Identifying Employer’s Liability Fraud

Fraud within the insurance industry is as old as the concept itself, but most insurance companies actively seek to put an end to this practice. In cases where fraud is suspected, it is not unusual for private investigators to be retained and utilised to prove cases in court and as grounds for case dismissal, or denial of claims. It is not unusual during a time of recession, for insurance liability claims to increase exponentially, and often disgruntled workers may attempt to pass off artificial claims. There are a several indicators that investigative personnel look for in addition to the normal procedures, that may indicate any signs of fraud.

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What further complicates insurance companies’ attempts to identify fraud is that often, suspicious claims appear to be so, due to negligence on behalf of employers. There is a reasonable expectation placed upon companies to afford labourers a safe working environment, and to additionally, utilise sound business practices. Unfortunately, this is not always applicable, but not all accidents or injuries sustained on the job are caused by employer negligence. Whether or not the grievance lies with employer or employee, insurers cannot deny paying out the claims to justified recipients.

One indicator that catches the attention of accident investigators when a claim being considered, involves the length of time that has passed between the time of the incident and when the claim was sought. When an injury occurs, a report should be filed immediately with a supervisor, and properly logged into the accident report and first aid logs. Rest assured, that insurance investigators will thoroughly inspect these records when considering any claim.

An exception, in which logs and reporting evidence are of little assistance, occurs in situation where the claimant’s injuries were sustained over a long period of time. Typically, these cases involve deafness, mesothelioma, and other traumas or conditions that could be considered related to long-term exposure to harmful substances or noisy environments during the course of their daily labour functions.

Regardless of the type of injury sustained, investigators thoroughly consider evidence provided by medical experts. These findings are typically compared to entries in the company’s accident log book, and are scrutinized for previous entries that may be similar to the current claimants case.

Accurate record keeping is detriment to employers in need of evidence during the course of claim investigations. It has been noted that some companies attempt to fraudulently alter records after claims arise, with intentions of removing any similar incidences recorded, that may shine a negative light on their business. Suspicion of this occurring, is a red flag to investigators, and could later play a large factor in whether or an insurance provider will later seek damage recovery from the company.

Records, such as these, if properly kept, can often benefit companies in litigation, and this is one of the most effective forms of defence a business can possess when seeking to defend themselves against fraudulent activities or claims. Notes of great importance include:

• Employees absence history, especially since the incident
• Prior work related claims of a similar nature reported by employees
• Locating any witnesses to incidents and taking a detail statement
• Noting any confrontations between claimant and co-workers or management
• Document possible employee discontent, such as less hours or denial of a raise
• Correspondence or communication from staff referencing their claim or condition

In closing, the most fail-safe and effective defence against prior and future claims that an employer can afford themselves and their staff, is to consistently provide a safe working environment, and ensure the existence of adequate employer’s liability insurance coverage at all times.

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