It appears as though insurance fraud is a growing problem in this country and unfortunately, few business owners are aware of the extent to which it affects their bottom line. There are numerous ways in which businesses are affected and so it pays to be aware of what to look for and what you can do to protect yourself and your company from the losses which can occur.
Insurance Fraud You May Never Suspect
The first thing to understand is that insurance fraud can be perpetrated from a number of directions. Most often we think of a fraudulent claim against a policy but there are actually times when the fraud originates with the insurer. Sometimes coverage is non-existent and the insurer continues collecting premiums even knowing there will be nothing to pay on them because they don’t carry that particular coverage. Other times they issue checks that suddenly go missing or they discriminate in their coverage. These are the times when certified insurance fraud services come in handy because they are expert at finding discrepancies in order to present them in a court of law. It’s hard to fight the insurance company unless you are a fraud investigator. For the average business or consumer, that would be their only recourse.
What Insurance Fraud Costs Your Company
Although most businesses know that the cost of their policies continue to rise as increasing numbers of claims are filed, they don’t realize the actual cost in terms of profits they make. Take for example a retail store that is the object of fraudulent claims over a period of time. As their insurance premiums continue to rise, the only way to recoup that money is to increase their prices. With higher prices consumers begin looking elsewhere to do their shopping so that now the loss is compounded. The retailer is paying higher fees for their insurance and losing business in the process because they had to raise their retail prices.
The Bottom Line
Insurance companies necessarily need to raise prices as do businesses and each passes those costs down a level below them. The insurance company looks to recover some of their loss by charging more and businesses, in turn, charge more to their clientele. People begin paying more for products or services and eventually begin shopping elsewhere. It’s a continuous cycle that keeps perpetuating as more fraudulent insurance claims are submitted and somehow bypass the notice of the insurer’s fraud prevention team.
In the end, every fraudulent insurance claim or transaction ends up affecting your business growth. It may not be immediate but it is guaranteed that fraud will create a rise in prices that are eventually passed down to consumers. There are times when expenses become so high that businesses even close their doors for good. In order to ensure that your business sees the growth it should, more effort needs to be made on fraud prevention and detection. If you suspect that there is a problem with insurance fraud that is directly affecting your bottom line, seek professional help immediately. Don’t wait until the losses become extreme. Your survival as a business could depend on early detection of fraud.