A kidnapping abroad is a terrifying concept. Assailants may leave you bound and gagged in a dark room or they might threaten you with torture to persuade negotiators to comply. What if you don’t have access to the kind of money they expected to get from you? What happens when no one knows how to help?
At OMIS, our clients recognise the risk as many have employees or contractors travelling to all corners of the world, and potentially in some high risk areas. Kidnap & Ransom cover is a cost effective way of ensuring you have the support and protection for your people at all times.
Insuring Freedom
The extreme physical and financial risks of a ransom case led to the creation of kidnapping insurance. Over the past few years, kidnapping has increased all across the world as more people turn to extreme methods of getting money. While many travellers feel they do not possess enough money to be targeted in a kidnapping, the truth is that a majority of kidnap victims have fairly average incomes. If someone is worth enough money to travel, they are worth enough to kidnap.
Kidnapping and Ransom (K&R) insurance is a specifically designed policy (personal or enterprise) that helps negate huge costs to individuals and companies who are victims of kidnapping. Though expensive, this insurance can make a sizeable difference in financial loss during the recovery period. K&R policies are purchased as long-term policies for individuals, executive groups, entire companies or expatriates. K&R policies are not generally available for individual trips.
K&R does not pay for the negotiations and ransom money during the kidnapping; it simply reimburses the victim for the payment he or she made. K&R will, however, cover all the expenses related to recovery: time off, temporary work replacements, psychiatric therapy and loss due to injury.
Once obtained, K&R policy limitations must be understood. Every insurance company can make their own rules about how its assets are to be used. If applicable, guidelines must be set up for communicating with the insurance company’s crisis team. What if the local government brands the kidnappers as terrorists and refuses to negotiate? Will the kidnappers demand more money if they discover their victim has a policy?
Knowing the Threat
Regardless of whether or not a person has a K&R policy, he or she must know how to act if kidnapped. A best practice is training workers how to avoid danger in the first place. Educating travelling employees on risks and foreign practices is essential to every aspect of their safety abroad.
Common K&R Insurance Practices
K&R insurance policy cover is typically in the millions. With such high monetary payout potential, the stakes for fraud prevention and risk management are much higher.
Many insurance companies attempt to thwart K&R fraud at its source: the dishonest policy holder. To do this, these insurers require that individuals covered by a company K&R policy do not know they have cover. Since the insurance company provides no advanced payment, an elaborate plan to commit fraud would be an expensive gamble.
In cases where policyholders are aware of their cover, insurers will usually attempt to provide training on how best to avoid a kidnapping. These courses can substantially reduce the risk of danger to the policyholder while also reducing the risk of loss for the insurance insurer.
Hoping for the Best
The harsh reality of kidnapping is that it can happen anywhere. Some areas of the world or parts of a country may be safer than others, but that doesn’t mean anything is guaranteed. Kidnappers are usually professional groups. They know what they are doing and how to ensure money is paid. By killing a victim they get nothing. The vast majority of kidnappings that take place every day end with the victim being safely released when some form of ransom changes hands.
Planning for the Worst
Overall, K&R insurance is a solid risk transfer option and can provide a wealth of services for employers and individuals alike. The only question anyone can raise is whether or not it is worth the cost. With individual premiums in the thousands of pounds, many individuals and small businesses simply can’t afford K&R plans. But, with the current upward trend of kidnapping, the truth may be they can’t afford not to have it.
In all difficult insurance decisions, an experienced broker can make all the difference in your peace of mind. Contact Offshore Marine to discuss how to best protect your employees as they travel to crucial markets. Call us on 0330 056 3665, or email us at [email protected]