During the past few months, there have been reports of various kidnapping incidents around the country. Last month a woman was abducted her home in Polokwane and held hostage for ransom. Earlier in the year, an eight-year-old was kidnapped outside a day care center in Port Elizabeth and a businessman from the North West was held captive while his abductors demanded R500 000 for his safe return. A journalist was also held captive at the beginning of this month while he was investigating claims of child trafficking in Krugersdorp. He was held hostage for two hours and the abductors drew money from his account before he was released.
Mandy Rutter, Head of Liability: Kidnap and Ransom at SHA Specialist Underwriters, says that while these victims were returned to their families unharmed but traumatised, this sudden increase of kidnapping in South Africa highlights that kidnapping and ransom demands are a scary reality of the world we live in. “Kidnapping is a ‘growing industry’ on the African continent, however it is mainly kept in secrecy because paying ransom is illegal in most countries.”
“Most governments are against negotiating with terrorist organisations or hostage takers and will not pay a ransom. It is increasingly important for businesses with operations in Africa to protect their employees given the fluid nature of the political situations in certain territories,” she explains.
Many businesses are either not aware of the existence of kidnapping insurance or the types of organizations, whereby employees are most vulnerable to kidnapping, says Rutter. “The organizations most valuable to kidnapping are those with employees travelling overseas, however, high profile status employees, those who work with sensitive information as well as technology and or large amounts of money are also at a heightened risk of being kidnapped.”
The aim of a kidnapping insurance policy is not to encourage kidnapping, but to reimburse the loss incurred by the insured. “Kidnapping and ransom insurance policies do not pay ransoms on behalf of the insured, however, the insured can seek reimbursement under the policy”. In addition to the reimbursement of ransom monies, kidnapping insurance also covers the loss of destruction, loss, confiscation and wrongful appropriation of money intended to be utilized as ransom money, the death or permanent disability occurring as a result of a kidnapping as well as judgements and legal expenses that occurred during the kidnapping.
However, Rutter notes that the real value behind having kidnap and ransom insurance is not only having the policyholder reimbursed for the cost of the ransom, but rather unlimited access to a team of specialised response consultants (highly trained and qualified individuals who primarily had first careers in military, police, special forces, intelligence and diplomatic services) who provide the best kidnap response advice services and dedicated support to secure the hostage’s safe and timely release with minimum disruption and minimum hardship.
“The proper management of a kidnapping by highly trained individuals is essential to protecting the life or well-being of the victim as well as the organisation’s assets.” The risk of kidnapping insurance increasing the likelihood of a kidnapping needs to be mitigated, thus confidentiality is of utmost importance. “When companies take out a kidnapping insurance policy, there is a firm agreement put in place by the insurance provider that only key employees are aware that the cover is in place”.
Whilst kidnapping cannot be prevented, businesses can take out kidnapping insurance to alleviate the damage caused by kidnapping to assist both the hostage as well as his or her family in the time of a kidnapping. When a hostage situation happens, the kidnappers are likely to contact the victim’s family or their company, she says.
“If the family is contacted, they will most likely know who to contact at the company and the policy will be kicked into action. The negotiators will never directly contact the kidnappers, they will instead guide the family members or company contact through the communication process. The hostage takers cannot become aware that they are speaking to expert negotiators because they will know there is cover in place and the ransom demands will go up.”
“Businesses of all sizes – from large corporates to two-man startups and especially businesses travelling into Africa should consider kidnap and ransom insurance. Businesses owe their employees and their families a complete duty of care and this cover should be considered as part of their overall insurance armory,” concludes Rutter.