Workers compensation insurance has been the subject of fraudulent activity for a long time and the new statistics released by the National Insurance Crime Bureau now estimates the costs are upwards of $5 billion a year. It was also found to be the most common type of insurance fraud complaints in the state of Pennsylvania.
Fraud in workers compensation insurance occurs when an employee or an employer provides claim information that is false and/or misleading. This fraudulent activity doesn’t just affect the insurance company, it affects everyone. Insurance costs rise significantly, making it difficult for businesses, especially small businesses, to afford payments.
Experts suggest that a good work environment can help prevent workers compensation fraud from occurring. They say that when employees are satisfied and feel loyal to their job and employer, they are less likely to commit fraud in workman’s compensation. Those that feel connected to their work and their co-workers will not pursue false claims.
Pennsylvania is not the only state where workers compensation fraud is going on but violations found within that state face a sentence up to seven years in prison and have to pay fines up to $15,000.