Almost all states now have a workers’ compensation system in place. Employers are required to get insurance for all their employees, which will compensate them in case they are injured or fall sick in the course of their jobs.
Being a company insurer might seem like the most lucrative contract for your insurance agency, but unfortunately, many issues plague this contract nowadays. Many insurers are making huge losses from workers’ compensation fraud by choosing to forego the services of a work injury attorney from Salt Lake City when processing their claims.
There are various forms in which this crime is perpetrated, which might not be evident without legal help. Here are the categories of fraud that might affect your insurance agency.
Employee Fraud
In this type of fraud, an employee intentionally misrepresents the extent of his injuries or makes multiple claims under different identities for the same injury. The primary reason for employee fraud is monetary gain. Some workers file fraudulent claims so that they can get time off work to pursue other interests, which their employer would not agree to.
The common reasons are a free vacation or time off to pursue another business venture. By filing an injury claim, the employees earn an extra income from your agency without arousing their employer’s suspicions.
Employer Fraud
This occurs when employers intentionally misrepresent facts about their workers. The primary motivation for this is to get compensated for a premium price, which is far below what you are obligated to pay for the policy. Employer fraud also involves an intentional misrepresentation of an injury’s or policy’s facts to deny the employee compensation or discourage him from pursuing it.
Misclassification of employees as independent contractors or the nature of their work are also common forms of employer workers’ compensation fraud. These misclassifications are generally categorized under premium fraud.
Health Care Provider Fraud
This involves health care workers who attend to an injured employee. The primary objective behind health care provider fraud is to get higher payments for services offered or get paid for services that are not rendered. In most cases, the health care provider will bill for treatment, examinations and drugs not done or dispensed, or carry out unnecessary treatments.
Adjuster Fraud
While most insurance agencies work to fight fraud from without their companies, adjuster fraud involves their employees. Your adjuster, in this case, will conspire with a claimant including the employee, employer or health care provider to tamper with evidence to deny or increase the settlement of a claim.
In exchange, he gets a bribe, a portion of the settlement or future referrals from clients. Adjuster fraud not only costs your agency in lost cash but also paints it in poor light among would-be clients.
The above forms of fraud are the primary causes of losses in the insurance sector. To guarantee that the policy you sell for workers’ compensation to different companies remains profitable, get a well-informed lawyer to advise you before the payment of claims. This way, you can weed out these forms of fraud and act accordingly to avert losses.