Last year, the U.S. Department of State issued another warning to U.S. citizens about the risk of traveling in Mexico due to threats to safety and security—including kidnapping. The statement reported that the number of kidnappings throughout Mexico is of particular concern and appears to be on the rise, increasing more than 30% over the previous year.

Businesses should think hard about what risk mitigation measures they should put in place for workers in areas considered risky and what they can do to protect their employees. And independent agents have an opportunity to educate their commercial clients—especially those with global footprints—about the necessity of protecting against these risks as they consider their total insurance coverage package. Employees are the most valuable asset of most businesses, which makes their safety paramount.

This is especially true for companies that conduct business in countries that might be gripped by political or economic instability or in areas susceptible to attacks by criminal or political groups. It is not uncommon for such criminal organizations to target foreign companies to achieve economic gains. Recent examples include a situation in late 2013 where two U.S. citizens were kidnapped from an oilfield supply ship off Nigeria’s coast and held for nearly a month. Similarly, a Dutch marketing consultant was abducted in South Africa and returned home safely only after his company paid for his release.

But kidnap and ransom exposures are not limited to companies that operate overseas. Several types of coercion are more common in the U.S. The right insurance coverage is also available to protect against these risks.

Businesses with strong brand name recognition, recent layoffs, changes in policies or affiliation with other vendors or nonprofit organizations can be targets for threat or extortion. And these threats do not always come in the form of ransom demands. In some cases, nefarious individuals or organizations may try to halt a company’s production or instill fear in its employees.

Most kidnap & ransom (K&R) insurance policies serve two main purposes:

• To financially reimburse companies for certain defined losses that they sustained from an insured event (including kidnapping, extortion, hijacking and illegal detention)
• To provide priority access to highly experienced crisis response consultants, who offer invaluable advice to clients during an incident

Relatively inexpensive, K&R policies offer an opportunity for agents to provide their customers with broad terms and coverages and transfer certain risks of doing business overseas—instilling peace of mind about their employees and financial stability of their clients. Whether a company is about to sign its first overseas customer or already has a sophisticated network of international suppliers or offices in place, the need for such policies is universal. 

Talk to your customers today about the best way to protect their businesses from these growing risks.

Khamla Vorasane is K&R underwriting director at Travelers.