Insurance investigation covers a large area, and these investigations are so specialized that some firms do nothing but insurance investigation. Many large insurance companies employ their own investigators, but most firms occasionally contract PI firms who specialize in this work. Smaller firms may contract all their investigations. Many states have annual conferences where PI firms can set up display booths advertising their capabilities, equipment, and personnel.
Businesses Need Investigators
According to the National Insurance Crime Bureau, an organization dedicated to investigating insurance fraud, workers' compensation fraud results in more than $5 billion in losses to the insurance industry each year. Furthermore, according to Columbus, Ohio's Bureau of Workers' Compensation Fraud Division, as of April 2007, 5–15 percent of all cases involve some element of fraud.
Businesses are required by government regulation to carry workers' compensation insurance. This insurance compensates employees who have sustained on-the-job diseases or injuries with partial wage replacement and full payment of medical and rehabilitation expenses. These are delicate investigations. The employer has an obligation to care for any employee whose injuries result from his employment. Because of this, the employer must treat the claimant as a valued employee unless this is proven otherwise. Disabled or injured workers deserve compensation. Yet when suspicion is raised, owners must investigate for the sake of the company's fiscal health. Some have such a serious problem with fraud that they spot check all claimants.
If you specialize in workers' compensation, you work for the insurance company. However, never allow yourself to be pressured into looking for an outcome that favors your client. Remain objective in order to be fair to the claimant as well as the employer. Report the facts, no matter what they are and whom they favor.
Workers' compensation investigations are extremely specialized. The investigator must be familiar with techniques and possess equipment specific to the solving of these cases. The PI must also be familiar with appropriate laws and statutes. For more information, see this site for workers' compensation law by individual state:
Workers who have been injured as a result of something or someone in their workplace deserve compensation and help returning to work. If they cannot return, they deserve a percentage of their salary in order to survive. Unfortunately, there are cases where employees have faked an injury or overstated the extent of an injury. Some workers have had legitimate injuries, but haven't admitted that the injury has healed enough to return to work.
In some cases, a worker is injured away from the job but pretends it happened at work so he can make a claim against his employer's worker's compensation insurance. Many times, this is done because the employee has little or no insurance. Other times, he merely uses this injury as an excuse to stay off of work for a while — and sometimes he decides he likes it, and drags it out. In other, even more egregious cases, workers have been known to stage fraudulent injuries in order to acquire workers' compensation. Some people do this out of laziness, boredom with a job, revenge against a supervisor or employer, or a need for money.
The most extreme false claimant is the one who intentionally injures herself for the purpose of collecting workers' compensation. This is understandably difficult to prove, even when it is suspected by everyone involved, including physicians. Insurance companies don't relish charging someone with such an act, and jurors don't like watching the big business or insurance company accuse the little guy of doing herself harm for money, especially when she appears to be in pain or disabled. Therefore, companies don't often charge the claimant with this. Instead, they use private investigators to keep the person under periodic activity checks or even full-time surveillance. If enough evidence is acquired to show intentional fraud, they'll charge the claimant. Worker's compensation investigations are almost entirely performed by PIs. It can be a lucrative business for the investigator who learns to do this well.
Accepting compensation under false pretenses is stealing. Not only does this behavior take funds that could be spent on people who are really injured or incapacitated, it costs employers the expense of investigators, insurance, surveillance systems, and more — a bad situation for the employer, but an opportunity for the PI to help.
In order to qualify for an on-the-job injury, it isn't necessary that the injury occur inside the workplace or on the employer's premises. When a position requires an employee to spend some or all of his time away from the workplace, workers' compensation insurance coverage applies. However, should the employee stray from a defined route for personal reasons, coverage is nullified.
When workers' comp fraud is suspected, several options are available for determining whether fraud is being committed or not. Some of these options are:
Records check. It's doubtful that a claimant will work where she'll be required to pay taxes, but you might find that she has applied for a loan using her under-the-table workplace or has used that address for some other reason, such as to receive packages.
Activity check. Usually a short surveillance, a day or two, of the claimant's activities. If suspicious behavior is discovered, a longer surveillance is usually authorized. Sometimes activity checks are ordered when claimants attend doctor's visits, and investigators film activity before and after the visit.
Extended surveillance. Usually ordered as a result of something suspicious uncovered during an activity check and used to determine if it's a pattern of behavior or a one-time act.
Hidden camera surveillance. When a claimant has very little outside activity, hidden cameras are an answer and can be set up for filming activity when it occurs; otherwise, an investigator might need to sit for days and even weeks before this person exits the residence.
PIs new to the profession are often appalled at the behavior of some claimants, but they quickly become numb to the infractions they see. For example, Mr. Smith claims to have a back injury so painful he can't lift anything, but he is seen digging up a tree with a large root ball and carrying it on his shoulder to a distant pile of trees that he's already dug up.
Private investigators who specialize in workers' compensation investigations will often be asked to provide photographic or video evidence.
PIs sometimes become impatient to get something on the claimant. They've been known to stoop to such acts as letting the air out of tires or even puncturing a tire to see if the claimant will attempt to change it. This type of thing is beneath the professional and should never be done. To test someone who claims her injuries are so severe that she cannot bend over or bend down, place coins or a cheap billfold by the claimant's car door or mailbox or some area she frequents. If she bends down or bends over to get the bait, the PI is there to film it. This only works once, however. Several uses of this type must be repeated in order to prove that this isn't a onetime activity.
Inexperienced investigators don't realize that the claimant's defense will be that he did indeed bend, was incapacitated by doing so, and couldn't get out of bed for some time after. This is why it's so important to film the claimant for several days to a week after an incident such as this — or any incident when he's caught doing something he claims is impossible for him to do.
While some claims handlers encourage the coin/wallet trick, these types of things aren't always perceived as playing fair with the claimant. Many companies prohibit them, seeing these strategies as tricks that set the claimant up to do something she wouldn't do on her own. This argument alone is reason enough for refraining from this activity, because jurors might be convinced to see the situation in the same way. Therefore, the modern PI must consider all ramifications of an action before he takes it. He must look down the road to the end — the courtroom — and be sure that his techniques will not hinder his case should it go to trial.
An entire book can be written on workers' compensation investigations. In fact, a lot have been, but be careful who you read and emulate, as some investigators cross the line of ethics and propriety. Stay on the side of law and fair play, reporting facts as you find them.