Learn more about workers' compensation insurance fraud statistics, the top kinds of workers' compensation insurance fraud, and the top warning signs to look for if suspected.

1. Workers’ Compensation
Insurance Fraud 101

2. Copyright © 2014 EMPLOYERS. All rights reserved.
EMPLOYERS and America’s small business insurance specialist are registered trademarks of
Employers Insurance Company of Nevada. Employers Holdings, Inc. is a holding company with
subsidiaries that are specialty providers of workers' compensation insurance and services focused on
select, small businesses engaged in low-to-medium hazard industries. The company, through its
subsidiaries, operates in 30 states and the District of Columbia from 12 office locations. Insurance is
offered through Employers Insurance Company of Nevada, Employers Compensation Insurance
Company, Employers Preferred Insurance Company and Employers Assurance Company, all rated A-
(Excellent) by the A.M. Best Company. Coverage is not available in all jurisdictions and varies by
company. See www.employers.com for coverage availability.

3. More than
94%
of American
businesses
carry workers’
compensation
insurance.
Source Referenced: 1

4. That covers more than
135,000,000
workers across the United States
Source Referenced: 1

5. 4 In 2012, there were roughly 3
million non-fatal workplace
accidents.
That’s
nearly
injuries
for every 100full-time
employees.
Source Referenced: 2

6. While most claims are legitimate, studies indicate that 1 to 2% or more
of all workers’ compensation insurance claims are fraudulent.
Source Referenced: 3

7. Workers’ compensation fraud essentially falls into two categories
And claimant
fraud,
committed by
a worker or
provider.
Premium
fraud,
committed by
businesses.
(Misrepresentation of payroll, misclassification of employees or
falsely changing a businesses experience modification in order to
lower premiums)
(Attempts to cheat the system in order to receive more benefits
than are deserved)
Source Referenced: EMPLOYERS Anti-Fraud Department

8. The
Four
Most Common
Types of
Workers’
Compensation
Insurance Fraud
The False Claim
The injury NEVER occurred, or
was knowingly misrepresented
as a work-related injury.
Staging an accident also falls
into this category, which is a
worker intentionally injuring
himself to receive benefits.
Working While Collecting
Benefits
The claimant says that they
cannot or are not working to
continue receiving workers’
compensation benefits while
they are actually working at
another job.
The Exaggerated
Claim
Workers who initially sustain a
legitimate injury, but
exaggerate its severity to
collect more money and stay
off the job for a longer period
of time.
Fraud from the Top
Businesses can break the law
through premium fraud. The
two most common types of
fraud are underreporting of
payroll and employee
misclassification.
Source Referenced: EMPLOYERS Anti-Fraud Department

9. Top 10 Warning Signs of Potential Workers' Compensation Claimant Fraud
Experience shows that when two or more of these factors are present in a workers’ compensation insurance claim, there is a chance the
claim may be fraudulent. These are simply indicators, and many perfectly legitimate claims often contain some of these indicators.
Monday Morning Reports
Suspicious Providers
Conflicting Descriptions
Treatment is Refused
Claimant is Hard to Reach
Employment Change
No Witnesses
History of Claims
Late Reporting
Other Changes, such as to Physician,
Mailing or Home Address, Etc.
Source Referenced: EMPLOYERS Anti-Fraud Department

10. Red Flag Warning Signs of Potential Premium Fraud
These are simply indicators. A legitimate claim could have some of these indicators, however further investigation may be conducted by the
Policyholder uses a mail drop or post office box
for a business address
The business is located in another area of the
state from the producing agent’s location
An excessive number of certificates of
insurance issued on a small policy
An unusual ratio of clerical to non-clerical
employees listed
The business avoids audits by changing
carriers frequently
Reported injuries are not consistent with the risk
that was written
workers’ compensation insurance carrier.
Source Referenced: EMPLOYERS Anti-Fraud Department

11. Workers’ compensation fraud
costs the average consumer
$900
annually in reduced
paychecks and bonuses.
Increased Insurance Rates
Increased Health Care Costs
Revenue Stolen from Businesses
Source Referenced: 4

12. Do you have more questions about workers’
compensation fraud and what you, a small
business owner, can do to protect yourself
against it?
EMPLOYERS Fraud Hot-line
Call us: 1-800-750-3939
Email us: fraudfighters@employers.com
Do you want to talk to an EMPLOYERS
appointed agent about fraud and workers’
compensation insurance?
Click Here to
Get Started Now!
Sources Referenced:
1) David F. Utterback and Teresa M. Schnorr, “Use of Workers’ Compensation Data for Occupational Injury & Illness Prevention,” Department of Labor, 2010,
www.cdc.gov/niosh/docs/2010-152/pdfs/2010-152.pdf.
2) “Workplace Injury and Illness Summary,” Bureau of Labor Statistics, October 25, 2012, www.bls.gov/news.release/osh.nr0.htm.
3) Quoted in Greg Hunter, “Worker’s Comp Scams that Push the Limits,” ABC News, March 3, 2013, http://abcnews.go.com/GMA/story?id=127996.
4) Quoted in Selena Maranjian, “The Real Cost of Workers’ Comp Fraud,” Daily Finance, June 21, 2011, www.dailyfinance.com/2011/07/21/the-real-cost-of-workers-
comp-fraud.
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