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    All About Forensic Investigation in Insurance

    All About Forensic Investigation in Insurance

    As business insurance policyholders, learning about forensic investigation in insurance can help you utilize your protection through comprehensive insurance policies. You should know what to do or who to turn to if someone ever wrongfully makes a claim against you. A fraudulent case could have grave, irreversible consequences.

    Insurance fraud goes beyond a few thousand dollars lost in claims. Experts reveal that fraudulent insurance claims cost global insurance providers billions of dollars worth of losses annually. To mitigate damage and catch criminals committing insurance fraud, insurers partner with forensics experts who have the resources to assess and determine the legitimacy of each claim.

    The Basics of Forensic Investigation

    Forensic science, otherwise known as criminalistics, deals with investigating and assessing evidence gathered from various criminal and civil cases.

    These procedures allow institutions to verify the legitimacy of several claims, documents, and cases. The investigations can range anywhere from ascertaining the credibility of corporate documents to identifying the decapitated corpse of a murder victim.

    Forensics In An Insurance Fraud Case

    An expert on forensics science can weigh in on insurance claims and expose fraudulent cases wherein the claimant or policyholder:

    • Fabricates documents to create unfair workplace terms and conditions
    • Intentionally damages his/her business establishment to get insurance
    • Falsifies auto shop reports on vehicular accidents
    • Alters medical records and certifications for personal gain
    • Produces false documents to justify non-work-related expenses
    • Overcharges clients through multiple invoices and similar
    • Creates various insurance policies under fake identities

    Business Interruption During An Investigation

    If your upcoming forensics investigation prevents you from carrying out daily operations, consider filing for business interruption insurance claims. The amount should cover a portion, if not all, of your lost profits.

    Although, keep in mind that the actual amount you receive depends on the financial representations explicitly stated on your contract. Some significant factors that would come into play include:

    • Business Income: This refers to the value you declared when you first opened your business insurance policy.
    • Actual Loss Sustained: Report to the investigation team an accurate, transparent breakdown of your losses. Note that exaggerating the sustained damage classifies as fraud and deception.
    • Period of Restoration: In cases of property damage, your insurance policy should cover income loss for the timeframe it takes to rebuild your establishment and resume operations.

    The Two Types of Forensic Investigations

    Forensics science divides into multiple disciplines specializing in different cases. The department that handles auto insurance claims differs from the one that takes on suspected fraudulent personal injury claims. Although, any branch of science under the context of the law or filing litigation classifies as forensics investigation.

    The two most common types of investigations used to dispute fraud insurance claims include:

    Forensic Accounting

    Forensic accounting consists of analyzing data involved with financial insurance claims, often either criminal or civil in nature. Attorneys can use these forensics reports in combination with expert testimony accounts for various incidents, including embezzlement, insider fraud, and tax evasion, among other financial cases.

    Cyber Forensics

    With cyberattacks occurring almost every 39 seconds, entities that store sensitive personal identifiable information (PII) in their database would do well to get cyber insurance. Unfortunately, hackers can attack your database and take over your insurance policy. Apart from compromising your clients' information, they can also attempt to make false insurance claims on your behalf.

    If you feel that cybercriminals compromised your database, request a cyber forensics investigation. Experts will use extensive tools and resources to assess your cyber insurance policy and identify the attacker involved—or at least get a good idea of where the attack originated. Although, fraudulent insurance claims made on fake grounds might not even push through in the first place.

    Other Types of Forensic Investigations

    • Crime Scene Forensics: These play a crucial role in criminal and personal injury cases, such as reckless imprudence resulting in homicide. An expert in criminalistics often works with crime scene investigators and law enforcement officers.
    • Forensic Dentistry: Forensic odontologists can verify the identity of disfigured, burnt human corpses.
    • Forensic Entomology: The discipline primarily involves studying the insects related to specific cases.
    • Forensic Archaeology: Forensic archaeologists can help identify decomposed human corpses.
    • Forensic Pathology: Pathologists confirm the corpse's cause of death through complete autopsies.
    • Forensic Graphology: Graphologists play a crucial role in decoding ransom notes, death threats, and suicide letters.
    • Forensic Psychology: These experts try to gather crucial information by understanding the attacker's or suspect's motives.

    Assured Standard explains that any business with more than one employee should carry workers' compensation insurance. Check out our complete guide on what this policy does and how your company would benefit from it—especially in situations where a forensic investigation is needed.

    Frequently Asked Questions

    What are examples of forensic evidence?

    After a crime is committed, investigators must then sift through the evidence to find out what happened. Hair and fibers can be analyzed for DNA; guns are examined forensically to see if they were used in the commission of a crime or not.

    All these pieces of physical evidence help build an image as well as make connections with those who may have been at the scene when it took place—investigators may even take soil samples from outside windows where someone has tried breaking in.

    How long does it take for forensic evidence to come back?

    DNA testing is a very meticulous process: it can take anywhere from two weeks to months depending on the type of evidence found.

    How does a forensic accountant find hidden assets?

    Forensic accountants uncover hidden assets by examining a variety of documents, such as tax returns and bank records. Loan applications may also provide valuable clues to the wealth of an individual.

    How do insurance providers investigate a claim?

    Insurance companies rely on evidence, interviews, and records to conclude whether a claim is legitimate or illegitimate. Fraudulent claims raise the price of insurance for everyone involved, so it's in their best interest to verify that every claim is legitimate and accurate.

    Can a person be charged without evidence?

    You cannot be charged and eventually convicted if there isn't any proof against you. If you are charged, then most likely your arrest would result in probable cause or physical pieces of evidence that point towards you which led them to do so.

    Fraud investigations protect not just the insurance company paying for a specific claim but, instead, all parties involved. Fraudulent claims could cost you thousands in losses. Fortunately, the Department of Financial Services has a hotline open to anyone who wants to report a fraudulent case. The offending party can either be making a case against you, your company, or someone you know.

    However, keep in mind that one cannot discriminate against individuals they suspect of making a fraudulent insurance claim. Until the forensics team comes back with findings, you need to cooperate accordingly. Otherwise, the claimant can file a complaint or counter-complaint against you, which would have varying repercussions depending on your relationship with each other (e.g., coworkers)

    Assured Standard helps business owners figure out the best insurance for their needs Check out our resources page for more information on insurance protection for businesses.

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