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£1.3bn of fraudulent claims were made in 2013. So how can schools prevent and detect hoaxes? Zurich Municipal offer their expert advice
According to the Association of British Insurers (ABI), insurance fraud equated to £1.3bn in 2013 – an 18% increase in value on the previous year. The problem is critical, and schools should be wary.
Kat Scott, intelligence team leader for the claims investigation unit at Zurich Municipal, however, thinks that the industry is now tackling the problem head on, with their capability to detect and prosecute fraud much improved from a few years ago.
“Since the Insurance Fraud Enforcement Department (IFED) was launched in January 2012, they’ve sent out a clear message that insurance fraud will not be tolerated,” she says.
Prior to the creation of IFED, it was really difficult for insurers to get local police forces to take on matters of insurance fraud as it was often seen as a lower priority and considered a victimless crime. “A good example of that is the different outcomes of two similar bogus claims we handled.
“Both instances took place in colleges. The older case involved a pupil manufacturing a fall and the latter case involved an employee who again manufactured a fall where a floor was being cleaned. The difference is that the first case was prior to 2012 and did not end in a prosecution, whereas the second, with the intervention of IFED during their day of action, did.”
Nonetheless, with the ABI reporting that nearly 2,000 false insurance claims were uncovered every week in 2013, schools need to be on their guard. Here are Kat’s top five tips for preventing, detecting and reporting and insurance fraud:
“Insurance fraud can be committed in all areas of work, education included,” says Kat. “Types of fraud likely to affect schools include fictitious or exaggerated liability claims, such as slips and trips made by students and staff alike. However, they should also have regard to motor insurance fraud, known as ‘crash for cash’ in the industry.”
“Crash for cash” is where individual fraudsters – and sometimes gangs – target insured vehicles and deliberately cause an accident to claim injury.
“Schools with vehicles, such as buses, should be aware of this because it could affect them too,” says Kat. “Generally the industry is seeing an increase in organised fraud going on in schools in slip/trip type claims.”
These instances involve a professional enabler, such as an accident management company, providing claimants with details of where there is damage to a pavement or a raised flagstone which could be a trip hazard. These claims can be either entirely fictitious or exaggerated.
Keep up to date with new types of fraud that could affect your school by reading the latest news and reports on websites run by IFED, ABI as well as the Insurance Fraud Bureau and the Insurance Fraud Investigators Group website.
When it comes to insurance fraud, prevention is better than cure.
“Make sure your school grounds are well kept and that inspections are frequent,” says Kat. “Fraudsters can’t exploit defects if there aren’t any in the first place.”
Health and safety and ground inspections should be documented accurately.
“The more detail you can provide your insurer with the better,” says Kat. “Capturing data at the earliest possible opportunity is vital in determining whether a claim is fake or genuine. One of the best ways of doing is this is having CCTV on site – but you also need ensure it’s being monitored and that it’s functioning.”
Keep records of who is in school at all times. These should include pupils, members of staff and contractors. Remember to document any exceptional circumstances such as building works, events and trips off-site too. “Preserving information is key,” says Kat.
If an accident does happen in your school, the best way to help your insurer deal with a potentially fraudulent claim is by having a robust reporting mechanism.
“Schools need this so that information is preserved,” says Kat. Details – such as where the accident occurred, why, who was involved and who may have witnessed it – all need to be documented. Most of all, members of staff should be trained to know what details to look for and what to ask witnesses and those involved.
“The report process needs to be easy to follow and consistent,” continues Kat. “Whoever fills it out needs to be asking the same questions and writing down the same sort of facts as anyone else reporting such a situation in their school.”
“Observing how someone involved in an accident reacts to what has happened can sometimes raise suspicions,” says Kat. “In the industry, these are called ‘red flags’. Although these aren’t necessarily objective indicators of fraud, they should be kept in mind nonetheless.”
Such suspicions could include instances where the injury does not appear to be consistent with how the injured person is acting, or if witness statements contradict their account.
“Gut instincts can sometimes be revealing,” says Kat. “For example, in the previously mentioned case where a pupil fraudulently claimed injury, the teacher who reported the incident wasn’t convinced that how the pupil acted reflected the type of injury they said they’d sustained. If something doesn’t feel right, let your insurer know as soon as possible.”
Schools run by local authorities, private schools, academies and further education colleges will all have different insurance policies, some of which will be held directly and some indirectly. Regardless, when a potentially bogus accident occurs, the best thing to do is involve your insurer immediately.
“Schools need to collaborate with their insurer when they think something’s not right,” says Kat. “Of course, they also need to have a good fraud handling policy setup in advance, but letting their insurer have easy access to all the information they need is paramount.”
Ultimately, deciding whether or not a claim is genuine is not the school’s responsibility. However, institutions covered by Zurich Municipal can be confident that when they do have concerns, they will be taken seriously.
“We have an extensive team of professionals dedicated to uncovering fraud,” says Kat. “We also conduct intelligence research to make sure the claims we receive are truthful and valid. Since the launch of IFED, we’ve successfully referred nearly 60 fraudulent claims worth approximately £2.4m. We won’t tolerate fraudsters and schools shouldn’t have to either.”
For more information or guidance on any of the issues raised please contact Zurich Municipal at email@example.com or visit zurichmunicipal.co.uk.
You can read more newsworthy articles around other key topics within the education sector at :
• Zurich Muncipal’s News & Views webpage: newsandviews.zurich.co.uk
• Zurich Municipal’s education partner zone on the Guardian website: theguardian.com/teacher-network/partner-zone-zurich