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Business Insurance

Kidnap and Ransom: The Business Risk Nobody Talks About

August 9, 2022

If your employees travel domestically or abroad for your organization, they face the genuine threat of kidnapping, extortion or illegal detention. Any business and anyone can be a target.

Has your company put security precautions in place? Has it defined a process in case an employee is detained or put at risk?

When an incident occurs, the situation can be very stressful, and time is of the essence. If unprepared, your business, the employee and their family may be at greater risk, and the situation may cost more to resolve. A kidnap and ransom insurance policy can help protect those involved from financial loss, and services provided may help to lessen the risk.

What Is Kidnap and Ransom Insurance?

Kidnap and ransom (K&R) insurance is designed to help protect your organization from the financial impact of sudden and unexpected expenses related to kidnapping, extortion, ransom or illegal detention. Most K&R programs also include proactive training and safety recommendations from highly qualified, experienced professionals.

The expenses related to a kidnapping scenario can be significant. K&R policies typically provide coverage for monies paid to kidnappers or extortionists, loss of ransom in transit and other expenses incurred as a result of a kidnapping. Outside of potential ransom demands, expenses may include fees for the following service providers:

  • Negotiators
  • Investigators
  • Attorneys
  • Public relations professionals
  • Forensic analysts
  • Security guards
  • Consultants

Reward money, interest on loans, additional salaries or extensive medical costs not covered by traditional insurance plans also may need to be accounted for in a kidnapping scenario. A K&R policy can help with these expenses.

Crisis Response and K&R Insurance

Almost nothing can prepare you to negotiate with kidnappers or extortionists. However, professional assistance before, during and after a kidnapping or extortion threat can result in a safe and successful outcome.

K&R policies often include coverage for the engagement of and immediate access to third-party security and crisis response firms. These firms assist your company in resolving and limiting the impact of the incident. If a K&R policy isn’t in place, the cost to purchase these services on their own can be millions of dollars.

Security firms also often provide insureds access to kidnapping risk analyses on a country-by-country basis, which includes risk ratings for kidnapping, security and travel. Services also can include bespoke analysis of the threat to a specific operation, workshop training to elevate and enhance an organization’s acute crisis response capability and kidnap crisis management plan creation.

Protecting People from Kidnap and Ransom Scenarios

In addition to protecting your organization with a K&R insurance program and using the resources it provides, your organization can take advantage of kidnap prevention and survival training available from numerous sources online and in person. Employers who ask their workers to travel overseas on business may want to provide formal safety education as part of their “duty of care.”

In addition, here are some traveler safety tips for consideration:

  • Educate yourself about your travel destination and the associated risks. The U.S. Department of State is a dependable resource for up-to-date information.
  • Sign up for the Smart Traveler Enrollment Program. You’ll receive updates from the nearest U.S. embassy or consulate and enable them to contact you in an emergency.
  • Travel with others, if possible, and be aware of your surroundings. If you must work in a rural area, consider hiring a security detail.
  • Carry business cards with only your basic contact information, not your company name or title.
  • In high-risk areas, avoid luxury hotels, high-end restaurants and public transportation. Vet your hotel carefully and use only licensed transportation providers.
  • Blend in. Dress to fit in with the locals. Leave flashy clothes and footwear, sports team apparel, expensive jewelry and fancy electronics at home. Don’t advertise your nationality.
  • Don’t publicize your travel plans on social media. Avoid making it easy for would-be kidnappers to track your position.
  • Vary your daily routine if you are in a country for more than a night. Avoid taking the same routes, eating at the same restaurants, working out at the same time and even staying at the same hotel.
  • Don’t make or take calls in public where you can be overheard. Also, be aware that your calls—and computer usage—are possibly being monitored.
  • Be aware that corrupt local authorities may be working with kidnappers in some countries.

Become educated. Take precautions. Remain aware. Make yourself as difficult a target as possible.

A Final Word About Kidnap and Ransom Insurance

Just because you don’t often hear about it doesn’t mean that kidnapping doesn’t happen. As with any business risk, the threat must be weighed, measured, mitigated and responsibly managed.

If K&R coverage isn’t part of your existing corporate or institutional insurance program, or if you would like to review your current policy, your local Hylant risk management expert is available to help.

Related Reading: To learn more about current issues and trends impacting commercial insurance programs, read our latest Market Update.

The above information does not constitute advice. Always contact your insurance broker or trusted advisor for insurance-related questions.

Authored By

Tom Kelsey

Tom Kelsey

Risk Advisor - Global, VP

Tom has extensive professional experience, managing a variety of clients in size, scope and industry. Tom’s primary experience is in the leadership of large complex multinational risk management accounts, with a focus on analytical analysis, risk optimization, and holistic service platforms.

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