When it comes to workers’ compensation insurance, employees aren’t the only ones guilty of abusing the system. States require employers to carry workers’ compensation insurance. Because this insurance adds to a company’s overhead, some employers try to avoid paying their full premium through misreporting and insurance fraud.
Because workers’ compensation insurance premiums are calculated as a percentage of a company’s total payroll, some companies claim to pay less annual payroll than they actually do. Other companies misclassify their employees.
Since an office worker is at lower risk of on-the-job injuries than a construction worker, the insurance premiums for office workers are much lower. In order to pay lower insurance premiums, a company may falsely classify a high-risk employee, like a construction worker, as a low risk employee, like an office worker.
However a company evades their workers’ compensation insurance premium, they’re committing fraud. And you, as the insurer, will still pay full benefits if their employees are injured. A Kelley Alliance investigation can help verify that the companies you insure are paying the correct premium so that when claims come in, you won’t be caught with too little in the bank.
We surveil the company, and ensure that the number and type of employees they report is correct. Additionally, we can comb through labor commitment documents, like contract bids and RFPs to match up the claimed employee level with the reported numbers to the carrier. With a Kelley Alliance investigation, you can properly audit a company’s premium payments and realign their coverage and labor dollars to their policy.