Kidnap & extortion expenses - ForeFront Plus
Chubb Specialty Insurance

PURPOSE: To protect organisations and employees (and their relatives) against expenses incurred in connection with a kidnapping, hijacking, wrongful detention, extortion, cyber extortion or political threat.

Key cover features
The list of expenses covered includes the cost of:

• a negotiator or consultant
• a public relations consultant
• travel and accommodation of an insured person
• legal advice
• assessment of cyber extortion by a computer network security consultant
• a reward for information leading to arrest and conviction of a perpetrator
• employment remuneration and benefits (including pension benefits) which the organisation continues to pay an employee for up to 5 years after the start of that employee’s kidnapping, hijacking or wrongful detention
• pecuniary loss which a victim sustains because he or she cannot deal with personal financial matters while kidnapping, hijacked or wrongfully detained
• medical, cosmetic, psychiatric or dental treatment for a victim
• up to thirty days’ rest and rehabilitation, including meals and recreation, taken within twelve months following a victim’s release
• recall expenses for products which are the subject of a contamination threat

Here are examples of when a company may need Kidnap and Extortion Expenses cover:

Bomb threat
A hotel group’s managing director received an anonymous letter threatening to blow up several hotels unless $1,000,000 was paid. The letter appeared to be from a radical political group. Risk consultants were retained to analyse the letter and assess the level of risk. They advised that it should be taken seriously. The company heightened the security measures at its hotels. Working with local authorities, attempts were made to contact the extortionists, which were unsuccessful. After four months, another threat was made and, again, contact was attempted. Eventually the extortionists stopped all communication and no new threats were made. Even though no extortion payment was ever made, expenses paid amounted to $50,000.

Bitter employee
Fired for poor performance, an employee with a history of violent behaviour demanded money and threatened bodily injury to his former employers if payment was not made. This verbal threat was followed by a series of letters and the company’s chairman was stalked. Security consultants were quickly called in to provide security for the chairman and deal with the extortionist. After several weeks, a meeting was arranged between the former employee and the police. The man was informed of the seriousness of his threats and their legal ramifications. As a result, he agreed to his legitimate termination pay and stopped his threatening activities. Expenses incurred amounted to more than £40,000.