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Levels of workers' compensation fraud remain steady across the U.S.

Given the troubled state of our economy over the last few years, most people would probably think that the rate of employee fraud - as it relates to workers' compensation - would probably reach record lows, as workers would not want to engage in any type of risky behavior that could potentially jeopardize their employment or land them behind bars.

Unfortunately, this has not proved to be the case.

According to the Coalition Against Insurance Fraud (CAIF), the rates of workers' compensation fraud have actually remained steady or increased across the U.S. despite poor economic conditions. In fact, the nonprofit - financed by the insurance industry - estimates that work comp fraud in the U.S. routinely reaches billions of dollars each year.

While these high rates of work comp fraud translate into higher costs for employers, they also translate into higher costs for consumers.

"Those costs just get passed on to all of us in higher prices at department stores, grocery stores and other businesses," said James Quiggle, executive director of the CAIF. "That's a lot of money we end up paying in a very down economy."

According to the CAIF, work comp fraud accounts for the largest share of overall work-related fraud, comprising roughly 39 percent.

While we often discuss the high rates of work comp fraud here in California, the situation is similar elsewhere.

To illustrate, the Florida Division of Insurance Fraud has announced that the rate of work comp fraud increased by double digits in 2010, while state courts ordered restitution of over $63 million to be paid in 1,676 fraudulent work comp cases in 2010.

Interestingly, while employee fraud remains prominent, another form of work comp fraud - employers falsely holding out that they have the requisite level of work comp coverage - is now the fastest growing.

Workers compensation fraud/employee fraud is a very serious crime. If you suspect that such a crime has been perpetrated against your organization, you should strongly consider speaking with an experienced workers' comp defense attorney.

This post was provided for informational purposes only and is not to be construed as legal advice.

Related Resources:

Worker insurance fraud up, but bosses do it, too (The Tampa Tribune)

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