Slip-and-fall fraudsters milk businesses for insurance payouts

Stephanie Taylor Christensen

According to the National Safety Council, slips-and-fall accidents are the third leading cause of injury to customers and employees every year. They cost American businesses $70 billion annually, in the form of workers' compensation and insurance claims. While most accidents are just that, there are some fraudsters who actually make a "living" from claiming false injuries took place at a business and then suing for damages and compensation.

Slip-and-fall scams usually involve two people, according to the Coalition Against Insurance Fraud. A typical scheme is executed with one person walking down a vacant aisle in a store and pouring liquid on the floor. Then, he or she will pretend to fall. The partner then will run to "help" and act as a witness to the accident. Another common scheme in a grocery store, restaurant or bar is to throw a few grapes, napkins or slippery foods onto the floor. When no one is looking, the fraudster will feign a fall that results in injury. Slip-and-fall fraudsters often hit several retailers in a targeted geographic location and then disappear quickly after receiving claims payouts, according to the National Insurance Crime Bureau NICB).

Unfortunately, slip-and-fall fraud is on the rise. The NICB analyzed these so-called "accident" claims and found a 57 percent increase in the number of referrals from member companies from 2008 through the first half of 2010. These schemes can cost businesses big, especially mom-and-pop shops. The average liability award for injury to a customer or other third party runs from $60,000 to $100,000 per claim, according to the National Floor Safety Institute. Areas with the most questionable claims for slip-and-fall accidents are New York, Los Angeles, Philadelphia, Las Vegas and Chicago, according to the NICB.

While businesses cannot prevent fraud, they can protect themselves by ensuring all necessary insurance coverage is in place. This includes carrying adequate business liability insurance that covers slip-and-fall accidents for customers and employees, workers' compensation coverage, and a business umbrella policy for additional coverage in the event that a liability claim exceeds the standard coverage.

Business can also reduce their appeal to fraudsters. Nationwide Insurance recommends conducting a daily safety routine, immediately fixing any potential hazards like ripped carpets, uneven floors, faulty railings and lighting issues. Take care of all outdoor areas daily, and outsource snow and ice removal if needed. Train employees on slip-and-fall protocol, and carefully document all ongoing safety inspections and maintenance.

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