This article was initially queued for December however, the recent headlines have moved it forward. I am glad my past organizations had K&R insurance in place. I am even more thankful that some of previous business owners I worked with had the foresight to put these policies in place for all company personnel worldwide and not just as an executive perk.
K&R insurance provides a combination of financial indemnification and expert crisis management. The premiums are based on a variety of variables: geography, travels, past ransom incidents. Most coverage can be purchased for <$600/year. Most kidnappings are not reported publicly so data is rare. 90% of cases are not reported. Kidnapping is a well organized crime enterprise. Lloyd’s of London compiled statistics organized enterprise. The latest data I could find was 1992-2002:
Since that time there has been a rise in kidnappings in Iraq, Afghanistan and Africa as armed conflict has risen there.
Corporations have become a bigger target of kidnappers than celebrities and political figures. Companies are perceived as having deeper pockets than individuals. Paying a ransom is solving the problem after it has occurred. There is still the support for the victim’s family, management disruption and stress that occurs after the kidnapping fact. A fuller risk management approach would be preventive and include:
The existence of K&R insurance is an employee benefit, however, knowledge of the existence of such policies should be on a need to know basis only. It should not be discussed externally as it increases the probability of a kidnapping incident and may be cause for coverage termination. My research indicates that AIG, Chubb and Travelers Group are prominent insurers offering this type of coverage. Consider K&R insurance as a cost of doing business abroad. You may want to refer to the post below:
I do not pretend to be an insurance expert, I do pretend to be an expert on international business development topics so please contact me in that vein. Have a great Thanksgiving!