Kidnap & Ransom, Not Just A Risk On Land

In recent weeks, the reports of increased piracy activity, specifically in the Gulf of Guinea, have raised major concerns for anyone at sea. The situation remains critical and vessels travelling through these waters have been advised to be on high alert. Should Yacht owners around the world be concerned?

With economic factors placing pressure on criminal groups to earn money in any way they can during the COVID-19 pandemic, approaches and boardings from pirates demanding ransoms are becoming more frequent than ever before. Since 11th November 2020, we have seen 6 reports of PAG (Pirate Action Group) activity. These incidents have, unfortunately, not all been immediately resolved with one event resulting in the confirmed kidnap of 14 crew and another with the abduction of 4 crew.

Kidnap and Ransom insurance is becoming a necessary form of specialist cover as violent criminal activity develops across the globe with concentration in areas such as Latin America but also extends into the maritime industry. A standalone policy gives flexibility and includes coverage (per event) across crises such as:

• Kidnap
• Extortion
• Threat
• Disappearance
• Hostage
• Express Kidnap
• Extortion
• Hijack
• Detention
  

The bespoke part of the policy comes when you wish to add on more coverage for crises you may be faced with, such as:

• Assault
• Stalking
• Tiger Kidnap (read about this on our next article)
• Emergency Evacuation
  

Although many assume that tankers or cargo ships, due to their slow speed and manoeuvrability, are the only targets for armed pirates, superyachts with their vast size and slower speeds are not dissimilar to a product carrier. These reasons, coupled with a lower freeboard in comparison to a cargo ship, a swim deck for easy access and the unlikelihood of a citadel means they present themselves as easy targets. Not to mention their capacity to accommodate a number of important people, mostly family members and often with a majority being High Net Worth or High Profile.

Product carriers backed by multi-million pound companies create the opportunity for a drawn out kidnap where crew members are taken away from the ship and held until the ransom demanded (which can be in the millions) is settled. Superyachts, on the other hand, could be susceptible to scenarios such as an Express Kidnap, which could over in a matter of minutes.

The goal of the criminal is they take as much as possible in the shortest length of time so you are likely to remain onboard during the incident. The bigger the yacht, generally, the more opportunity for valuables being taken. Armed criminals could board and hold private individuals, crew and any on-board security hostage on the condition that a release occurs if their valuable demands are met. Individuals may be forced to extract money and valuables from safes around the yacht. The criminals might destroy or temporarily disable the transmission to give them more chance to escape without apprehension. Within an hour, the event could be over.

How insurance will react in this instance

Your Kidnap and Ransom insurance policy can provide coverage on the following; the ransom, the provision of response consultants, extra expenses and if an accidental death and disability arose from the event then this could also be covered.

Traditional Kidnap and Ransom example on a superyacht

This type of attack is likely to be carefully planned. If you own or charter a superyacht, it is clear to the perpetrators that the guests will have access to large amounts of money (cash or in the bank) or other liquid assets. The planned attack could consist of a significant other being kidnapped and taken away from the superyacht. Following this, a ransom is likely to be demanded.

How insurance will react in this instance

During the event, your policy will provide unlimited access to crisis consultants who help to mitigate harm to the kidnapped individual and negotiate the demands of the criminals. Also, you are covered for the ransom, a ransom in transit, legal liability and temporary security costs. Following the event, you can also receive covered psychological rehabilitation.

Kidnap and Ransom insurance is the only insurance we arrange that protects a life over an asset.

Specifically, Kidnap and Ransom insurance for yacht owners and yacht crew is one of the most overlooked insurance policies in the industry. With yachts being some of the most expensive assets in the world it isn’t difficult for Organised Criminal Gangs (OCGs) to detect and target yachts and the people on board.

You may be able to add Kidnap and Ransom insurance to your Protection & Indemnity policy however this does not provide adequate protection whereas a stand alone Kidnap and Ransom policy from one of our market leading providers does.

Protect your life, your family and your crew first, an asset can be replaced at any time but a human life cannot.

Please contact me directly to discuss how Kidnap and Ransom insurance can protect you and provide peace of mind as you travel around the world, even in the most hostile environments.