The Purpose of Insurance Fraud Investigation: Protect Your Insurance Company from Fraud

According to the Insurance information Institute Insurance Fraud Background, the estimated average cost of insurance fraud, with the exclusion of health insurance, against insurance companies totals at a loss of $40 billion dollars per year. Unfortunately, people have gotten away with committing Insurance fraud crimes. The Property Casualty Insurers Association of America Insurance Fraud Statistics reports at least 10% of payouts made by insurers are based on fraudulent claims. For this reason, companies must understand how Insurance Fraud Investigation can arm them with an expertise that will reduce liabilities such as falls/slips, over lifting limits, proper machine guarding, and other safety hazards that affect the workplace. Investigators present a technical and tactical approach to the company, so that hazard avoidance and sustaining safety standards are the number 1 priority. To help companies with this critical effort, FPIS provides the following tips on understanding the purpose of Insurance Fraud Investigators:

1. Awareness
   1. Investigators will educate the company on making the workplace visual. For Example, in a weld cell, there must be the proper spacing from the Hot Area (where welding occurs). Therefore, trashcans and parts racks must have a specific home away from the Hot Area to avoid fire from the weld sparks
   2. Investigators will educate the company on ensuring the workspaces have proper aisleway clearances identified, so that operators can move freely to avoid tripping hazards and forklift accidents
2. Safety
   1. Investigators will educate the company on Occupational Safety and Health Acts (OSHA) standards for their specific industry. Document management/controls, ergonomic improvements, and safety stand-downs (hazard findings) are some proactive examples that ensure the company is compliant.
3. Evidence
   1. Investigators will investigate the affected area of loss to understand why the accident occurred, how it happened, and determine the root cause. Then, provide recommendations for countermeasures to solve the problem. Things like add more lighting, camera coverage, insert guarding, improve signage, aisle markings, forklift blue light technology, etc.
   2. Investigators will provide the company with technical reporting that covers the findings and recommendations. This will serve as a historical record that shares the company’s safety (before/after) journey

Insurance Fraud Investigators purpose is to empower Insurance companies to see hazards before they occur and work to remove or reduce them. Investigators will also help their customers find root causes to accidents after they have occurred by providing solutions to prevent any recurrence. As a result, this will eliminate and or reduce the liability that negatively affects Insurance company’s bottom line. For more information, reach out to FPIS to learn how we can partner with you in your investigations, www.fpisinv.com

References:
1] Fortunly, Insurance Fraud. “The Fraudster Next Door: 30 Insurance Fraud Statistics”. I. Mitic Website, September 30, 2020. Insurance Fraud Statistics
2] Insurance Information Institute, “Background on Insurance Fraud”. III.Org Website, 2021. Insurance Fraud Background