Kidnap and ransom: is the risk so remote? Here is what you need to know about K & R insurance in today's dangerous world.

• Author: Ralph, JoAnn
• Position: GLOBAL BUSINESS

INDICATIONS ARE that only a fraction of kidnappings that are threatened, attempted, or successful are reported. The FBI investigates 350 to 400 domestic kidnappings annually; one-third result in the payment of ransom (with an average ransom of $2 million). Britain's Foreign Policy Center estimates kidnappers earn more than $500 million annually; investigations number 8,000 to 10,000 each year. The trouble spots are obvious destinations (Mexico, Columbia, Nigeria) as well as the less obvious (Nebraska, Montana, North Dakota). Such data should compel business owners and corporate board members to evaluate their position and take steps to prepare ... now.

As violence increases throughout the world for a myriad of reasons, businesses of all types and sizes face greater risks that employees, executives, board members, or their family members will become victims of kidnapping, extortion, detention, or retaliation. This isn't going to go away anytime soon. It is fast money, and there are incentives to attract criminals from all walks of life. Contributing factors include political unrest, extreme poverty, ineffective law enforcement, and the prospect of financial gain.

A new cause for concern involves "express" or "lightning" kidnappings, which can occur even in safe areas. In these instances, an individual is hijacked or kidnapped for a short time--long enough to make one or several maximum withdrawals from ATM machines.

Another increasing criminal trend is that referred to as "tiger" kidnapping: the abduction or holding of a hostage (or claim of having done so) with the intention of forcing an employee, a relative, or someone else to facilitate the immediate theft of any valuables or to concede some other form of ransom from an institution or business organization. European statistics indicate an alarming rise in this sort of activity, with a predominant increase in the banking and financial services sectors. Fast-food chains, retail outlets, small businesses, jewelers, and businesses considered cash-rich or those that deal in high-end goods are also targets. In these cases, it is not necessarily the executives who are at risk, but those at middle- and lower-management positions.

Although some of the incidents involve faked kidnappings, the psychological and financial impact can be considerable. There is a high degree of planning involved in these crimes, and the increased incidence makes it difficult for law enforcement to prosecute these cases. Another problem is the lack of reporting for fear of copycat cases or public relations concerns.

It's not just about money

Although money is the primary motivation, we cannot assume that it the only one. The objectives of today's crime against business include political agendas and the retaliation for a perceived offense. Such crimes can include threat or actual injury, as well as damage to products or property through contamination, use of proprietary information, theft of client credit records, or damage to a physical plant. The initial steps taken upon receipt of an extortion threat can make all the difference in ensuring the safety of employees and customers and the financial well-being of the business. Unfortunately, too many disaster plans deal primarily with information technology issues, leaving far too many other potential crises unaddressed.

Certainly within the U.S., businesses must explore the cause and effects of their own activities and the agendas of those who may seek to harm them. Whether someone is trying to gain an advantage through corporate espionage or seeking retaliation for a real or perceived personal or political wrong, the motive may be more about creating fear, gaining publicity, advancing an agenda, and damaging a company's reputation. Regardless of the motive or the cause, more than 90 percent of businesses that suffer a major disruption will go into bankruptcy if no plan has been developed or if that plan is inadequate for the times.

Sitting targets

Why is it that as a nation we are becoming better at educating our children about their safety with regard to kidnapping, but we have been lax about educating adults? Do we presume that we know what to do, or are we living in denial that we are at risk? As responsible corporations, we must consider the tools we provide our employees in the event they encounter circumstances that put their safety at risk. It may be human nature not to want to consider such a terrible ordeal, but the reality is that the risk is growing each day. As with the education of children, it is not the intent to make them fearful, but to help them feel more confident in their responses.

With no regular and accurate reporting of incidents...