4th August, 2014

Employee theft emphasises the need for management liability cover

The most recent report into employee theft from Pricewaterhouse Coopers (PwC) has highlighted the ever-increasing costs of employee theft, raising the importance of management liability insurance.

The yearly survey has identified how the face of white collar crimes is changing across the world, with 37 per cent of those companies surveyed reporting some form of economic crime in 2014. This compares to only 30 per cent in 2009 and 34 per cent in 2011.

Similar numbers were also seen in Australia, with 57 per cent of Australian companies experiencing some form of economic crime in the last two years, up from 45 per cent in 2012.

Another key factor was the rise of cyber crimes in the country. PwC found that one in 10 Australian firms reported losing more than $1 million in cybercrime across the last three years. 

Faced with these challenges, it is more important than ever to add management insurance cover to your business insurance. This cover can give you an added level of protection against claims which might arise from employee theft or cyber crime.

While the report contained some sobering facts on the prevalence of these crimes, there was also a shift away from the profile of those who might behave fraudulently in the workplace.

The survey found that middle management employees are increasingly responsible for economic offences, making up nearly two-thirds (65 per cent) of the total crimes committed in Australian businesses. Age-wise, those between 31 and 40 were the most likely to steal from their employer. 

Faced with these pressures, businesses will need to ensure they have the right processes and protection in place so any illegal activity from staff members can be handled quickly and appropriately.

Author: Murray Bruce