What you need to know about fraud with Workers’ Compensation Insurance
Most businesses in California are required by law to have workers’ compensation. Despite this mandate, some businesses try to avoid paying for the proper coverage. There are three basic types of workers’ comp fraud.
Three Basics of Workers’ Compensation Fraud
Some businesses commit fraud by improperly classifying their workers. Just because an individual provides a service for your business, does not mean he or she is an employee. Independent contractors are one instance of this – people under this title do not have to be provided insurance. Before you label a worker as such, however, it is vital you ensure the term correctly describes his or her relationship with your business.
Another way a business might attempt to minimize the cost of workers’ comp premiums is deducting the amount from their staff members’ paychecks. This is illegal in the state of California. Doing so can get you fined, and even open the way for a legal suit by your employees.
Other businesses simply fail to obtain coverage altogether, which could result in serious financial burden. Should an accident occur on the premises and it is discovered that you do not have the proper insurance; your business could be held responsible for paying medical benefits and lost wages to the affected worker. The labor board may even close your business until the right insurance is obtained.
Do not risk the financial future of your business. Contact our agency today to ensure you are adequately insured.