Insurance fraud isn’t just an industry problem, it’s a business problem. Fraud costs the U.S. an estimated $308 billion every year, with property and casualty fraud making up nearly $90 billion of that total. Those losses trickle down in the form of higher premiums, stricter terms, and challenges when it comes to securing coverage.

What Fraud Looks Like

Fraud takes many forms, but the most common include:
• Exaggerated claims (overstating damages after an incident)
• Premium misrepresentation (leaving out information to get a lower rate)
• Third-party fraud (contractors or service providers inflating costs)
• Property fraud (padding claims after a disaster or even arson-for-profit)
• Liability scams (staged slip-and-falls aimed at businesses)

Why It Matters to You

Every false claim puts honest businesses at risk. It drives up insurance costs, impacts your ability to get coverage, and creates unnecessary legal exposure. Even being caught up in a fraudulent claim, without doing anything wrong, can drain time, money, and focus away from your operations.

How the Industry Is Responding

Carriers are investing in fraud detection tools, data analytics, and special investigative teams to identify and prevent fraud faster.

What You Can Do as a Business Owner

Fraud prevention isn’t only an insurer’s job. Companies that take proactive steps can help protect their bottom line:

• Tighten Internal Controls
  Maintain clear documentation on claims, expenses, and vendor relationships. Require multiple approvals for large purchases or repairs.

• Educate Your Team
  Train managers and employees to recognize red flags, such as inconsistent accident reports or sudden vendor changes.

• Work with a Trusted Broker
  An experienced insurance partner can spot policy gaps, monitor claim activity, and advocate on your behalf when suspicious claims arise.

By staying vigilant, you not only reduce the risk of paying for someone else’s misconduct but also strengthen your negotiating position when it’s time to renew coverage.