• Kidnap & Ransom Insurance: Crime Insurance for Your Business

    Kidnap & Ransom Insurance: Crime Insurance for Your Business December 17, 2015

    Essential protection when seconds count

    The possibility of kidnapping, extortion, or illegal detention is a very real threat facing individuals, business, and organizations of all sizes. Estimates indicate there are between 12,500 and 25,000 kidnappings a year worldwide.1 Business owners and employees are not only at risk when at work, traveling domestically, or internationally, but even at home with the risk of home invasion. Is your company prepared?

    Kidnap and Ransom Insurance is designed to minimize the financial impact of kidnapping, extortion, or illegal detention on your business.

    Consider the costs of a kidnapping, extortion, or illegal detention. Even when no ransom demand is paid, or made, it can create unexpected costs and have a significant impact on your business’s balance sheet. Expenses may include the fees of negotiators, investigators, attorneys, public relations professionals, forensic analysts, security guards, and consultants. In addition, there may be reward money, interest on loans, and additional salaries to be paid, or extensive medical costs not covered by traditional insurance plans. Add that all up, and your business may face a significant financial drain, with or without paying any ransom monies.

    Crisis response support included

    One of the most important benefits of the right kidnap and ransom insurance policy is the immediate priority access to a crisis response team whose sole priority is the hostage’s safe release. Such consultants have many years’ experience in dealing with crisis situations, and this combined with their local knowledge allows for informed decisions to be made.

    Kidnap & Ransom Claims Scenarios

    Kidnapped for Ransom — $663,500

    The president of a company was kidnapped in the company’s parking lot and held for five days before a ransom was paid. The company incurred interest costs of one percent over prime to secure a loan for the $650,000 ransom demand. In addition, they had to pay a $2,000 per day fee plus expenses for an independent negotiator, $500 per day for the recording equipment used in securing the president’s release, and $200 per day for extra security guards hired to protect the president’s family.

    Threat of Violence — $4,000,000

    A company received a series of threats, including a photocopy of a gun, notes containing threats of violence against specific employees, and phone calls including recordings of gunshot sounds. The perpetrator/s initially demanded as much as $50,000 to stop the threats. In addition, a private security consultant was hired to analyze the notes, protect the premises, and the threatened individuals, and set up a drop site for the money demanded. The threats continued for over three years without any occurrence of violence. The cost of the private security firm’s activities eventually exceeded $4 million.

    Brunswick Companies is an independent insurance agency representing only A Rated carriers. We value our carriers’ investments in research and proudly share their market insights.

    1 “Kidnapping for Ransom” by Frank Zuccarella, The Rough Notes Co. Inc., May 2011