Kidnap & Ransom Insurance coverage needed now more than ever
There has been an incredible increase in political and economic unrest which has caused a serious jump in kidnappings worldwide. The targets of these kidnapping has also expanded beyond executives and multinationals, and now includes students and non-profit workers as well. Studies by the State Department report over 20,000 kidnapping for ransom annually worldwide, and 48% of these reported kidnappings take place in Latin America and the Caribbean. The latest hot spots for kidnapping include Brazil, Mexico, Colombia, Philippines and Venezuela. Other counties where kidnapping and extortion are on the rise include Haiti, Argentina, South Africa, Nepal and India. The Indian Government acknowledges that in 2009 there were over 700 active kidnap for ransom groups in the country.
If there is a silver lining in all this it is that insurance coverage for these perilous actions are now widely available, via a Kidnap, Ransom and Extortion policy (KRE or K+R). These policies are comprehensive, providing reimbursement for ransom, public relations support, expert guidance and counseling with experts. These experts have extensive experience in the methods, patterns and process of the groups that are involved in terrorism.
A few important items when purchasing K+R, particularly for those companies with activities in kidnap prone areas, are to make sure the policy covers everyone that falls under your organization’s umbrella. Another critical item to review is the breadth of extortion/threat of ransom to make sure transit for a person or group are covered. Another item is the level of experience of the organization that manages negotiation and extraction. When researching this, we suggest having a brief conference call with the experts to learn if they have feet on the ground in the subject country, or if they have successfully done negotiations there and how recently.
There is an active insurance marketplace for coverage with many major players, including ACE, Chartis, Chubb and Travelers as well as some lesser know specialty players. This allows the buyer to negotiate favorable terms and conditions at what I believe to be reasonable pricing.
Kidnapping for ransom is an ancient crime and it continues to be a profitable endeavor in many parts of the world. Technology and political unrest have allowed these groups to expand their repertoire to include extortion and cyber crimes. A well order KRE policy can assist potential victims of these crimes in responding effectively to such events.
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