Kidnap and Ransom Insurance – A Necessary Evil
The risk of being kidnapped may not be the most common risk but it is increasingly becoming a risk that foreign nationals, in particular, face in South Africa.
Aside from it being a hugely traumatic experience for anyone to go through, the people or business dealing with the incident may also potentially face tremendous losses. Costs can occur naturally as a result of paying a ransom but such an event may also result in legal proceedings, interruption of day-to-day business and possibly reputational damage.
Often, such incidents are opportunistic and may be carried out during a carjacking or robbery, but recently it has become clear that kidnap-for-ransom events run by organised, sophisticated crime syndicates, motivated purely by financial gain, are occurring more often. The victims are typically high-net-worth individuals or their families who are generally not of South African descent. They are often kept captive for months while ransom negotiations ensue. Ransoms are often demanded to be paid locally and can run into millions of rands or even US dollars.
With this increasing risk it is advised that companies and high-net-worth people prepare themselves by insuring their businesses and their families against this unfortunate event.
The reasons such individuals should seriously consider kidnap and ransom insurance includes protecting their wealth and reputation, should they pursue business opportunities in high-risk environments (certain countries in Africa carry a higher risk of kidnap-for-ransom events), to comply with corporate governance and fulfil their duty-of-care to employees, and to gain access to risk management expertise.
What is covered?
Praesidio Risk Managers (Pty) Limited offers a number of comprehensive insurance policies providing cover for kidnap and ransom risk. These policies include cover for kidnapping, extortion, product extortion, detention, hijacking, disappearance and hostage crisis. Insured losses include ransom, loss of ransom money in transit, unlimited fees of response consultants, legal liability, disappearance investigation fees, hostage crisis cost and expenses, personal accident and other additional expenses. Policy extensions exist for the following: threat expense, emergency political evacuation and repatriation, loss of earnings, product loss or recall, computer virus business interruption, child abduction, express kidnapping and assault expense.
Talk to your Garrun broker about Kidnap and Ransom cover, and how this may benefit you.