Don’t Get Burned by Late Reporting

May 1, 2009

By Nate Oland, National Account Executive, Federated Insurance Companies

I recently had a contractor share a horror story with me about a former employee who’s collecting workers compensation benefits for an injury the business owner doubts actually happened on the job. To complicate matters, the investigation revealed that the injured employee hadn’t notified the employer of the injury until almost two weeks after the alleged incident. Even with a very thorough claims investigation, it was impossible to prove that the injury had not occurred during the course of the claimant’s employment. Therefore, there were no grounds to defend the employer in this case and the benefits were paid.

Unfortunately, this isn’t the first time I’ve heard a story like this. Does it sound familiar to you? If you ever receive a late notice of a work-related injury, then you have the potential for a major workers compensation claims problem on your hands.

Effects on Your Bottom Line
Every year, late reporting of on-the-job injuries costs employers and insurers millions of dollars. In fact, Federated estimates that even legitimate work comp injuries reported more than seven days after the incident occurred increased medical costs and wages by more than 50%—compared to claims reported within 24 hours. Prompt claims reporting can definitely make a difference on your workers compensation bottom line!

Communicate an Injury-Reporting Policy
To help protect your business from false work comp claims, consider the following injury-reporting policy implemented by Chip Greene, PHCC member and owner of Greene & Associates in Macon, Georgia:
 Employees are informed that any work-related injuries should be reported immediately or within 24 hours.
 Each employee’s weekly time card includes a statement at the bottom that must be signed by both the employee and supervisor as to whether he or she had an injury or witnessed another employee being injured that week.

According to Greene, “We do this to bring attention to the importance of promptly reporting any injury. In the past, we had claims where an employee alleged that a newly reported injury aggravated a prior unreported injury. If an employee signs a statement saying that he or she has not had nor seen an accident during a given pay period, then it is difficult for the employee to have any basis for a prior unreported injury being part of any claim.”

In an industry full of best practices, Greene has taken a proactive, common sense approach to risk management by clearly communicating his policy on prompt reporting of work comp injuries. As a result, he has made his employees accountable and reduced his workers compensation experience modification factor in the process.

This article is intended to provide general recommendations regarding risk prevention. It is not intended to be legal advice or to include all steps or processes necessary to adequately protect you, your business or your customers. Please consult your personal attorney and insurance professional for advice unique to you and your business. © 2009 Federated Mutual Insurance Company. All rights reserved.

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