Organizations that send employees to destinations with a high risk of kidnapping should seriously contemplate kidnap and ransom (K&R) insurance. K&R insurance protects individuals and corporations, typically covering kidnapping, extortion, wrongful detention and hijacking. K&R policies may also indemnify personal accident losses caused by kidnapping, and will generally cover the fees and expenses of crisis management consultants.
When looking at a K&R policy, there are a number of questions that organizations should ask their broker or insurance provider. An inability to answer some (or all) of these questions should raise red flags about the broker. In effect, buying K&R insurance from an unqualified provider is akin to buying car insurance from a company that has never seen a car. They understand the concept, but they don’t know how to drive.
Top five questions to ask about kidnap & ransom insurance
1. Do I need to train my employees?
If the insurance provider says “no”, your organization should walk away. K&R insurance providers should have access to reputable, government-certified instructors and trainers. Providers should also offer organizations a discount on premiums if they provide the appropriate kidnapping prevention and awareness training for their travelling workforce.
2. Do I need to train the company management?
A reputable and knowledgeable K&R provider will say “absolutely”. If they do not, they are likely ill equipped to deal with this type of crisis. The insurance provider should be able to do the following:
- Make available training that is relevant to the specific organization’s country and issues; e.g., having an instructor in Canada who can talk about the United States’ National Security Presidential Directive 12 (United States Citizens Taken Hostage Abroad), but not Canadian federal responses is inadequate
- Provide family support training to help cope with the social media aspects, reputational risk and ethical obligations that come along with a crisis situation
3. Who is your response provider?
In most cases, it is not the actual insurance provider that will deliver the support or crisis management training or consulting. Clarify with the provider who will provide these services and what their level of experience is. Ask about language skills and credentials and gather details about what specific support services will be provided to the company (management, media, family, etc.) and by whom.
4. Who will support the kidnappee(s) when we get them back?
The insurance provider should have a clear answer to this question. If they don’t, consider walking away. The provider should have access to an organization that possesses qualifications in the area of post-captivity support. Individuals who have been in these situations require specific help upon release from captivity.
5. What can I do to help the government respond?
There are a number of steps that an organization can take to help the government in a hostage or crisis situation. The insurance provider may tell an organization that it doesn’t need government “interference”. There are even cases of Canadian K&R insurance providers trying to do everything they can not to inform the government of a crisis situation. However, an increasing number of countries is making paying ransom payments illegal, and several responders have been arrested while transporting the ransom. (If authorities can arrest them in Mogadishu, they can do it anywhere.) Having the government safety net is vital and part of that due diligence expectation.
Ultimately, kidnap & ransom insurance needs to be looked at like any other insurance policy. The cheapest is not necessarily the best, and the details are important. Hostage-taking and kidnapping, despite being a growing industry, is still a little known topic, which makes it difficult for organizations to know what to ask. Remember to ask the questions above; it could one day mean the difference between life and death.
John Proctor
Integrated Human Risk Solutions
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- After the Chilean mine disaster – How HR got it wrong - August 16, 2011
