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Businesses travelling acrossborder need protection against kidnapping

The recent investigation by Al Jazeera, which revealed that a ransom of $500 000 was paid for Italian-South African hostage Bruno Pelizzari and his South African girlfriend, Debbie Calitz, when they were kidnapped by Somali pirates, has blown open the secret underworld of kidnapping and ransom in Africa.

Kidnapping on the continent is a ‘growing industry’, which is shrouded in secrecy mainly because in most countries paying a ransom is illegal. Most governments are against negotiating with terrorist organisations or hostage takers and will not pay a ransom. With Africa’s gross domestic product (GDP) expected to increase to 4,5% in 2015*, an increasing number of South African businesses are looking to expand their services into Africa. However, it is important for these businesses to protect their employees given the fluid nature of the political situations in certain territories.

Many businesses are not aware that they can actually purchase insurance to cover the expenses should someone in the organisation be kidnapped. The challenge with this type of insurance is that one has to be very careful not to encourage kidnapping because there is insurance. Confidentiality is an utmost priority and it is a firm condition by the insurance provider that only key personnel are aware that the cover is in place.

Businesses of all sizes – from large corporates to two-man startups – that have people travelling should look at investing in kidnap and ransom insurance. The impact of a kidnap can be enormous leading to significant losses from ransom payments, business interruption, litigation, adverse publicity and long-term damage to reputation.

It must be noted that kidnap and ransom cover is a re-imbursive insurance policy. However, 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 specialized 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.

When a hostage situation happens, the kidnappers are likely to contact the victim’s family or their company. 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.

Kidnap and ransom insurance is something that every business should consider if they have people travelling into Africa. 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.

SIMON COLMAN, Underwriting Executive of SHA Specialist Underwriters 

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