“One of the things that comes with kidnap and ransom insurance is not simply
the insurance coverage but also an assessment of a family’s security risk,” says
Brian Jenkins, an expert on kidnapping and terrorism and an advisor to Rand, a
think tank in Santa Monica, Calif. “In the course of that inquiry, the family
will be told of any specific vulnerabilities.” If we agree to a security survey
and assessment, and then adopt and abide by the recommended measures, we can
often get the insurance at a reduced cost. Jenkins notes that most wealthy
individuals are “less concerned with the premium and manuscript of the policy”
than they are with the advice they receive.
| Some people with only a small risk of being kidnapped are significantly unnerved
by it; for them, the premium is money well spent. |
Solo Safeguard
Because the risk of kidnapping is fairly low, especially if
we take measures to protect ourselves, many of us are deciding to self-insure.
In other words, we set aside enough assets to cover a ransom and to pay security
specialists in the event of a kidnapping.
“For a family in the U.S. which
does not travel outside the country, [buying a policy] probably is not going to
be worth it,” says David Little, a security consultant with Sheldon Little
Associates in London, the firm that negotiated for the release of Hargrove. “If
something does happen, they probably have enough money to foot the [ransom]
themselves,” he notes. “Self-insurance can be a more efficient way of insuring,”
Greenberg agrees. “You have to weigh your ability to pay versus the cost of
coverage.”
Olivetto, the Brazilian advertising executive, took this approach
after deciding that some lifestyle changes—traveling with bodyguards, for
example—are enough to protect him. The heirs to a billion-dollar fortune in the
United States, who wish to remain anonymous, also go without the insurance
because they can afford to self-insure, a family advisor says. Most demands for
ransoms are in the $5 million to $25 million range, amounts they could easily
afford. They do take personal safety precautions: They travel by private jet;
lead low-profile lives; attempt to keep out of the top hits on Web search
engines; and they never consent to being quoted by name in the
media.
To insurers these precautions boost not only our safety,
but their bottom lines.
Additional Information
 Risk Management Tips
 Directors' Dilemma
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