Part two of a series on specialized risk insurance. Read part 1 Does your client need global insurance?

The recent kidnapping of U.S. major league baseball player Wilson Ramos highlights the importance of special-risk insurance products. Thankfully, the catcher for the Washington Nationals was rescued after a November gunpoint abduction outside his home in Valencia, Venezuela.

Wilson was one of over 1,000 reported traditional ransom kidnappings reported in Venezuela this year. Problem is, the vast majority go unreported and Venezuela’s National Statistics Institute claims more than 16,000 people were kidnapped in 2009.

Kidnapping for ransom is a billion-dollar worldwide business run by experts in planning and negotiation. If your clients regularly travel outside of North America for work or pleasure, it’s a threat worth considering. Western travellers are targets in many cities (see “Kidnapping hotspots”), and your clients don’t need to be billionaires or professional athletes to be at risk. Even the U.S. shares in this problem: Phoenix, Arizona reported 318 kidnapping incidents in 2009, though most were drug-related.

How can you help clients?

Specialist insurance companies have developed kidnap and ransom insurance. The plans provide coverage for:

  • ransom money
  • informant money
  • crisis management services
  • accidental death
  • legal liabilities
  • rehabilitation
  • personal security consultation
  • reward money
  • negotiation services
  • family counselling
  • loss of ransom in transit
  • medical services and emergency evacuation
  • interpretive and forensic services
  • business security consultation

In the past six years, there has been an estimated 100% increase in both the occurrences of kidnapping and in ransom demand amounts. More than 14 countries recorded cases of $25 million or more in settlements in recent years.

So, in addition to being emotionally devastating for your client’s family, such events can be financially damaging.

Most insurance plans are customized and there’s an extensive application that provides underwriters with the information required to assess the case and set the premiums. Factors they look at include length of travel, itinerary details, reason for travel, location and policy limits. Cost is around $1,000 per year, or more depending on specific factors.

While global integration has created incredible business opportunities, a side effect has been exposure to crimes such as kidnapping and extortion. As corporations grow internationally, they face the challenge of protecting their valuable employees in what at times are hostile environments. contains country-specific advisories regarding kidnapping risk.