Why Do Businesses Need Kidnapping & Extortion Insurance in 2022?
According to the World Bank, global extreme poverty is on the rise for the first time in more than two decades because of the COVID-19 pandemic. This increase in poverty may lead to a rise in economically motivated kidnapping and extortion incidents, and some regions have already experienced troubling surges in reported incidents. For businesses, these crimes present a real and significant threat to both the safety of individual employees and the organization’s financial bottom line. Here’s why many businesses need kidnapping & extortion insurance in 2022.
An Increase in Reports of Kidnapping
In 2021, alarming rises in reported kidnappings made headlines. Many of these incidents involved ransom demands.
Haiti in particular has been plagued by kidnappings. According to the United Nations, The Center for Analysis and Research in Human Rights reported 119 kidnappings in the first half of October alone.
In one harrowing instance, a group of 17 missionaries from Ohio-based Christian Aid Ministries were kidnapped in October while they were visiting an orphanage in Haiti. According to BBC, the kidnappers demanded a ransom of $1 million per hostage, although it was not clear if any money was paid, and 12 of the hostages escaped on their own. Approximately two months after the kidnapping, Christian Aid Ministries announced that all 17 hostages had been freed.
Nigeria has also experienced a recent surge in kidnappings. According to HumAngle, data from the Nigeria Security Tracker shows that the rate of kidnapping in Nigeria more than doubled in the first half of 2021. Bulama Bukarti, a senior analyst in the extremism policy unit of the Tony Blair Institute for Global Change, told Vox that the kidnappings are economically motivated, and kidnap-for-ransom has become the “most lucrative industry in Nigeria.”
Although these extreme surges have been regional, kidnapping for ransom schemes can happen anywhere in the world.
The Threat of Extortion
Criminals may also use extortion to try to force businesses to make payment. For example, criminals may threaten to damage property or hurt people if their demands are not met. Other extortion schemes could involve the disclosure of trade secrets.
As with kidnappings for ransom, extortion schemes may also be on the rise due to the pandemic and the resulting economic trouble. In one example of a regional surge, extortion has increased 30% in Baja California since the pandemic, according to San Diego Red. Kidnappings are up 14% in the area.
Protecting Your Business in Uncertain Times
The world is still grappling with the COVID-19 pandemic. At the same time, climate change and an increase in natural disasters may lead to further global unrest and economic uncertainty. These challenges may contribute to further increases in kidnapping and extortion.
The effects of a kidnapping for ransom scheme can be devastating. The lives and safety of your workers may be put in jeopardy. Additionally, your company can incur expensive costs, including the ransom payment, as well as crisis management costs, medical and psychiatric care costs, and legal liability. Extortion incidents can also involve significant costs.
Tangram’s kidnapping & ransom insurance program provides coverage for kidnapping for ransom, hijacking, detention, and multiple types of extortion. Coverage can provide payments as well as key services designed to prevent and manage incidents.
The goal of risk management is to prevent incidents from occurring and to provide traveling employees with training to help them stay safe. If a kidnapping or extortion attack occurs, proper management of the crisis can help increase the odds of a favorable outcome. Important services can include the handling of negotiations, the delivery of funds, and independent investigations.