Being kidnapped isn't something most people consider to be a hazard, and generally they give it no thought. However, it's a serious risk in many parts of the world.
|'Express' kidnapping
Express kidnapping, which sounds like a variety of fast food, occurs when an executive is grabbed at an airport, quickly pulled into a vehicle and taken to multiple ATMs to withdraw money.
There is usually a 24-hour withdrawal limit at the ATM, so the person is kept for two to three days and then released.
Executives are easy to spot: They tend to be well-dressed, with multiple electronic devices and expensive briefcases, and they tend to come off the plane early, having flown first or business class. Once the kidnappers identify the victim and the level of importance within the company, the situation may escalate. The employer and the family often pay to avoid risking harm to their employee or loved one.
|4 insuring agreements for coverage
Coverage, provided by ISO Form CR 00 40, Kidnap/Ransom and Extortion Coverage, has four insuring agreements:
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Kidnap/ransom and extortion — direct loss,
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Kidnap/ransom and extortion — expenses incurred,
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Detention or hijack, and
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In-transit delivery of property.
In most cases an individual is kidnapped for cash, but other property may be demanded as well. All are covered by insuring agreement one.
The fourth insuring agreement covers the loss of property in transit in the custody of a messenger.
|Definitions are key
The form distinguishes between "kidnap" and "hijack." A kidnapping occurs when someone is involuntarily abducted by force for the purpose of demanding money or other exchange for their release. Hijacking involves holding the victim under duress while traveling in a motor vehicle, aircraft or watercraft for any reason other than kidnap.
Hijacking is covered in the third insuring agreement as long as it is for an "insured person," which includes directors, trustees, partners, members or employees of any insured, and relatives, guests or residents in the household of an insured person or a messenger. Relatives include spouses, children, stepchildren, adopted and foster children, the spouse of a married child, a grandchild, brother, sister, parent, adoptive parent, step-parent, grandparent, brother-in-law or sister-in-law, parent and grandparent-in-law.
|Understand the exclusions
The policy excludes dishonest, criminal or fraudulent acts committed by an insured person or named insured. It also excludes the surrender of property inside the premises unless first brought inside after receipt of the ransom or extortion demand, or outside the premises as a result of a threat to do bodily harm to a person in possession of property other than a messenger.
|Coverage should be confidential
Keep such coverage confidential. The more people who know about it, the likelier it is that kidnappers learn that employees of this company would be prime targets because insurance coverage exists. Kidnappers would likely see this as easy money and target such employees; therefore, it's best if the employees have no knowledge of the coverage.
Christine G. Barlow, CPCU is managing editor with FC&S, a resource for insurance coverage analysis. She may be reached a [email protected].
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