expertise, oversee operations, or assist in logistics, distribu-
tion, and so on. While overseas, these personnel are exposed
to the same risks as when doing business in the United
States, with the exception that the risks may be more com-
plex. Benefits, disability issues, Workers’ Compensation,
auto liability, and general liability are a few of the risks to ac-
company personnel overseas.
In certain countries, there may be a host of other expo-
sures based on local customs, culture, and legal differences.
Additionally, personnel who travel overseas are subject to
kidnap and ransom exposures. Kidnappings of business per-
sonnel have occurred in Central and South America, the
Middle East, and Europe, among other countries. Many times
company personnel and the general public are unaware of
these occurrences because the parties involved usually decide
to avoid publicity. Although is it not well-known, many cor-
porations maintain dedicated kidnap and ransom personnel.
One of the most important benefits of having a kidnap and
ransom policy in place is that it provides immediate access to
expertise that can assist in managing a kidnap and ransom
situation. Kidnap and ransom underwriters typically employ
former Federal Bureau of Investigation, Interpol, and Central
Intelligence Agency staff with the skills necessary to inter-
vene with hostage-takers and negotiate a favorable resolve. If
an executive is taken hostage, the kidnap and ransom policy
affords access to the expertise to take the next step.
If an executive traveling overseas is injured, sick, lost,
or requires personal assistance, there are companies re-
lated to the commercial insurance industry that provide a
global emergency hotline. Corporations and individuals
who travel overseas can purchase access to these services.
Kidnap and Ransom
When a company makes plans to locate overseas, it is
important to become familiar with the risks associated with
living and working abroad. One of the risks, which is often
RISK MANAGEMENT AND INSURANCE 141
overlooked, is the chance that a staff member could be kid-
napped. It is estimated since 1995 until the present that kid-
nappings around the world have increased 100 percent.
Ransom demands can be overwhelming. More than 14
countries have recorded ransom amounts of $25,000,000 or
more in recent years. Although kidnappers usually settle for
10 percent to 20 percent of the demand, in certain territo-
ries they refuse to negotiate and use violence to achieve
their aims. Most kidnappings are carried out to obtain a ran-
som, and in most cases a ransom is paid. Rescues are rare,
largely because the authorities in most countries recognize
that the safety of the victim is paramount.
Kidnappings can occur anywhere. Insurance companies
that specialize in kidnap and ransom coverage understand
the challenges involved in living abroad. Kidnap and ran-
som coverage offers confidential protection should the need
arise. This insurance coverage provides assistance to the
family and business, including independent investigations,
negotiations, arrangement and delivery of funds, and nu-
merous other services vital to a safe, speedy, and satisfactory
resolution. The typical kidnap and ransom policy covers the
following:
Ransom paid following a kidnap or threat to kill, injure,
or abduct
Hijack
Detention
Death or dismemberment
Legal liability
Crisis management team expenses
The risks in different countries vary. The expertise of the
insurance brokers and underwriters that manage these ex-
posures will assist in determining the proper protections.
Personnel traveling overseas present a serious risk to the
companies that send them. Failing to properly protect them
can present another liability to a company; the company
142 GLOBAL SOURCING LOGISTICS

Get Global Sourcing Logistics: How to Manage Risk and Gain Competitive Advantage in a Worldwide Marketplace now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.