Did you know one in 10 small businesses is worried that an employee on its team will fake an injury and commit workers compensation fraud?

In a recent article for Property Casualty 360˚, AmTrust’s resident workers comp expert outlined six signs of a false workers comp claim. He also offers several ways to spot the fake claim.

Is an Employee Faking a Workers Comp Injury?

Here are six signs of a potentially fraudulent workers comp claim to share with your workers comp clients, according to Matt Zender, AmTrust workers compensation insurance product manager:

1. You’ve heard employees gossip about the employee’s injury.
2. You can’t get a clear idea of what actually happened from those involved.
3. The injured party is refusing diagnostic procedures like an X-ray or MRI.
4. There aren’t any witnesses to the injury event.
5. The claim is reported on a Monday morning.
6. The claim is reported more than seven days after the injury occurred.

Individually, these signs do not conclusively mean a workers comp injury is false. But when more than three of them are present, it might be time to take a closer look at the situation and the employee’s claim. Workers comp claims are expensive both at the time of injury and over the long run.

How to Handle Workers Comp Claims

As an employer, it’s not unusual to be skeptical of a false workers comp claim and see some as a neon stop sign. But encourage your clients to consider these facts before thinking the worst of their employees:

• Experts estimate that only 1-2% of workers comp claims are fraudulent. That means it’s highly unlikely that an employee is faking their injury. Consider the situational factors that might have contributed to the circumstances of the suspicious injury and claim.
• According to Safety and Health magazine, new employees are three times more likely to be injured on the job than seasoned and experienced team members. Consider the employee’s age, experience and job training when determining whether their workers comp claim is legitimate.
• Training new employees on safety and compliance is both expensive and time-consuming—the recruiting, hiring and training process can cost a business in a big way.

How to Report Workers Comp Fraud

If an employee makes a fraudulent workers comp claim, it is important to understand and follow the proper procedure to ensure that the business is protected. If an employee is taking advantage of their employer’s workers comp coverage after investigating the incident, the employer should report their findings to their claims adjuster. Armed with the facts and specifics, this professional will be able to take care of everything quickly with minimal disruption to your business.

Learn more about workers comp insurance for small and midsized businesses from AmTrust.