The Not-So-Silent Resource Drain: Workers’ Compensation Fraud

workers compensation fraud

For any business, the main objective is to earn as much profit as possible. There are two main methods through which a successful venture can accomplish this. The first is to increase your revenue-producing assets. This entails that you invest in things that contribute to your overall production either by upgrading your facilities, or by hiring more capable team members. 

The second method through which you can achieve a higher net profit is by minimizing your unnecessary expenses. This can be achieved by further refining existing processes and developing better processes to replace those which are deemed obsolete. 

Another method is by simply avoiding trouble altogether through sheer vigilance and awareness. And to this effect, fraudulent workers’ compensation claims are among the many leaks that can drain your business of precious resources that would have otherwise been put to better use to create more revenue. 

Workers’ compensation is an insurance system that is meant to cover medical expenses incurred by employees during the performance of their duties as entailed by their job or position. While the majority of these types of claims are truthful and in good faith, there remains about a billion dollars worth of false claims that are submitted annually. Any unnecessary expenditure is money that could have been put to better use. 

So, what exactly are the signs that every business owner should look for in order to help plug these leaks? What are the factors that you need to consider in order for you to properly ascertain the truthfulness of a workers’ compensation claim? 

Witnesses 

As a rule of thumb, if there are no witnesses to the accident, then there can be no means of proving that an accident did indeed occur and whether or not the employee’s injuries were a result of that accident. An employee cannot simply have you take his word for it. Ask any Philadelphia work injury lawyer and they’d tell you the same thing. Not only that, but they’re bound to help you take other factors not included in this article into consideration. 

Medical History 

Another factor to look into is the employee’s medical history. This is relevant, especially if the employee has a previous medical condition that could have caused the injury and has nothing to do with any form of negligence on the company’s part. 

Hobbies 

There’s a practical reason why recruitment specialists ask about an employee’s hobbies. It’s not that they actually hold a real interest in an applicant’s out-of-work activities, but rather it’s meant to be a record of any potential injuries that could be sustained outside of work. When an employee claims that an injury occurred because of his performance of his duties on the job, it’s a good idea to check your employee’s hobbies for anything that may have caused the injury. 

Timeliness Of Report 

When you get into an accident, the first thing you’re going to do after getting medical attention is to report the incident. Any delay in reporting the incident makes the entire scenario seem fishy in general with workers' comp being mentioned. And while there may be valid reasons for having to report the incident late, there shouldn’t really be any reason that would stop an employee from reporting such an important matter right away.


I hope you enjoyed this blog post about the potential financial drain on your company known as workers' compensation fraud.

Interested in more articles about workers' compensation?

Read Related Resources:

How To Reduce Workers' Compensation Expenses

The Workers' Compensation Claims Process Outlined

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