What is Kidnap and Ransom Insurance

The 1990s gave Americans a new word to define.  That word was “outsource”.  To outsource meant to send away or abroad.  As in American corporations decided to outsource jobs to Mexico and overseas.  Yes, outsourcing opened up a global job market.  Outsourcing introduced the possibilites for someone to work and to travel simultaneously for the same company.

But, that luxury came with a specific danger. 

Over the last decade, hundreds of company executives had been kidnapped.  Many of the victims were later freed after their companies paid huge ransoms to the kidnappers.  These monies later went for recruitment, arms or drugs.  Those committing these heinous crimes were among the following:

1) Paramilitary organizations (ie: FARC/Colombia)

2) Drug cartels or gangs (Latin America: preferrably Central America, Mexico and Colombia)

3) Muslim extremists (Middle East, Chechnya, Southeast Asia)

The kidnappings were so costly that insurance companies implemented a “kidnap and ransom” policy on their clients.  Multinational corporations such as British Petroleum put aside monies for this policy.  They had the net worth to buy a small nation.  Kidnappers knew that.  It was nothing for BP to send $5 mill in a wire transfer to free one of their CEOs.  And $5 mill for a Third World, guerrilla group meant the world to them.  They bought weapons from arms dealers.  They purchased drugs from drug cartels to sell for themselves.  They recruited more members with that money.

Companies realized that “kidnap and ransom” insurance was vital.  Without, there was no need to expand into Mexico, Latin America, the Middle East or Southeast Asia.  They risked losing their top executives to murder if the ransoms weren’t paid.  Major corporations were powerful to stop kidnapping gangs from taking their officials.  But, a few decided to solve their dilemma with extreme measures.

During the Iraqi invasion of 2003, the phrase “civilian contractor” came into fold.  Some companies hired off-duty or discharged soldiers, ex-cops and even ex-mercernaries to protect their executives. They were also called “private security”.  They had the weapons and appearance of military or paramilitary.  But, most lacked the discipline and ethics associated with U.S. Armed Forces.

Some of these civilian contractors fell victim to Al Qaeda terrorists.  One was actually beheaded by Abu Zaraqwi on a Youtube video.  Others committed atrocities against civilians.  Civilian contractors served a purpose.  They protected their companies’ executives.  Nonetheless, they were a “necessary evil”.

In early 2010, Mexico’s rising drug violence intensified more fears of kidnappings.  The number of victims skyrocketed as the Sinola, Zetas, Juarez and Gulf criminal organizations continued their turf wars.  A couple was shot at by pirates (with alleged ties to the drug cartels) the Falcon Lake border.  The husband was shot dead.  His body wasn’t recovered.

That tragedy and others weren’t prevented by insurance.


Yahoo News


Marcus Brooks: Falcon Lake article on Helium