This article provides an overview of workers’ compensation investigations. According to simplyinsurance.com, workers’ compensation claims pay about $62 billion annually, with about $31.8 billion in cash payments and $31.3 billion in medical benefits. However, some claims were fraudulent and required a workers’ compensation investigation. Workers’ compensation fraud results in $34 billion in annual losses.
What is Workers’ Compensation?
Workers’ compensation programs protect employees who receive physical injuries on the job. Workers’ compensation benefits compensate workers for losses caused by work-related injuries or illnesses. If someone is injured on the job, they may not be able to work for some time and, therefore, can’t earn an income.
The workers’ compensation benefit seeks to provide the injured person with an income when they cannot work or can only work at a reduced rate or capacity. Workers’ compensation is generally a “no-fault” system in which injured workers receive medical care and financial benefits regardless of who is responsible for the job-related accident.
Additionally, the program provides death benefits to the survivors of a worker who died due to injuries on the job.
Workers’ Compensation Investigations: Investigating Fraudulent Claims
Fraudulent insurance claims cost the industry billions of dollars each year. To reduce fraud-related losses, thoroughly investigate all claims. In some cases, they use in-house investigators who are a part of their existing staff. In others, they outsource the job to a local private investigator.
Workers’ compensation fraud occurs when someone intentionally misrepresents information or makes false statements to receive workers’ compensation benefits. The employee, the employer, or a healthcare provider can do this.
Types of workers’ compensation fraud
There are many different types of workers’ compensation fraud, but some of the most common include:
- Exaggerating or faking an injury is the most common type of workers’ compensation fraud. Employees may claim they were injured on the job when they were not, or exaggerate the extent of their injury.
- Claiming an injury that is not work-related: An employee may try to claim that their job caused an injury they sustained outside of work.
- Working while receiving temporary disability benefits: An employee receiving temporary disability benefits is not supposed to work. However, some employees may try to collect benefits while still working for their employer or someone else.
- Misclassifying employees: An employer may misclassify their employees to avoid paying workers’ compensation insurance premiums. For example, an employer may classify an employee as an independent contractor when they are not.
- Billing for services not performed: A healthcare provider may bill for services they did not perform, or for unnecessary services.
The impact of workers’ compensation fraud
Workers’ compensation fraud is a serious problem that significantly impacts the economy. Workers’ compensation fraud is estimated to cost the U.S. economy billions of dollars yearly. This cost is passed on to employers, employees, and taxpayers.
How to prevent workers’ compensation fraud
Several things can be done to prevent workers’ compensation fraud. These include:
- Educating employees about workers’ compensation fraud: Employees should be aware of the signs and know how to report them.
- Implementing strong internal controls: Employers should establish robust controls to prevent fraud. This includes having a clear policy on workers’ compensation fraud and a process for reporting suspected fraud.
- Working with insurance companies: Employers should partner with their insurers to identify and prevent fraud.
- Enforcing the law: Law enforcement agencies should investigate and prosecute workers’ compensation fraud cases.
Surveillance
Private investigators may be hired to obtain proof of fraudulent workers’ compensation claims by surveilling the individual. In this capacity, private investigators may be referred to as workers’ compensation investigators. Types of information collected during surveillance can include videotaping and photographing the subject’s actions and behavior.
Worker’s Compensation Resources
Workers Compensation – Provides workers’ compensation news and information for employees, employers, insurers, and medical providers. Includes a workers’ compensation research center, locating an insurance provider, obtaining information on your state’s program, and finding professional help related to workplace injuries and disabilities in the U.S.
For more information, including the state website and appointed officials, please visit the United States Department of Labor.
The goal is usually to catch someone doing something inconsistent with their injury. Examples include capturing a picture of someone bowling after allegedly sustaining a back injury on the job. Or, catching someone running when they supposedly injured their ankle at work.
If you want to purchase the latest surveillance equipment to conduct workers’ compensation investigations, please see our Spy and Surveillance Equipment section. Various high-tech gear is available to help you watch the subject’s behavior and capture photos or videos of their actions.
Subject and Witness Interviews
In addition to catching the person in the act, an investigator might use other methods to determine whether someone is filing a fraudulent claim. Interviews with the claimant may reveal that the injury occurred without any witnesses. While this alone doesn’t prove a false claim, it can be a key piece of the puzzle.
Additionally, the interview may reveal further information, such as the date and location of the accident or injury. In some cases, investigators determine that the injury occurred while the individual was not at work. Learn more about how detectives interview witnesses.
Background Checks
Workers’ compensation investigators may run a background check related to the case. Such a check may reveal financial difficulties or a history of filing insurance claims. An investigator may speak to previous employers, insurance companies, and others as part of the search process. Learn more about background checks.
Hire a Private Investigator to Help With Your Case
To locate a private investigator in your area specializing in providing surveillance services for workers’ compensation investigation cases, please visit our Private Investigation Directory.
Questions and Comments
If you have any questions about workers’ compensation investigations, please post a comment below.
Sources / References
- SimplyInsurance – How Many Workers’ Comp Claims Happen Per Year?
- Conroy Simberg – Insurance Fraud Costs the U.S. $30 Billion Annually.
- The Investigator’s Guide: How to Contact the President, Vice President, and Members of Congress - November 1, 2025
- The Modern PI’s Toolkit: A Guide to Surveillance Gear and Legal Lines - November 1, 2025
- Why Legal Books are a Private Investigator’s Best Friend ⚖️ - September 1, 2025
If you are injuried:
1. Get medical attention right away. Go to the doctor the very same day of your injury. Do not delay. The sooner you get comprehensive documentation of your injury from your healthcare provider, the better.
2. Notify your employer, the sooner the better.
3. File your claim. Complete your “first report of injury” (FROI) quickly.
These three steps will help you get medical help, get compensation for your injuries, show there is No fraud as far as your case is concerned!
Just like many legal topics, workers’ comp has gotten a bad reputation – The reality is, only a fraction of cases are fraudulent each year. According to a 2014 report from the University of Michigan, about 2% of cases each year are fraud.