Management liability claims have surged following the global downturn as staff succumb to white-collar crime and gambling.

Dual Australia MD Damien Coates told insuranceNEWS.com.au the underwriting agency has recorded a 400% increase in claims, with criminal acts particularly prevalent.

Management liability policies typically provide cover for directors and officers as well as employment practices.

“Every industry is feeling it, every business has pressure on the margins and people have tightened their belts,” Mr Coates said. “Unfortunately in desperate times people are exposed out there to gambling and other activities they wouldn’t otherwise do.”

Vero spokesman Sue Repanellis says the insurer has recorded increased claims in employment practices and fidelity lines, while insolvency and financial-distress related actions have also risen.

“We have seen an increasing frequency of notifications related to employee dishonesty,” she told insuranceNEWS.com.au.

“Figures have shown that there is an increase in unfair contract and wrongful termination claims. We believe these could be on the rise due to employers experiencing distress through cutting back both employee hours and headcounts.”

Mr Coates says that in a few cases, annual profits for small firms “would have been halved if cover wasn’t in place”.