The insurance industry had overseen various issues in the era of COVID-19. Unfortunately, worries surrounding fraudulent workers’ comp claims have grown.

It’s common to see a rise in fraudulent claims in the insurance industry during times of economic duress, such as in the United Kingdom in the 1990s, when three percent of insurance claims were deemed fraudulent.

As more state legislatures try to make it easier for employees to file workers’ compensation claims for COVID-19, the pandemic may drive up fraudulent claims. The reason why? Some might claim they contracted the virus while at work to find ways to keep food on the table. 

Fraudulent Workers’ Compensation Claims During COVID-19

Workers’ compensation fraud happens when someone knowingly makes a false statement to receive workers’ compensation benefits or prevents someone else from receiving their benefits to which they might be eligible.

Insurance fraud amongst workers’ compensation is a primary concern for insurers, especially as the coronavirus pandemic continues to spike and impact the economy and job market. Fraudulent claims undercut the claim system’s reliability, cause needless setbacks in treating real injuries, and create a shadow over the genuine claims fielded every year.

However, there are factors in play during downturns responsible for injuries and legitimate workers’ compensation claims. For instance, workplace conditions may deteriorate because employers fail to replace older equipment, leading to a rise in injuries. Another concern might be that employees who keep their jobs might have to work longer shifts, leading to injuries among under-trained employees.

With this in mind, fraudulent workers’ compensation claims might become more likely as they challenge the definition of what is legitimate and fraudulent because they occurred in a disturbed work environment where there are no witnesses to substantiate an injury. For example, an injury that occurred in someone’s home that now doubles as their home office can toe the line between valid or not.

In response, investigation teams are looking into growing their online detection methods, such as utilizing artificial intelligence-based data analysis. Advancements in AI now allow claims teams to see through complicated supply chains and long lag times to detect fraud that previously went unnoticed. Data scientists can use accumulated data to trace sequences of in-referral and out-referral, revealing certain links between fraudulent individuals and entities. From there, data scientists can display any questionable network patterns usually seen in fraud networks.

While nothing is currently concrete, it’s a fact that COVID-19 has completely upended the way we work and live. The insurance industry is no exception, so insurers, employers, and individuals need to prepare for challenging times ahead in workers’ compensation claims and claims methods.

About InsureMyWorkComp & Their Workers Comp Solutions

InsureMyWorkComp is a digital brokerage that helps clients find the right workers’ compensation solution for their business needs, such as occupational accident insurance. Unlike other online platforms, we will help you to work with an agent who can provide you the right solution for your risk profile. Our staff has over 50 years of workers’ compensation underwriting and sales experience, and we are confident that we will provide you the support that you need. For more information or to get a quote, contact us today at (855) 340-9138.