Workers’ compensation fraud among employees is a game nobody wins. Every claim has an impact on an employer’s history, and costs related to fraudulent claims – in excess of $5 billion each year according to government statistics – are passed on to the insureds, directly impacting their premiums.

Commonly, any increase in state mandated workers’ compensation premium gets passed on to a company’s goods and services costs, or is pulled from dollars paid out in employee wages.

For agents, an insured’s loss history comes into play by making it difficult for them to offer a sound, affordable policy to service their client.

Employee workers’ compensation fraud can take many forms, and AmTrust Financial Services’ Don Houser, national director of the company’s special investigators unit, said the National Insurance Crime Bureau estimates one in 10 property and casualty claims nationwide have some element of fraud in them.

“The number of instances is trending upward, and that’s largely because there’s a heightened awareness of insurance fraud among insurance companies, employers and the general public,” Houser said.

How can you, as an employer, best guard against employee workers’ compensation fraud? Follow these four guidelines as a sound business practice.

1. Report the claim right away. File your state paperwork immediately to initiate the claim documentation process, particularly when and where the injury allegedly occurred, and send the employee right away to your preferred medical provider to document the injury.
2. Find and document witness testimony. It’s critically important to talk to other employees who may have witnessed the injury. Not many people today work by themselves, so it’s likely somebody saw it. A lack of documentation increases the suspicion of a claim.
3. Go to the videotape. Very few workplaces don’t have internal video today. If it’s an unwitnessed or questionable claim, preserve the video as critical evidence in your case. It can help document or refute what’s claimed.
4. Report any suspicions. If you suspect fraud, report it to the adjuster or to the insurer’s special investigations unit or fraud hotline, which can be done anonymously. The insurer resolve and address will investigate and help the questionable issues.

A workers’ compensation insurer can be a valuable resource for an employer with suspicions of fraud. Insurers commonly offer training for identifying fraudulent claims, reviews and investigations of suspected claims, and detailed reports to the appropriate authorities. Utilize these resources to help eliminate instances of employee workers’ compensation fraud at your workplace.