Preventing Workers’ Comp Fraud

The majority of workers’ comp claims filed in Texas and other states stem from real instances of on-the-job injuries. Unfortunately, the people who cheat the system drive up costs for employers, consumers and insurers.

As a corporate executive once noted, if workers’ comp fraud were a legitimate business in the United States, it would rank among the Fortune 500 companies. Indeed, according to the National Insurance Crime Bureau, workers’ comp fraud totals $7.2 billion a year. The Texas Department of Insurance notes that insurance fraud is the second most profitable crime after drug trafficking.

Fraud is

Fraud is lying for financial gain. Claimant fraud is the most common type of fraud. Claimant fraud happens when workers:

  • Fake or exaggerate injuries
  • Collect benefits for injuries that were not work-related
  • Double-dip, or continue to collect benefits after returning to work
  • Engage in activities that are inconsistent with their injuries

Fraud is not

Delayed recovery. Some injured workers take longer than expected to recover and return to work. This is not fraud. Injured workers do not have to return to the job until their treating doctor releases them.

Recreational activities. Injured workers can participate in recreational activities that are consistent with their medical restrictions.

Suspicion without evidence. To prove fraud, a carrier must have evidence that the injured worker knowingly collected benefits he or she was not entitled to. Evidence includes medical records, witness testimony, business records and surveillance video.

Employer’s role in fighting fraud

Educate your employees. Teach them that when they commit fraud, they don’t just cheat the insurance carrier; they cheat their employer and their co-workers. Make it clear that the company has zero tolerance for fraud. Visit the Fighting Fraud section at for more information.

Report your suspicions. Learn the red flags for fraud and contact your carrier to report suspicious activity.

Cooperate with our investigators. Notify your carrier of new information in a case, attend hearings when requested and allow employees to testify.

Red flags for fraud

Contact your carrier immediately if you identify two or more of these indicators in a claim:

  • Tip from a credible source
  • New or disgruntled worker
  • No witness to alleged injury
  • Inconsistent or illogical description of incident
  • Injured worker difficult to contact
  • Injured worker acts upset when contacted
  • Suspicious injury that happens on Monday or Friday

Employers and their employees can reduce the bill by learning the red flags for fraud and reporting suspicious activity immediately. If you recognize two or more of the red flags in a Texas Mutual claim, call our Fraud StoppersSM program at (800) 488-4488, or email

One Response to Preventing Workers’ Comp Fraud

  1. wonderful publish, very informative. I wonder why the other experts of this
    sector do not notice this. You must proceed your writing.
    I am sure, you have a huge readers’ base already!


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