At MartinoWest Business & Insurance Solutions, we understand how devastating workers’ compensation fraud can be – not just financially, but operationally and culturally. When a system that’s meant to protect your employees is misused, everyone pays the price: your business, your workers, and even the state economy.

In California alone, workers’ comp fraud is estimated to cost up to $3 billion a year. And if you’re in a high-risk, blue-collar industry like construction, logistics, or manufacturing, you already know how quickly one bad claim can spiral into ongoing litigation, rising Experience Mod scores, and an insurance carrier that treats you like the problem instead of the victim.

The good news? You’re not stuck with a broken system. But first, let’s look at what workers’ comp fraud really looks like – and how you can fight it without turning your business into a police state.

What Is Workers’ Comp Fraud?

Workers’ compensation fraud occurs when an employee knowingly lies, misleads, or exaggerates the facts of an injury or illness in order to receive benefits they’re not entitled to. While most workers are honest, data suggests up to 20% of claims may involve fraud or misrepresentation.

And it’s not always easy to spot.

The Four Faces of Workers’ Comp Fraud

Workers’ compensation fraud costs California businesses millions each year, but it doesn’t always look like what you’d expect. Instead of obvious scams, most fraud happens through seemingly legitimate claims with hidden deceptions. Here’s how to recognize the warning signs:

1. The “Amplifier”

This employee has a real injury but treats it like a broken bone when it’s actually a bruise. Think of the worker who genuinely strains their shoulder lifting a box, but suddenly needs months off work and claims they can barely move their arm. The injury is real… the severity isn’t.

 Red Flag:    Medical treatment doesn’t match the reported limitations, or recovery takes much longer than expected for the type of injury.

2. The “Relocator”

Weekend warrior injuries that magically become workplace accidents. Picture an employee who tweaks their knee playing basketball Saturday night, then Monday morning reports “slipping in the parking lot.” They’re injured, but they’re shifting the financial responsibility from their personal insurance to your workers’ comp policy.

 Red Flag:    Injury reports that come in Monday morning with vague details about when/how it happened, especially after weekends or holidays.

3. The “Actor”

This is the employee who deserves an Oscar for their performance. They create elaborate stories about injuries that never happened, complete with dramatic symptoms and detailed accounts of workplace accidents that nobody witnessed.

 Red Flag:    Injury reports with overly detailed stories, no witnesses, and symptoms that seem inconsistent during surveillance or medical exams.

4. The “Double Dipper”

Some employees find creative ways to turn a single injury into double income. They’ll claim they’re too hurt to return to their regular job, collecting disability checks in the process – all while secretly working under the table for another employer.

The Real Cost Beyond Money

These schemes don’t just inflate your premiums, they create a culture of suspicion that affects honest employees and can damage team morale. Plus, investigating and fighting fraudulent claims takes time away from running your business.

For each fraudulent or exaggerated claim, employers can face:

• Higher premiums and Experience Mod increases
• Legal fees and drawn-out litigation
• Lost productivity and staffing shortages
• Tarnished culture and employee morale

And once attorneys get involved, the cost of a claim can double or triple – even if the original injury was minor.

Your Best Defense: Fighting Smart, Not Hard

Traditional solutions like tighter return-to-work programs, medical evaluations, and claim reviews are essential – but they can only go so far when the system itself is vulnerable to exploitation.

Create a workplace culture where legitimate injuries are handled fairly and promptly. This reduces the temptation for employees to exaggerate or deceive. Document everything, maintain open communication with injured employees, and work with experienced insurance partners who know how to spot red flags early.

But most importantly, don’t get stuck playing defense with a broken system.

How MartinoWest Helps You Take Control

We know you can’t solve fraud by turning your workplace into a police state. That’s why MartinoWest has partnered with best-in-class providers to deliver a smarter workers’ comp solution built specifically for California employers.

This isn’t just another insurance policy. It’s a compliance-driven model built around California-specific legal allowances that reduce unnecessary attorney involvement – and help employers resolve claims faster, cleaner, and at a lower cost.

Here’s what you get:

• Up to 30% lower total claim costs
• Minimized legal friction
• Stronger compliance through allowable attorney limitations
• Faster return-to-work timelines
• Streamlined claims management with full transparency
• Support for both employer and injured worker—without turning it into a battle

This approach is designed for employers with high-frequency or high-cost claim histories who are ready to break the cycle.

Built for Businesses That Can’t Afford to Get Burned Again

We work with companies that:

• Are tired of watching their Mod spiral out of control
• Have experienced repeated fraud, exaggeration, or legal escalation
• Want real-world solutions that keep them compliant and cost-effective

If that sounds like your business, you’re not alone. And you’re not out of options.

The truth is, most workers are honest people who deserve fair treatment when they’re genuinely hurt. But the small percentage who abuse the system shouldn’t be allowed to drain resources from everyone else, including the employees who play by the rules.

Ready to Break the Cycle?

This one call could reduce your claims spend by 30%.

We’ll show you how the solution works, help you estimate your potential savings, and walk you through how to regain control of your workers’ comp program – once and for all.

MartinoWest Business & Insurance Solutions
Helping California employers protect their people, and their profits.