What Motivates Workers’ Compensation Fraud?

Fraudulent claims can have a tremendously adverse impact on a business’s profitability, the morale of the employee base, and the long-term viability of your operation. Understanding what motivates an individual to consider and potentially file a fraudulent workers’ compensation claim can be insightful to try and mitigate such behavior. 

What motivates fraud?

1. Perceived financial gain motivates the largest percentage of fraudsters. They believe that filing a fraudulent claim or exaggerating the extent and severity of a legitimate injury is a viable way to gain benefits to which they are not entitled. Individuals facing financial difficulties may see fraudulent claims as a way to address their immediate financial needs.
2. Job-related stress. Individuals may experience significant job-related stress or feel they are working in a hostile environment. This may lead some employees to file fake claims to cope with their stress or secure time off from work.
3. Pre-existing injuries. Some workers may attempt to hide pre-existing injuries or conditions and falsely attribute these to a workplace injury to receive medical care and/or compensation.
4. Job dissatisfaction. Disgruntled employees may file fraudulent claims as a form of retaliation against their employer.
5. Job loss or termination. Workers facing imminent termination, adverse performance counseling, or the end of an employment season may file a fraudulent claim as a last-ditch effort to secure benefits before losing a job.
6. Lack of sick leave or PTO. Individuals with insufficient sick leave or paid time off may file a false claim to continue receiving pay while off work.
7. Peer influence. Some employees may be influenced by others who have successfully filed fraudulent claims and believe they can do the same.
8. Lack of medical insurance. Individuals with inadequate medical insurance, high deductibles/copays, and similar circumstances may see the submission of a fraudulent workers’ compensation claim as a way to cover medical expenses.

To counter these threats, ICW Group leverages proprietary technology to evaluate over 3,000 data points for red flags, and our Special Investigations Unit has skilled investigators to uncover suspect claims, assigning three times the number of claims for investigation versus the industry average. All claims are automatically checked for signs of fraud multiple times throughout the life of the claim. Take a look at the many ways we’ve helped our work comp policyholders fight fraud. If you suspect you are a victim of workers’ comp fraud, contact our anti-fraud hotline at 855-429-3728.