THE EXPERT:
Jason Gudaitis
Chief Operating Officer, Technical Services
Gallagher Bassett
QUESTION: Can you explain what ghost claims are and their significance?
A: Fraudulent claims, or ghost claims, are becoming a significant concern as insurers
have encountered an increase of suspicious incidents. These false claims range from staged automobile accidents to fabricated accidents on construction sites and unnecessary surgeries. Various professionals, including lawyers and doctors, are allegedly involved in these schemes.
An increase in claims can affect different areas of business in a multitude of ways.
Higher Premiums: When a company experiences a higher number of claims, its workers’ compensation insurance premiums may rise.
Financial Strain: Smaller businesses are particularly affected by increased workers’ compensation claims as they lack the finan- cial cushion of larger companies. The surge in claims can strain budgets, making it challenging for these businesses to allocate resources to other essential areas of operation.
Productivity and Payroll: While workers’ compensation benefits cover some lost wages, employers may still owe additional wages
not covered by insurance, creating a financial burden for businesses, especially if the injured employee is unable to return to work for an extended period.
Safety Record and Reputation: Frequent claims can significantly diminish a company’s safety record, affecting its ability to bid for projects or attract new employees.
There are several services and solutions available in the industry to help businesses mitigate the occurrence and impact of fraudulent claims.
Access Control Technology/Systems: Implementing an access control system can help control who enters and exits a facility, keeping a log of employees who have checked into the job site. This can help stop non-employees from gaining access to the site or fabricating an on-site presence and claiming injury, as well as confirm the presence of employees on the site where they claim to have been injured.
Risk Management: Developing a comprehensive safety plan, known as a site safety plan (SSP), is crucial to controlling construction risk. An SSP should cover project, workers, public safety, and equipment placement, ensuring the site meets or exceeds safety standards. Safety professionals should design the plan and visit the site to verify its implementation, working with site staff to minimize hazards and meet regulatory safety program requirements.
Safety/Loss Control Consultants: Safety consultants understand current regulations, laws, and violations; can perform OSHA inspections; and provide recommendations to correct potential issues. They also serve as a qualified resource for continual training, improving work processes, reducing the probability of costly claims, and enhancing overall safety.
Embedded On-Site Investigator: For large construction projects, an embedded investigator can work alongside on-site safety personnel to provide an extra layer of insurance against misbehavior and can respond immediately to incidents on the job site, securing and preserving evidence, recording witness statements, and photographing the scene to avoid evidence tampering.
Immediate Response Investigations: Immediate response investigations involve deploying investigators to the scene of an incident to secure and preserve evidence, record witness statements, and gather crucial information before stories change or legal counsel is involved.
Incident Mitigation: Strategies should include surveillance conducted by licensed casualty adjusters and private investigators to gather evidence, locating claimants or witnesses, and conducting background investigations to obtain a detailed snapshot of the claimant’s history.
Trial Preparation: This includes ensuring availability and communication with witnesses, insured individuals, experts, and independent medical exam doctors in a timely manner, as these can greatly impact the outcome of the case.