An insurance provider is calling for more to be done to prevent and deter fraudulent insurance claims at work. This comes after a report was published showing the majority of SMEs (84%) believe there is a compensation culture.

According to the new research carried out by AXA UK, 24% of small and medium businesses have had a claim made against their employer’s liability insurance in the past five years and 77% believe Claims Management Companies (CMCs) are the main reason for this increasing trend.

David Williams, Managing Director of Underwriting at AXA, said: “There is no doubt and no question that those who are genuinely injured in the workplace should receive fair compensation. However, at a time when the number of workplace accidents is falling and the number of claims continues to rise, there is clearly something of an imbalance in the system.

“It is clear from this research that workplace injuries remain a major issue for SMEs – the lifeblood of the British economy. The cost of fraudulent workplace claims is bringing about the inevitable consequence of higher employers’ liability premiums.”

Tougher investigations into compensation claims needed

Another statistic from this report showed 79% of SME owners support a stronger stance and want to see tougher medical examinations brought in to crack down on fraudulent workplace injury claims.

Mr Williams added: “Small business owners have serious concerns and would like to see the Government go even further with its reforms. There is a case to be made for introducing more vigorous medical examination standards around workplace injury claims in order to combat the growing compensation culture along with an overhaul of the dispute resolution track.

“In any case, our research shows that as the prevalence of claims increases, it poses a higher risk to the stability of SMEs and companies need to make sure that they are adequately protected against them.”

Proposals for improvements

Besides pushing for more thorough medical assessments for workspace injuries, AXA has made a number of other proposals for reforms to control how CMCs operate, regulate the marketing activities of referral agencies (particularly cold-calling methods) and promote the important role of insurers in assessing risk management.

What do you make of these proposals? Are you concerned about a compensation culture in the workplace?  Tweet us @theinsuranceoct