the first thing they do is report being injured, or they claim being injured late Friday afternoon but do not report it until Monday
- Change in employment: An injury is reported immediately before or after a strike, job termination, layoff, end of a big project, etc.
- Suspicious medical providers or legal consultants: An employee’s medical providers or legal consultants have a history of handling suspicious claims, or the same doctors and lawyers are used by those who make suspicious claims
- No witnesses: There were no witnesses of the accident and the employee’s description does not match or support the cause of the injury
- Inconsistent, conflicting statements: The employee’s description of the accident is inconsistent or conflicts with the medical history, witness statement, or their initial report
- Claims history: The employee has had a history of reporting suspicious work injuries or litigated claims
- Treatment is refused: The employee refuses the diagnosis to further confirm the nature and the extent of the work injury
- Postponed report: The employee does not provide a reasonable explanation and continues to delay reporting the claim
- Missing and difficult to contact: The employee is hard to reach and suddenly stops showing up to work without any notice or any explanation
- Frequent changes to their personal information: The employee is constantly changing their addresses, jobs and physicians
Under worker’s compensation, if the employee’s work-related injury turns out to be reasonable and valid, employees can receive work-related injury benefits, which is about two-thirds of their current salary after being reviewed by the insurance company. As an employer, it’s important to note that if you find out that the employee is receiving these benefits and claim to be recovering at home, but in reality you find out that they are starting a new job, you should let your insurance company know.
If any one of your employees gets injured in the workplace, as an employer or a manager, you must be extra careful. Pay extra attention to all your employees and their behaviors as well. Any important information must also be filed with the insurance company’s underwriter and claim adjuster.
KCAL Insurance Agency has over 30 years of insurance experience and handles thousands of businesses in Southern California. We provide comprehensive workers’ compensation and commercial insurance plans, as well as risk prevention strategies, carrying a wide range of products to meet the various needs of different industries. As a KCAL client, you will also be able to receive free legal consultation provided by professional business and labor law attorneys, helping you reduce and clear any potential labor law lawsuits.