During a quick day trip down to San Diego last weekend, I caught this billboard from the San Diego County District Attorney which kind of took me by surprise. Picturing a handcuffed jail inmate it reads “Commit Workers’ Comp Fraud, Get A New Outfit.” In addition, “don’t do it, don’t tolerate it, report it” with a phone number to call right there. As a commercial insurance professional who sees’s businesses affected by this often, it was kind of refreshing to see actually. Here’s the sign:
Taken straight from the California Department of Insurance:
In California, workers’ compensation insurance is a no-fault system. Injured employees need not prove an injury was someone else’s fault in order to receive workers’ compensation benefits for an on-the-job injury. In addition to medical expenses being covered for injured employees, some injured workers are entitled to recover a portion of lost wages resulting from an injury. Fraudulent workers’ compensation claims can be an enticing target for criminals.
Workers’ compensation insurance fraud occurs in simple and complex schemes that often require difficult and lengthy investigations. Employees may exaggerate or even fabricate injuries. At the other end of the spectrum, white-collar criminals, including doctors and lawyers, entice, pay, and conspire with others to defraud the system by creating false or exaggerated claims, overtreating, and over prescribing harmful and addictive drugs. Insurance companies “pick up the tab,” passing the cost onto policyholders, taxpayers, and the general public.
The Workers’ Compensation Fraud Program was established in 1991. The legislature made workers’ compensation fraud a felony, required insurers to report suspected fraud, and established a mechanism for funding enforcement and prosecution activities. The legislation established the Fraud Assessment Commission to determine the level of assessments to fund investigation and prosecution of workers’ compensation insurance fraud.
Funding for the program comes from California employers who are legally required to be insured or self-insured. The total aggregate assessment for the fiscal year 2015-16 was $58,862,000.
During the fiscal year 2015-16, the Fraud Division identified and reported 5,380 suspected fraud cases; (SFCs) assigned 502 new cases, made 249 arrests and referred 167 cases to prosecuting authorities. Potential loss amounted to $193,354,616.
California joins Delaware, Massachusetts, Oregon, and several cities (including San Francisco) in passing laws preventing employers from asking prospective workers for their salary history. If asked, companies must also provide a pay range for the job in question. The new law, which comes into effect January 1, aims to curb the gender pay gap by keeping low salaries from following women through their careers.
Saw this sign driving around L.A. yesterday. Employers beware. Your employees are exposed to this type of marketing from attorneys. First and foremost, treat your employees with the respect they deserve. Build a strong culture of trust and put your employees first. However, what if you do your best but still get a bad seed filing a groundless wrongful termination or discrimination claim against you? Do you have the money and resources to defend it?
They say nationally, the cost of settling an Employment Practices Liability #EPL claim out of court averages $75,000, and the average jury award hits $217,000 if you go to court and lose. In CA, I’m sure it’s higher. Are you prepared? #EmploymentPracticesLiability
A client of mine, a commercial building owner, suffered a fire on Saturday afternoon at their commercial industrial property in Gardena, CA.
Here are some pictures of the scene:
We reported and initiated the claim right away over the weekend with the carrier. Thanks to technology, we were able to get it done remotely while I was out of town.
A growing number of cyber criminals are targeting factories for ransom, knowing that the industry’s time-sensitive nature puts pressure on companies to pay up. “if we don’t make our product in time, that means Toyota doesn’t make their product in time, which means they don’t have a car to sell on the lot that next day. It’s that tight,” says John Peterson, AW North Carolina’s IT manager. The factory was hit with malware last year, with the potential to lose $270,000 in revenue, plus employee wages, for every hour it was out of commission.
Manufacturers: do you carry Cyber Liability / Data Breach insurance? Cyber extortion coverage protects your business against losses caused by ransomware and other types of cyber extortion. Many cyber liability policies cover three types of costs.
Non-insurance related, do you know how Orange County gets its water? This whiteboard video explains how/ from where
…And commercial auto insurance rates are spiking hard as a result. Carriers are backing down on coverage and most are putting some serious restrictions on their appetites.
See Property Casualty Insurers Association of America’s (PCI) 7 summer driving safety tips:
Also, see more from Hanover on why auto insurance rates are rising so dramatically: