Workers’ compensation insurance is designed to financially protect both you and your employees in case an accident or injury occurs on the job. It’s not just a good idea to have workers’ comp, it’s mandatory in all states but Texas.
Because workers’ comp is considered “no-fault,” meaning employees do not have to prove that the employer was to blame for their injury, the majority of claims are approved. As long as the employee files their claim on time, has witnesses to their accident, and has sought medical attention for a fairly serious injury, the employee will receive their benefits. But there may come a time when an employee files a claim that doesn’t feel right to you. In that case, you do have options and can choose to fight the claim. Here’s what you should do.
1. File the Claim
Even if you know a workers’ comp claim is illegitimate, you should always file the claim if an employee comes to you with one. Gather all the information and report it promptly, keeping in mind that you can be penalized for not reporting a work-related injury. You are paying your premiums to your insurance company so that they will deal with these matters, and it is the insurance claim adjuster’s job to determine whether a claim should be accepted or denied. If you are thorough in your report and work closely with the adjuster, there is a good chance that an illegitimate claim will be denied.
2. Know Your State’s Procedure
While workers’ comp is required in almost every state, each state has its own procedures for dealing with claims, as well as for disputing claims. Speak to your insurance carrier to find out what you need to know about the process in your area.
3. Work with Your Claims Adjuster to Contest the Claim
Once a workers’ comp claim is reported to your insurance company, they will assign an adjuster who will contact you and the employee, and review medical records. The adjuster will ultimately decide whether to deny the claim, but at this point you will know more about the claim than the adjuster. If you have knowledge that the employee lied, or was injured off the job, take this time to gather all the information you have and speak to witnesses to the event. Write down specifics like dates and keep records in case you are asked to produce them. 
Most importantly, tell the adjuster right away that you think the claim is questionable. Making clear in your initial report that you think there are grounds to deny the claim does two things. First, it lets the adjuster know that they may have to file an extension – workers’ comp claims need to be completed in a set amount of time, and disputing a claim may require more time to investigate. Second, marking your claim as questionable from the beginning actually gives you more of an adjuster’s attention. They will take extra time to speak with you, review medical records and look for red flags such as:
- A new employee who has immediately filed a claim
- An employee who has immediately hired an attorney after being injured
- Claims from employees who may be “disgruntled,” such as those who have recently been fired
- Employees with poor attendance, poor work records, or financial problems
- Injuries with no witnesses, or that occurred in an area where the employee doesn’t usually work
- Injuries that occur late on a Friday or when returning to work on Monday
Finding one of these red flags doesn’t necessarily mean anything, but if an adjuster notices that more than one exists, they will dig further to find out if the claim is fraudulent.
4. Dispute the Claim
Even if the adjuster does not deny the claim, you still have the option to dispute the claim. In some states, like Texas, you will have to fill out a form or attend a hearing. In other states, like New York or Tennessee, you might have to go before a judicial panel or speak with a workers’ compensation arbitrator assigned by the state. But no matter what state you are in, you will most likely have to defend your position orally, in writing, or both, and will need to back up your case with the records you kept at the beginning of the claim.
Workers’ comp is about more than just protecting your business from lawsuits, it is also about protecting your valued employees from suffering more than they need to after a work-related injury. Nobody would want to deny a legitimate claim, but if you find yourself faced with one of the rare cases of an illegitimate claim, you should know that you have rights, too. And remember, if you have any questions about workers’ comp or any other type of commercial insurance, EZ.Insure is here to help. We will connect you with a knowledgeable agent who will listen to all your concerns and will never hound you with unwanted calls. To get started simply enter your zip code in the bar above, or speak to an agent by calling 888-350-1890.
