Fraud in workers’ compensation is no longer rare — it’s everywhere. Every insurance company, insurance agency, claims adjuster, broker, or construction industry employer is now a potential target. And without proper anti-fraud training, even experienced professionals can accidentally approve a fake certificate of insurance or a false workers’ compensation claim.

That mistake could lead to huge fines, a Stop-Work Order, or even a civil enforcement action from the Division of Labor Standards Enforcement or California Department of Insurance. In some cases, business owners have even been arrested for rejection of coverage, manual premium manipulation, or hiding employees as independent contractors to avoid Workers’ Compensation Coverage.

Fraudsters know the loopholes. Insurance professionals must know them better.

Workers’ Compensation Compliance Is Not Optional

Under Workers’ Compensation laws like the California Labor Code and California Insurance Code, every employer must carry active workers’ compensation insurance. This includes temporary workers, independent contractors, and even employees hired through staffing agencies.

If a company fails to maintain coverage, the Division of Workers’ Compensation, Employer Compliance Bureau, or Department of Industrial Relations can issue a Stop Order — also known as a Stop-Work Order. In Orange County, comp enforcement agencies are aggressively shutting down uninsured roofing companies and misclassified labor contractors.

Fraud Investigation Teams Can’t Catch Everything

Most people think fraud investigation teams or Special Investigation Units (SIUs) will handle fraud for them. But by the time SIUs get involved, the damage is already done — claims have been paid, fake medical treatment bills submitted, and disability benefits approved.

Anti-fraud training helps frontline professionals recognize fraud early by teaching:

• How special investigation units fight insurance fraud

• How to detect forged claims forms or insurance policies

• How to verify a real Medical Provider Network or Qualified Medical Evaluator

• How to confirm coverage through the Workers’ Compensation Insurance Rating Bureau of California, State Compensation Insurance Fund, or Office of Self-Insurance Plans

The Claims Process Is Where Fraud Lives

Most scams begin during the claims process when an injured employee or employer submits a claim form. Without proper training, a claims handler may approve medical care that never happened or fail to verify whether the employee’s insurance requirements were met.

Red flags include:

• Injury reports filed without medical attention from a licensed medical service provider

• Employers switching class codes to lower their manual premium

• Employers operating without business registration, hoping to skip reporting to the Division of Industrial Relations

• Companies claiming Self-Insurance Plans without proof

Every injured worker deserves fair treatment — but every fraudulent claim hurts real injured workers by draining the system.

Comp Enforcement in Orange County

Comp enforcement in Orange County has become one of the strongest in the nation. Local investigators now work with the Fraud and Noncompliance Unit and even the Missouri Attorney General and New Mexico Workers’ Compensation Act officials to track multi-state offenders.

In one case, inspectors found that a construction contractor used a fake certificate of insurance from another company to avoid coverage. The Employer Compliance Bureau Chief issued a civil enforcement action within days.

How CheckMyCert.org Fraud Reports Help Prevent Penalties

One of the easiest ways to stop fraud is to verify Workers’ Compensation insurance policies before accepting them. A CheckMyCert.org fraud report allows businesses to upload any insurance policy or certificate of insurance for verification — privately and confidentially.

No salesperson. No exposure. Just fraud prevention made simple.

Fraud Is Moving Fast

Whether you're in California, Missouri, New Mexico, or beyond — labor laws are tightening. The California Department of Industrial Relations Division of Labor Standards Enforcement now shares data with the California Department of Insurance, Medical Unit, and Schedule for Rating Permanent Disabilities boards.

If you’re in the insurance industry, anti-fraud training is not optional — it’s survival.