The tragic slaying of two Canadian hostages in the Philippines may not have been avoided by kidnap and ransom policies, says an expert – but such coverages can still be of use in ransom situations.
Robert Hall and John Ridsdel were killed by Abu Sayyef militants – who have claimed alignment with Islamic State – on June 13 and April 25, respectively. As their kidnappers identified with a prescribed terrorist organization the Canadian government would not fulfill their ransom requirements.
In response to both killings, Prime Minister Justin Trudeau stated, “Canada cannot and will not pay ransoms to terrorists… We will not turn the maple leaf, worn with pride by over 3 million Canadians abroad, into targets.”
Canada’s rigid ransom policy has drawn criticism from those who say refusal is a moot point when a large majority of ransom cases are paid out anyway from K&R coverage or third parties. However, Sam Aiken, head of Kidnap & Ransom at JLT Group, says insurance policies are bound by similar restrictions in regard to terrorists.
“Due to sanctions, a K&R policy would be unable to pay that ransom, purely because they have aligned themselves with the Islamic State,” he says, adding such cases account for 0.5% of kidnappings. “Ironically, Abu Sayyef aligned themselves for a profit perspective rather than an ideological one. From the kidnapper’s perspective, that’s backfired because it’s illegal under international sanctions to pay them anything.”
However, he adds, policies can still be enormously useful in such hostage situations as ransom payout is just one element of K&R coverages. “A prescribed terrorist organization such as ASG would not be able to receive any cash goods or services as a ransom, but the policy will still trigger in all other areas,” he says. “A K&R policy will still respond by offering expert advice and negotiation, both at the board level and also on the ground, it will ensure you can obtain the best knowledge possible, and it would also trigger and pay for addition expenses.”
Such expenses can include flights and accommodations, pastoral and after care, as well as the salaries of the victim and those directly involved in the incident.
He adds that it’s important for expatriates and travellers visiting high-risk regions (North Africa, the Middle East, South America and Mexico remain on the top 10), connect with a specialty broker who intimately understands the risks involved.
“Speak to a specialty broker rather than a generic broker, because you need to be advised on the correct previous ransom payments,” he says. “You need to have someone who actually understands the risks in the area you wish to travel to.”
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