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| Risk & Reward |
Insuring Our Personal Security
Rebecca Fannin
04/01/2004
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TERRORISM COVER
Apart from kidnapping insurance, some of us who have valuable art
collections or other irreplaceable items are beginning to consider terrorism
insurance. This is, essentially, an additional clause in our property and
casualty policies, designed to insure valuables against terrorism-related
losses, such as the destruction of a museum to which we may have lent our
collection. However, these policies are typically tailored for corporations, not
individuals, and the premiums are “sky-high,” says Brian Jenkins, a security
consultant with Rand. Insurers have paid out billions to cover losses from the
World Trade Center attacks (including claims for several valuable art
collections destroyed in the towers), and they are pricing their new terrorism
policies accordingly. |
Washington Olivetto, a well-known and successful Brazilian advertising
executive, was leaving his office in Sao Paulo on December 11, 2002, when a
group of armed men dressed in police uniforms surrounded him and whisked him
into a van. They tied him up and held him captive in a nearby suburban house for
nearly two months. The kidnappers had plotted the abduction since accounts of
Olivetto’s business successes had appeared in the local press a year
earlier.
Worried sick, Olivetto’s family and business partners called in
Controlled Risks Group, a London-based firm that specializes in crisis and risk
management, to negotiate with the captors. They were prepared to hand over the
$10 million ransom, which they had at their disposal courtesy of Lloyd’s of
London, where Olivetto had a kidnap and ransom insurance policy (known as a
K&R policy in industry parlance). But a few days before the exchange was to
take place, the kidnappers, who were associated with a Chilean left-wing
faction, fled the house after hearing that members of their group had been
arrested on other charges. Realizing there had been no sounds coming from the
adjoining room for several hours, Olivetto began pounding on a wall and yelling
for help. Neighbors heard his cries and came to the rescue.
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