The Financial Impact of Kidnapping
September 20, 2018
Kidnapping crimes sound like the stuff of movies. Remember the 2016 movie Firewall, where the family of a bank security expert is held hostage while kidnappers demand he steal $100 million through the security system he created?
These terrifying and dramatic incidents happen in the real world, too. Yet a recent survey of over 1,800 organizations ranked “kidnapping, ransom and extortion” 55th out of the 55 biggest fears. That’s not surprising since you don’t often see kidnapping in the news, perhaps in part because estimated 65% to 70% of overseas kidnappings of US citizens go unreported.
Consider the costs of a potential 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 a business’ 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 family or business may face a significant financial drain, with or without paying any ransom monies.
Here are five reasons you should consider purchasing Kidnap & Ransom coverage:
1. Your employees are your company’s most valuable asset, and their safety is paramount. Risk mitigation measures are critical for most organizations with a global footprint.
2. Estimates indicate there are between 12,500 and 25,000 kidnappings a year worldwide. Furthermore, it appears that only 10 percent of kidnappings are actually reported.
3. Families and companies without a global footprint and nonprofit organizations are also at risk. Several types of coercion are more common in the United States, and potential targets of threat or extortion can include organizations with strong brand name recognition, recent layoffs or policy changes.
4. Preparation and preventive measures are not a luxury. They are simply a cost of doing business to provide peace of mind to protect your financial stability.
5. Expenses associated with a kidnapping, extortion or illegal detention – even when no ransom demand is paid – can significantly impact your balance sheet. Unexpected expenses can include fees of negotiators, investigators, attorneys, public relations professionals, forensic analysts, security guards and consultants.
Content courtesy of IIABA and Travelers Insurance