Workers Compensation Fraud

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What Is Workers Compensation?

Workers compensation is a type of insurance designed to replace the wages and cover the medical bills of employees who have been injured on the job. Generally, in exchange for coverage under the insurance, the employee surrenders the right to sue for negligence. The employee can still file suit against their employer or another party if other torts occurred, such as:

The causes of action an employee may have will vary by state.

How Frequently Does Workers Compensation Fraud Occur?

While an exact figure is impossible to determine, studies have indicated fraud only occurs in 1 to 2 percent of claims. According to statistics taken from the U.S. Bureau of Labor, more than 3 million nonfatal workplace accidents occur yearly. If 1 to 2 percent of those are fraudulent, that’s roughly 30,000 to 60,000 instances of fraud. In a system that costs over $90 billion a year, the dollar amount of that fraud can add up quickly. For example, in California during the 2011-2012 fiscal year alone, it is estimated that over 5,000 arrests were made for workers compensation fraud, amounting in upwards of $300,000,000 of potential losses.

Who Can Commit Workers Compensation Fraud?

While many assume employees only commit this type of fraud, employers and providers can commit worker’s compensation fraud too.

Should I Seek Legal Advice?

Workers compensation is designed to facilitate the quick treatment of injuries that occur on the job. Unfortunately, fraud can complicate this system and hurt those who have already unnecessarily suffered. If you feel you have been subject to workers compensation fraud, consulting with a local employment attorney can help ensure your rights are protected. Additionally, if you fear an employee is abusing your workers compensation insurance, an experienced lawyer can help you handle the situation.

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Last Modified: 06-23-2014 04:45 PM PDT

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