Is Your Organization Being Proactive Regarding Kidnappings – It Needs to Be   

The kidnapping of Steve Dennis — and the costly lawsuit against the organization for which he worked — serves as a reminder of the importance of kidnap & ransom (K&R) insurance. In 2012, Dennis and three other people working for the Norwegian Refugee Council were kidnapped as the convoy they were in drove through the Dadaab camp in Kenya. One staffer was killed, and Dennis was shot in the leg.

After four days of marching, the captives were freed by a Somali group near the Somali boarder. Dennis stated that he suffered post-traumatic stress disorder after the accident, preventing him from working in the field of humanitarian aid. He sued the NRC for gross negligence and was awarded 4.4 million krone (about $500,000), plus costs. He sought 11.6 million krone. Not only did the Norwegian court award the money, it criticized the NRC, finding that it failed to assess the dangers staffers were exposed to, and the organization’s investigation process.

The case served as a wake-up to organizations as to the importance of training employees for kidnapping.  A well-designed kidnap & ransom insurance policy can be part of your toolkit to hopefully protect against kidnappings or manage them if they occur. 

Kidnappings – A Risk That Can’t Be Ignored

While there’s a perception that kidnappings of expats and tourists are most likely to happen in certain Middle Eastern countries and third-world nations, the fact is that they can happen anywhere. The Americas accounted for 21 percent of foreigner kidnappings in 2014, predominately in Mexico. Some criminal organizations use kidnappings as a source of revenue, and both your national and international staff are at risk in these types of attacks.

While a standard kidnapping, where a person is abducted and held until a ransom is paid, is certainly not a common occurrence, it does happen. Express kidnappings are also becoming more prominent in several parts of the world. Therefore, taking some time to explain kidnapping risk, and how to avoid and handle it, to employees is a smart idea.

Kidnappings on the Rise Express kidnapping is when someone is abducted, often in a vehicle they think is a taxi, is taken to an ATM, and then is threatened at gunpoint to withdraw funds and give the money to the kidnappers. In most express kidnappings, the victim is not seriously injured because the goal for the kidnappers is to get cash and let the person go.

Express kidnappings often take place in Latin American countries, with Argentina, Brazil, Mexico and Venezuela reported to be high-risk spots. Other countries where express kidnappings are on the rise include Bolivia, Venezuela, Ecuador, Colombia, El Salvador, Guatemala, Haiti and Honduras. Express kidnappings are increasingly being reported in African countries, such as Kenya, Mozambique, Nigeria, South Africa, Zimbabwe, and others.

Where do K&R Policies Come In?

“There’s a lot more to kidnap and ransom insurance than paying a ransom,” says Kevin Pedone, a producer for Clements Worldwide. “It is one of the insurance policies that truly provides a 3 pronged approach to the risks at large.  The policy provides pre, post, and during a crisis services that is designed to mitigate risk.”

K&R policies also give you access to crisis response specialists to help deal with the event as a whole. These specialists, usually former military or FBI professionals, can provide training and advice on developing an educational program for employees.

Of course, all policies aren’t the same. “Make sure you know what your needs are when researching your policy,” Pedone says.  Depending on areas of operations, the types of kidnapping employees are more likely to face differ.  For example an aid worker in Afghanistan or Iraq has different risks than a worker in Haiti.  “Your insurance policy and the subsequent training can be customized based on your operations.”

Does the policy need to cover national and international employees as well as people working with your company who aren’t employees, such as volunteers and consultants? When negotiating a policy include a list of who and what needs to be covered. Other expenses the insurance may cover are accidental death or dismemberment; judgments and legal liability; consultant fees; medical and psychiatric care; lost income due to loss of employee; risk prevention services, and more.

You also may need add-ons, such a business interruption, and political evacuation and salary continuation insurance depending on where you are operating and the nature of your work.

Among the coverages available from Clements Worldwide’s extortion, kidnapping, and ransom insurance is full reimbursement for ransom monies that are paid as a result of a kidnapping or extortion. It also may cover the loss of any ransom monies through destruction, disappearance, confiscation or wrongful appropriation. Your crisis response team will be critical here.  If money needs to change hands, the team can take care of the drop-off. Drop-offs can be dangerous or complicated, so professional experience is essential.

How K&R Insurance Can Help Prevent an Unfortunate Event

Companies should consider sending employees to training programs. Risks Incorporated offers one-day and three-day training programs in Miami and in Europe. The program promises to teach students how to avoid, and deal with, kidnappers; counter kidnapping procedures; and educate students about cultural environments and potential problems. It also simulates kidnap and ransom situations. By requiring employees take such training classes, you are demonstrating duty of care to that employee, i.e. taking reasonable and necessary steps to protect your employees from that risk. Most importantly, training will hopefully limit this risk, but secondarily it can protect your organization and its mission from a lawsuit should such an event occur.

In addition to a comprehensive training program, you should also provide written policies in your travel guideline that give basic tips when traveling abroad. For example, employees should be advised to only schedule car services from reputable sources, such as someone from their hotel. They also should travel the most populous routes. Hailing cabs on the street should be avoided, and they also shouldn’t be walking alone at night. Avoiding places where people are likely to have lots of cash on them, such as casinos, is a good idea.

Another proactive management tool with many policies is an online portal providing up-to-date information on the political environment of a country where you have business. This will help keep you informed so that you can set up evacuations if necessary, and possibly avoid having employees kidnapped and held for ransom. Additionally organizations should explore employee tracking tools, which can keep companies informed of employees’ whereabouts which would provide assistance if a kidnapping occurs, as well as provide support for employee safety during natural disasters and political or military upheaval.

Provide Regular Reviews and Updates to Your Risk Management Plan

Your risk management plan should include steps for dealing with K&R risk before, during and after an event – from employee training to prevent events to management communication to resources available to support the trauma experienced during the event.  Many organizations lack the knowledge or skills to start putting together such a plan. This is where a crisis management firm comes in. Kidnap and ransom insurance policies will often cover consultation pre-event with a crisis management firm as well as support during and after an event. The crisis management firm can help conduct an initial assessment and help to improve your readiness for a K&R event. 

Ultimately with kidnap and ransom insurance, you will be better equipped to hopefully prevent or deal with a kidnapping event if it occurs with tools in place that address kidnapping risk with a three pronged approach, from planning and training, to crisis management, to post event support. 

Call us today at +1.202.872.0060 or 800.872.0067 or e-mail request@clements.com to discuss solutions tailored to your organization's insurance needs.

Learn More about Kidnap & Ransom