Employers owe a duty of care to their employees,  and how far this duty extends in order to ensure the  safety of individuals is brought sharply into focus  when employees of a business find themselves  victims of a kidnap event.

As the kidnap landscape continues  to evolve and global businesses  particularly in the mining and  engineering fields seek to develop  new revenue streams by entering  potentially hostile areas, owners face  an unenviable task of ensuring their  business assets and employees are  suitably protected against such risks as  kidnap, extortion, hijack and detention,  whilst operating in high-risk locations. 

Employers will want to give careful  thought to the areas in which  employees are expected to operate  or travel, and consider adequate  education and training to personnel  regarding both personal and  commercial security. A range of  response consultants and security  companies offer training on threat  avoidance and evasion.

Despite such steps, kidnap incidents  can and do occur, whether at the  workplace, travelling to or from it,  or remotely. In such circumstances,  conventional commercial businesses  are increasingly relying on kidnap and  ransom insurance to offer protection  and failing to have such cover may  well result in litigation from families of  those held. 

Litigation by insured persons

When an event occurs, even where  businesses have purchased kidnap and  ransom insurance, they are finding  themselves recipients of lawsuits.  It is often argued that legal liability  for such litigation and associated  legal costs are provided for under a  standard kidnap and ransom cover.  Thus, kidnap and ransom insurers are  finding their policies have a longer tail  and a greater exposure than perhaps  first anticipated.

Such situations are not uncommon.  For example, In 2011, an American aid  worker, Flavia Wagner, filed a claim  against Samaritan’s Purse, a North  Carolina-based charity group who  sent her to the Abu Ajura region in  Darfur, where she was kidnapped and  spent 3 months in captivity. Wagner  claimed that the charity failed to train  its security personnel adequately  and further failed to act on warning  signs that indicated a growing threat  of kidnap. Clayton Consultants, a  crisis-management consulting firm  appointed by Samaritan’s Purse to  negotiate her release, was also sued.

In another incident, litigation was  commenced against the owner of a  pipe-laying barge from which a number  of employees were kidnapped by  militants and detained whilst operating  in the Niger Delta. The employees, who  were released after a few weeks, alleged  that the employer had failed to provide  adequate security briefing.

Claims may also arise out of marine  hijack where vessels are attacked by  pirates for ransom. In 2012, some of  the crew members aboard the hijacked  Maersk Alabama, which was made  famous by the success of the film Captain Philips, commenced legal  action against the vessel’s charterer.  The crew members argue that  multiple piracy warnings were ignored  and the vessel wilfully sailed across an  area of known Somali piracy activity,  without adequate counter-measures or  defence mechanisms in place.

Similar law suits by crew members  of other hijacked vessels have been  intimated or pursued.

Although in our experience claims in  America have led the way, more recently  we have been instructed in relation  to such suits in Europe, apparently  reflecting an increasing trend. 

In our view a liability claim arising  from a kidnap event is more likely  to arise when the kidnap situation  is badly managed and becomes  prolonged, and the involvement of  good quality response consultants  through a kidnap and ransom policy  should reduce this risk. Indeed a  kidnap and ransom policy may only  cover legal liability and costs in such  circumstances. 

Further, a potential claim is certainly  a concern where the victim is  unfortunately killed or physically and  emotionally maltreated. However,  even where a safe release is achieved,  a claim may arise if, for example,  no adequate post-release briefing and/ or care is provided, leading to a sense  of abandonment and feelings  of resentment. 

Kidnap and ransom insurers will wish  to encourage their insureds to use  the cover under their policy relating  to rest and rehabilitation of victims,  which typically includes psychological  counselling and time away, as well as  other potential benefits, rather than  risk an expensive law suit.

Any litigation can be expensive for  a business, and suits arising out of  a kidnap event are no exception.  Where cover is available kidnap and  ransom insurers usually have the  right to appoint lawyers and control such proceedings, indeed it is possible  to nominate lawyers prior to an  incident, as is common in the cyber  or professional lines arena, to ensure  that any such claims are dealt with  swiftly, and if possible prior to legal  proceedings being commenced. 

Where suits are brought by local  employees, it is also important to  bear in mind the different limitation  periods that may apply. In certain  countries, claims against employers  can have an exceptionally long  limitation period, in which case  businesses could be faced with a claim  many years after the kidnap incident  has concluded. 

Minimising the risk of litigation

As a kidnap event is a traumatic  experience for all involved, there  is always a risk of litigation being  commenced by insured person(s) or  their families who feel dissatisfied  with the business’s handling of the  kidnap situation.

Nevertheless, one of the best ways  to minimise the risk of litigation is to  ensure that the kidnap and ransom  insurance provides for a high quality  specialist response consultant service.  Access to such a service is usually one of  the primary motivations for businesses  to seek kidnap and ransom cover. 

Where the negotiations for release  become prolonged, the risk  consultant’s fees and expenses could  be substantial, especially where  such fees are often unlimited and  payable directly to the risk consultant  by the insurer. In the long term,  however, offering a high quality  response service would ensure a more  satisfactory outcome and ultimately  reduce the likelihood of a suit from  insured persons and legal costs  involved. This should be an incentive  for all kidnap and ransom insurers  to ensure the quality of the response  consultants they appoint and/or  nominate under the policy