Defining kidnap and ransom insurance
Kidnap and ransom insurance sound a lot like a solution to a ‘Hollywood hostage’ movie situation. Sending in a tactical response unit to a dangerous, distant country to extract the VIP and bring them back alive. While, there is in fact cover for this (thank goodness, as I’m sure you were worried there for a second!) it actually covers far more than that.
Over and above hostage-type situations, a typical kidnap and ransom policy would also include situations like home invasion, wrongful detention, cyber extortion and ransomware, product extortion, consultants’ fees and legal liability. Policies can be extended to include stalking, assault, emergency political repatriation, business interruption (loss of earnings and cyber extortion), as well as product loss and recall.
For example, if a food manufacturing company receives a threat that a batch of one of their products has been poisoned and the details of such will only be given on payment of a ransom, the kidnap and ransom policy would cover the costs of crisis management consultants, the ransom, stakeholder communications, product recall, restocking retailers, loss of earnings as a result of the threat, and the cost of any legal liability that may arise.
But it’s not just companies who are at risk. Incidents of individual kidnap for ransom are on the rise around the world. High net worth individuals and their families are particularly at risk, especially when traveling abroad. As South Africans we tend to think we’re street savvy – but anyone in an unfamiliar environment is at risk, no matter how aware you think you are. In any country, even here in SA, there are people who are looking to make a political statement or get some extra cash in their pockets. No one should think they’re immune.
One of the most important components of kidnap and ransom insurance is response consultancy.
Handling negotiations with kidnappers is a delicate process. If you agree to their terms too easily, you could be considered a soft target. If you refuse to negotiate, the risk of losing your colleague or loved one is very high. There are people who specialise in hostage negotiation – they know when to make a deal and when to give in. It’s a very delicate process with far too much at stake to try and handle it yourself.
Call us anytime or speak to your RBS broker for more information on Kidnap and Ransom Insurance for both you and your business.