Insurance fraud

What it means

Insurance fraud is deliberately misleading an insurer to obtain a claim payment one is not entitled to, or a higher payment than the facts justify. The Slovak Criminal Code treats it as a separate offence, with the penalty depending on the amount of damage caused.

Fraud takes many forms: reporting an insured event that never happened, exaggerating a genuine loss, submitting forged invoices or reports, causing damage on purpose, or concealing material facts when taking out the insurance contract.

An honest mistake, such as misjudging the value of an item, is not fraud. Intent is decisive. The line can be thin, however, when a company knowingly “rounds up” a loss or includes older damage in the claim.

How it works in practice

For our clients’ claims, we recommend documenting them precisely: purchase invoices, photographs, reports and expert assessments. Accurate evidence speeds up claims settlement and protects the company from suspicion of inflating anything.

When taking out cover, answer the insurer’s questions truthfully, for example about previous losses, security measures or the scope of activity. False answers can justify refusing a claim even if it is not fraud in the criminal sense.

In the accounts, the claim payment is booked as income and the loss as an expense. If the insurer later finds the claim was unjustified and demands repayment, a liability arises and the company must also correct the tax consequences. That is another reason precise documentation matters.

What to watch out for

Insurers have specialist fraud units, share information on suspicious cases and send loss adjusters on site for larger claims. Attempted fraud is detected more often than people think and ends with a criminal complaint.

A company should also have internal control over what employees report. If, for example, an employee hides that they were driving a company car under the influence and the company files the claim, the consequences fall mainly on the company as policyholder, including recourse.