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Construction Insurance Bulletin
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How Common is Workers Compensation Fraud?
If you work in construction for any length of time, you're going to wind up dealing with worker's comp, and if you deal with enough worker's comp cases, you're going to have a few that make you go "Hm..."
The good news is that worker's comp fraud isn't as common as many would think, and the even better news is that it's usually pretty easy to spot when it happens. Anyone who's able to fake their way into a nice steady stream of compensation would probably make more money going into acting. Here are some of the telltale signs that you may want to investigate further:
The Injury is Reported on Monday Morning
This is a clear sign of an injury that may have taken place over the weekend, and an employee who wants to collect some worker's comp.
Nobody Saw the Accident Take Place
Obviously there are plenty of accidents that happen when nobody's looking, but most experienced construction workers know better than to do a dangerous job with no backup.
A Long History of Claims
Unless your employee is named Moe, Larry or Curly, a long history of injury claims is usually a sign pointing to fraud.
Refusal of Treatment
If your employee is suffering a real injury actually sustained on the job, then they shouldn't have an issue with letting a medical professional take a look at it.
If the accident takes place right before an employee suspected that they were going to be fired, or right before a strike takes place, there's a chance that they may be trying to get it while the getting's good.
Claimant is Hard to Reach
A claimant who is supposedly disabled but never seems to be at home to answer the phone or shoot an email back at you is quite often, well, not at home.
Any one of these signs is, in and of itself, not a big deal. If a union worker happens to fracture a toe right before he was going to go on strike, it shouldn't be his tough luck that he's now injured AND out of work. However, two or more signs in one case do start to look a little suspicious.
Again, worker's comp fraud isn't really all that common. We only see the worst-case-scenario in the news, because the fact that most claims are legit simply doesn't make for a very entertaining read. But that doesn't mean that we shouldn't be vigilant.
HMS Insurance Associates, Inc.
Is It Time to Replace Your Safety Gear?
You want to get your money's worth out of every safety harness, hard hat and pair of goggles, but push these items to their limit and you're going to wind up with injuries and accidents on the jobsite that cost you a lot more than a few new helmets. Here are a few signs that it may be time to toss that old safety gear in the trash:
The 5 Year Expiration Date
Many safety items come with a five year expiration date. However, a safety harness is not a gallon of milk. The manufacturer has no way of knowing how much use that gas mask or safety harness is going to see. You definitely don't want to strap yourself to a telephone pole with a six year old harness, but an item that gets a lot of use might not make it to year five. Think of the expiration date as a "definitely-no-later-than" date, not a guarantee of safe usability.
What Can Be Repaired?
Obviously, the strap will wear out on a pair of goggles before the lenses do. It's a good idea to keep some extra straps around and replace them at the first sign of wear. Likewise, hard hats and gas masks often come with replaceable straps. Generally you don't want to try and do any DIY mending on parts that can't be easily replaced.
Signs Of Damage
A crack, a hole or a serious chip in a pair of goggles or a hard hat or in the buckles of a safety harness is a sure sign that it's time to retire that piece of equipment. Any cuts along the straps of a safety harness, rips and tears in gas masks or other hazmat wear like gloves and safety clothing. It's not a drinking glass or a desk fan, your life may depend on the integrity of your safety gear.
Signs Of Normal Wear & Tear
You'll start seeing normal signs of wear and tear the minute you take a new hard hat out of the box. Little scuffs, scrapes and nicks are to be expected. Unlike a trust old wallet that's been with you through good times and bad, this wear and tear can lead to total failure when you least expect. Once equipment starts feeling flimsy, thin, or you just can't see through the goggles anymore, it's time to pack it in.
It really comes down to a simple question: do you trust your equipment? Maybe a hard hat that sees some serious trauma but doesn't show any obvious signs of damage has another good year in it, but do you want to stake your head on it?
HMS Insurance Associates, Inc.
Projects That You May Want To Decline
It's always difficult to let a job go. You don't want to pass on a decent paycheck, you don't want to disappoint the client, you don't want to leave your crew wondering when the next job is starting, but sometimes a project comes along that you really shouldn't accept. Here are a few examples of jobs where you may want to take a pass:
You're Not Seeing Eye To Eye With The Client
Maybe they don't understand what the job really entails, maybe they're being unreasonable or they're a poor listener, or maybe you and the client just aren't a good fit. There are instances where it's not so much the job as the client that you want to avoid.
Some red flags for difficult clients include the following:
- They don't like the idea of putting 10% down on the job or they try to argue about your requested payment schedule.
- They schedule you and a competitor for the same interview.
- They keep you waiting on signing the contract.
If a client is being a real pain, it's best to abandon the job as soon as possible. Don't try to reason with them, don't try to make it work, just cut and run before they give you an ulcer.
The Budget Won't Fit The Project
The quickest ways to squeeze a big project out of a small budget are to cut corners in safety or in craftsmanship. With the former, your crew gets hurt, and with the latter, your reputation takes a hit. If you can't talk the client up to a bigger budget, you may want to skip the job entirely.
It's Just Not Your Area Of Expertise
We've all done a little bit of work outside of our specialties. If you're a cabinet maker, for instance, you might fall back on your electrical experience and do a little bit of rewiring here and there in order to make room for the new installation. When you're looking at, say, extensive plumbing work, on the other hand, and nobody on your team specializes in that, you may want to simply recommend someone else to the client.
Taking on any work where you're not comfortable with the job, the working conditions, the client or the budget rarely ends well. Challenge yourself, sure, but don't challenge yourself in ways that could lead to serious harm to yourself, your income, your reputation or your crew.
HMS Insurance Associates, Inc.
Get the Budget and the Deadline You Need
In any field of contract work, you're going to run into clients who want to save time and money by pushing their freelancers to cut corners. They pit multiple contractors against one another in a bidding war or they get you invested in the project before telling you that their budget is only half of what you need to do the job correctly. Maybe you can pull a job off in less time and for less money than the next guy, maybe you're just that efficient, but when you try to finish the job in less time and on a smaller budget than you're comfortable with, you run into a whole host of problems.
You can't do your best work. One of the most rewarding parts of the job is driving through town with a friend and saying "See that roof there? My team tiled it." or "We installed the windows on that drug store across the street." Good work is a source of pride, and a source of new clients. You don't want a rushed job to your name.
An under-budgeted, time-crunch job usually winds up being more expensive and taking way too long because people wind up being injured, tasks need to be redone and everyone has to put in a whole lot of overtime in order to try and get the project finished under unreasonable restrictions. You're not actually doing your client a favor by agreeing to a job that you know you won't be able to finish with the time and money allotted.
You do have some bargaining chips in your pocket when a client is asking you to complete a job under unrealistic conditions.
They might just not realize how extensive a project is and might well be eager for your input. If they do worry that you're overcharging, ask them to call some of your competitors and compare quotes.
You can always walk away from a job when you're not confident that you can complete it safely, under budget, and within the projected timeframe. No matter how badly your crew needs the work, they don't need the injuries or the stress.
Talk them down on the scale of the job. Maybe you can't rebuild the entire kitchen for that price, but you can install a new floor and cabinets.
Even if it means passing on a job, you don't want to go into a project without the time and resources that you need to do it properly. It's not just your reputation on the line, it's the safety of yourself and your crew, as well.
HMS Insurance Associates, Inc.
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