Why do companies buy kidnap insurance?
Sources:
Companies buy kidnap insurance to manage the risks associated with operating in regions prone to kidnappings. Here are the primary reasons:
-
Expert Management: Insurance firms offer professional negotiation and crisis management services. These experts ensure that every step follows the best practices to retrieve hostages safely, which can be critical for a positive outcome 1.
-
Duty of Care: Having kidnap insurance helps companies fulfill their duty of care towards their employees. If a kidnap situation arises, they can demonstrate that they have taken all necessary precautions to protect their staff 2.
-
Training and Prevention: Insurance policies often include training to help employees avoid kidnapping scenarios, such as how to plan safe routes and avoid random abductions. This reduces the likelihood of opportunistic kidnappings 3.
-
Legal Protection: Failing to properly manage a kidnapping can result in lawsuits from the victim’s family for not exercising adequate care. Insurance helps companies adhere to established protocols, reducing the risk of legal repercussions 1.
-
Prevention of Market Inflation: Insurance firms help regulate ransom amounts to prevent inflation of ransom demands, which can happen if ransom payments are made too quickly or are too high. This regulation protects other potential victims from increased ransom demands in future kidnappings 4.
Overall, kidnap insurance is about planning and preparedness to ensure the best possible outcome if an abduction occurs, while also preventing such events through proactive measures 3 2.
RELATED QUESTIONS-