Last week, we discussed the various claims that some employees will make to receive Massachusetts workers compensation. While the majority of your employees are honest and hard-working, it is best to always be on your guard. There may be one dishonest employee who is unsatisfied and looking for a way to make quick cash without working.
If your company allows employees to take advantage of your business, there are sure to be consequences. The price of workers compensation fraud is no joke! Here are five costly consequences:
#1: A higher premium. This may be the most damaging consequence out of all, especially for a small business. Insurers will pass the high costs of fraud onto the policyholder. In some cases, business owners cannot afford to pay the higher premium, leading to financial crisis or worse, being put out of business.
#2: A weaker business. A higher premium may depress a company’s income, lower employee morale, and lower employee productivity; again, ultimately these issues may put a company out of business.
#3: Additional indirect costs. Workers’ compensation claims may result in staff investigations, additional safety committee meetings, training costs, costs associated with attending hearings, overtime costs, etc. In fact, it is estimated by OSHA that the internal costs are often 5 times greater than the direct costs (medical and wages) for a claim.
#4: Loss of jobs and pay. A higher premium may force a company to downsize their employee-count. If a company is against cutting jobs, they may need to reduce their current employees’ salaries and benefits just to stay afloat. Both choices are damaging to a company and may negatively affect its image.
#5: Exhaustion of honest workers. If an employee goes on leave due to a “fake injury”, guess who is left to take on the extra slack: the honest workers in the office. The last thing you need is aggravation, stress and issues with your best employees.
At Wolpert Insurance, we do not want to see your business suffer due to Massachusetts workers compensation fraud. If you sense a fraudulent claim, never hesitate to investigate and let your claim representative know immediately! The last thing you need is a higher premium. That being said, we are here if you have any questions or concerns about your policy. Do not hesitate to contact us today!