According to the FBI website, insurance fraud (non-health insurance) is estimated to cost $40 billion a year. American consumers pay between $400 and $700 a year in increased premiums due to fraudulent claims.

As a business owner, you’ve worked hard to maintain a profitable and successful business. Each year employees and customers make claims for Workers’ Compensation, slip and fall accidents, product liability and more. Many people are being sincere and truthful.

Those who file fraudulent claims, however, can cost you more than just the settlement.

Making an impact on insurance fraud

Here are basic tips for preventing fraudulent claims:

• Carefully screen job applicants – often times background checks will reveal a history of suspicious injury claims.
• Listen to your employees – disgruntled employees who complain about conditions may be more likely to file claims. Listen to their concerns. Correct safety issues and improve working conditions.
• Stay in close contact with injured employees – communication helps the injured person feel valued. They know their progress is being monitored and may return to work sooner.
• Modify duties as appropriate – you can save on claims by bringing the injured employee back to work as soon as possible with modified work duties or a reduced schedule.
• Establish consistent procedures – ensure you have policies in place to report injuries and make claims. Be consistent with your approach and document everything. Interview injured employees and any witnesses.
• Communicate your policies – new hire orientations are a great time to make it clear what your procedures are. Reinforce the training yearly. It is an employee’s right to file claims for legitimate injuries. Make sure employees understand the consequences for filing fraudulent claims.
• Make it easy to report fraud – establish a procedure so that employees who suspect fraud can report it. Take suspicions seriously and investigate. Report any suspicious activity to your insurance company.
• Surveillance cameras – the use of cameras in public areas of your building may help prove or disprove claims such a slip and falls.

It may not be possible to predict every act of fraud in advance. Taking steps to mitigate your risk as a business owner will go a long way to reducing the frequency and severity of these events. If you do feel that an insurance claim made against your business is fraudulent, you will want to work with an attorney who handles insurance fraud.