Planning for the Unexpected: K&R Policies

K&R Policies… Does your company have one?

 

The 'K' stands for kidnap and the 'R' stands for ransom. The term is often spoken like a code word and even in companies that have a policy in place, a very small and select group of executives and HR or Risk Management staff will be aware of its existence. It’s a benefit few companies advertise to their employees but it can be a vital one for their protection.

Reliable statistics are difficult to come by because many kidnappings are never reported but estimates for 2004 were more than 15.000 kidnappings for ransom worldwide. Paid ransoms are also difficult to determine although a ransom of USD 30m was reportedly paid in Mexico recently. The average ransom is thought to exceed USD 1m.

A K&R policy is a complicated plan outlining how the company will respond to kidnapping and ransom demands. A good policy goes beyond whether the company will cooperate and covers media and family response plans, creates a crisis management team, determines in advance how to secure funds to pay ransom, etc. The best plans cover threats from extortion to people and property as well. It is also integrated with business continuity planning, risk management and security programs.

There are very few HR and risk management professionals with extensive background in this area and its best to seek advise from firms which specialize in K&R planning and response. Beyond the policy considerations, companies must decide whether or not to insure the risk. K&R insurance policies are available through a number of specialized insurors. They cover a broad range of coverage beyond repaying ransom which a company pays out and may include extortion coverage, counseling and medical care and even liability insurance in the event the company is sued by the abducted employee’s family. The best policies provide an experienced and trained crisis coordinator. And many companies will rebate from 10-20% of the annual premiums your company pays in the form of security improvement and policy development services. The cost of the policy depends on a number of factors including office locations, number of employees, and line of business.

The kidnapping of an employee is an event few executives like to think about, but its important to make decisions about how your company will respond before it happens. Advanced planning, responding quickly, based on professional advise from an expert, and making the right choices in a highly stressful situation could be the difference between celebrating a homecoming and comforting a family in their grief.