According to the Insurance Information Institute, property andcasualty insurance fraud now cost insurers an estimated $30 billionannually. Of this, workers' compensation fraud accounts forapproximately 25 percent or $7.2 billion a year, according to theNational Insurance Crime Bureau (NICB). The problem is only gettingworse. The NICB recently called workers' compensation fraud the"fastest growing segment of insurance fraud" in the nation. TheInsurance Research Council attributes the current fraud trendincreases to:

? Sustained and growing economic pressures

? Weakening of society values

? Highly litigious environment

? High unemployment and job loss

? Lack of enforcement

? Limited deterrents

? Inadequate staffing within the insurance community

Adding to the problem is the fact that proving workers'compensation claimant fraud in civil and criminal arenas is one ofthe toughest challenges within the claims community. This taskcannot be undertaken lightly; there are legal and ethical potholesthat must be avoided to ensure a positive outcome.

To identify and build the proper foundation of any fraud case,there must be a methodical system of fraud detection routinely andsystematically employed throughout the life of the claim. Defenseattorneys and claim professionals can utilize a variety of tools tobest assist in the identification and documentation of suspiciousclaim activities. One of the most widely available and universallyaccepted fraud detection tactics is surveillance.

Surveillance, as used within the claims community, is defined asthe unbiased and ethical documentation of an individual'sactivities. Given the fluid nature of any investigation andsurveillance, it is crucial that investigators clearly understandthe laws that govern and impact their profession. To make certainthat the surveillance evidence is accepted in legal proceedings, itis imperative that all ethical and legal requirements are metduring the execution of surveillance efforts.

It is essential that the surveillance be conducted in areasonable and unobtrusive manner. If the investigator iscompromised, the surveillance should be terminated and re-scheduledfor another time. To continue the surveillance after theinvestigator has been caught by the claimant will negatively impactthe claim.

During a surveillance operation, claimants are extended the samelegal protections as all other individuals. There is no loss of anylegal privilege simply because the claimant is under a civilinvestigation due to a questionable work-related injury.

However, if a person is in a public place, there is noexpectation of privacy. A claimant's activities may be videotapedunder these circumstances. In addition, if a person's activitiesare being conducted in a private area but can be readily viewedfrom a public location, that individual's expectation of privacy istremendously reduced, if not eliminated. Common scenarios rangefrom a claimant working on private property that is readily viewedfrom a public street, park or similar location. Even though theclaimant is located on private property, the activities can stillbe documented if the investigator is located on public propertythat provides a "ready" view of these activities.

Surveillance can be an extremely persuasive tool when coupledwith good results. However, badly managed surveillance operationscan result in a disastrous outcome, eclipsing the exposure of thevery claim it is investigating. Possible negative outcomes rangefrom the claimant discovering the presence of the surveillance tocriminal charges or legal actions being filed against theinvestigator, including:

? Invasion of privacy

? Trespass

? Intentional infliction of emotional distress

? Negligence

? Stalking/Harassment

? Restraining orders

To protect both the claim and the employer, it is imperative toproperly and thoroughly vet every provider to ensure that allcurrent investigative and surveillance best practices areutilized.

Steve Cassell is the president and owner of RSightInvestigations, which provides full-service fraud abatementservices to the insurance community in Florida, Georgia, NorthCarolina, and South Carolina. www.rsight.com. Cassell will speak onthis topic during the 64th Annual Workers'Compensation Educational Conference and 21stAnnual Safety and Health Conference August 16-19 at theOrlando World Center Marriott.