Sponsored: Great American Insurance Group

3 Kidnap & Ransom Risks Frequently Overlooked by U.S. Companies

Crisis response services included with K&R coverage prove essential when domestic companies face these unexpected threats.
By: | January 29, 2019 • 6 min read

Few companies would list kidnap and ransom as one of their greatest business risks — especially smaller U.S. companies with little foreign exposure. Many people tend to perceive kidnapping as a threat primarily to employees traveling abroad. While large companies with foreign subsidiaries or traveling workforces may be at greater risk, neighborhood “mom and pop” shops are not immune.

“When people think of kidnap and ransom, they tend to think of kidnap exclusively. There’s a misperception if you don’t have any employees traveling overseas, then you don’t need this coverage. The exposure is much broader than people realize,” said Melissa Person, Divisional Assistant Vice President, Fidelity/Crime, Great American Insurance Group. “Domestic companies are still susceptible to this risk.”

Specifically, here are three frequently overlooked ways domestic companies are exposed to kidnap and ransom risk:

1. Any company is vulnerable to threats of violence.

Melissa Person, Divisional Assistant Vice President, Fidelity/Crime, Great American Insurance Group

Perhaps the greatest, but most frequently overlooked risk facing companies is an active threat to the health and safety of employees, regardless of any extortion attempt.

“This can include a bomb threat made via a phone call or letter, an angry post to a company’s Facebook page, or an offhand comment made by a disgruntled employee,” Person said.

“Perhaps an employee who’s just been let go or passed over for a promotion makes violent threats against their boss, or makes references to violent acts or weapons. It gets back to management, who starts to feel uneasy about a potential workplace shooting situation.”

If a threat is serious enough to shut down an insured’s operations, loss of earnings during this period could apply.

Social media magnifies this exposure significantly.

“People tend to be more aggressive online when there is no face-to-face interaction and they can remain anonymous,” Person said. Social media channels also provide a direct and highly public conduit to a company. Making threats over social media make it more likely the company will respond than if the message is sent via email or a generic feedback form.

2. U.S. manufacturers are prime targets for product extortion.

Extortionists use threats to extract payments from their victims. While a threat can take many forms, including physical or reputational harm, product contamination threats are particularly serious for manufacturers.

“In the case of product extortion, the perpetrator threatens to introduce a contaminant into the target company’s product, either during the manufacturing process, or by tampering with finished goods, rendering their inventory useless or even dangerous. Unless, they receive their ransom demand,” Person said.

Any product that may be ingested or come in contact with skin can pose a serious safety threat to consumers if contaminated. Manufacturers of foods and beverages, household cleaning products, and over-the-counter medications are all vulnerable.

“Any company manufacturing a product here in the U.S. has that type of exposure,” Person said.

3. Facilities with public access are common sites of child abductions.

“One scenario where child abduction can occur is when a non-custodial parent takes off with his or her child while in the midst of a domestic dispute with the other parent,” Person said. These abductors can easily exploit crowded spaces or moments of inattention from the custodial parent to commit their crime.

This is a particular concern for daycares, schools and hospitals where children are more likely to be separated from their primary custodians. Because these facilities are also responsible for the safety of children in their care, they may be held liable for the event and face accusations of negligence.

Any establishment with public access, however, offers a venue for an abduction to take place. Retail stores, amusement parks, movie theaters and the like are all exposed to abduction risk.

Why Crisis Response Resources are Critical

When faced with an attempt at extortion or threats of outright violence, most businesses are not sure what steps to take. How do they gauge the validity and seriousness of the threat? How do they respond? How do they protect customers, employees, executives and their families from harm? Failing to appreciate exposure to these events and prepare an appropriate response could leave companies in a state of crisis, should a threat come their way.

“What many domestic companies don’t realize is a kidnap and ransom insurance policy is not just there to reimburse financial losses associated with ransom payments; it also affords access to crisis consultants who can answer many of these questions and perhaps avoid a dangerous situation altogether,” Person said.

Great American Insurance Group works with Control Risks, a recognized leader in crisis response whose experts come from backgrounds in law, cyber security, technology services, academia, law enforcement, intelligence services and the military. With more than 35 offices worldwide, its consultants can be deployed globally to help companies contend with extortion, kidnapping or violent threats.

If, for example, a disgruntled employee writes an angry post about his company’s CEO on social media, alongside a photo of his gun collection, a crisis specialist would evaluate the seriousness of the threat and recommend an appropriate course of action. It may be best to do nothing, adjust security procedures around entering and exiting the premises, or add security personnel to patrol the facility or guard the CEO and his or her family. Crisis consultants can also assist during negotiations with the person making the threat, which may help mitigate the potential of any physical harm.

“Certain expenses associated with those response measures would be covered under our threat response endorsement. As long as the threat remains viable according to Control Risks’ consultants, a policy may pay fees for the extra security necessary to reduce the risk of it actually being carried out,” Person said. Our Great American Kidnap, Ransom & Extortion Policy® also covers Control Risks’ services in just about any country.

Any company can, of course, secure independent consultants on their own, but it may be cost prohibitive. Offered as a benefit of a kidnap and ransom policy, these resources become much more accessible, affordable and prudent to utilize.

“That is the primary benefit of this coverage more so than indemnity. Kidnap, ransom, extortion and other threats are frightening experiences, and Control Risks does a great job of responding to the event and helping companies make decisions through this process,” Person said.

With limits up to $65 million available, Great American also has the capacity to handle high-risk exposures, and can tailor coverage to meet the specific needs of both corporations and individuals.

To learn more about Great American’s Kidnap, Ransom and Extortion coverage and services, visit https://www.greatamericaninsurancegroup.com/for-businesses/product-details/fidelity-crime/kidnap-ransom-and-extortion-usa.

Great American Insurance Group, 301 E. Fourth St., Cincinnati, OH 45202. Policies are underwritten by Great American Insurance Company, Great American Assurance Company, Great American Alliance Insurance Company, Great American Insurance Company of New York, Great American Security Insurance Company, and Great American Spirit Insurance Company, authorized insurers in all 50 states and the DC.



This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Great American Insurance Group. The editorial staff of Risk & Insurance had no role in its preparation.

Great American’s innovative insurance solutions and specialization serves niche marketplaces that we know well, giving us a successful foundation that spans generations.

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]