The phone rings. A startled woman awakes from a sound sleep. She immediately looks at the clock. It is 2:52 a.m. The caller speaks broken English. She is confused and unclear regarding the caller’s intent. Her thought is to hang up the phone. The phone goes momentarily silent. She then hears her husband’s voice informing her he has been taken from his hotel room and will not be released until the caller’s demands are met. Her heart begins to race, her voice is quivering, and she can only say, “Are you OK?”
The unknown caller’s voice returns, making a monetary demand, or else. Do not notify the authorities. Another call will be initiated in one hour. The phone goes dead. Her husband, working in Columbia, has been kidnapped. As a buyer for a wholesale distributor, he travels throughout South America meeting with suppliers.
His wife is unsure what to do next. She immediately thinks of contacting his employer but has no idea whom to contact at this hour in the morning. Even after the employer is contacted, the employer is just as uncertain as she is as to how to proceed. The company’s risk manager remembers placing Special Risk coverage (Kidnap, Ransom & Extortion Cover) but can’t even locate the policy in the binder. The employee’s wife and children are in a state of shock and fear for his well-being.
This is just one example of how our evolving work environment has created emerging risks impacting employee safety.
Smart Business spoke to Matt Kelly of the Hilb, Rogal & Hobbs Risk Mitigation Group in Philadelphia about how globalization has impacted businesses of all sizes.
Should every employer consider the value of written crisis management plans?
Every employer should have a crisis management plan and should educate employees on various risks and how the crisis management plan would respond to those risks. Every employer should periodically test the crisis management plan.
Every business manages multiple operational crises every day. What we are focusing on are those that can jeopardize the safety and security of employees. Too often organizations want to address a specific risk but lack a fundamental crisis management plan. One of the best examples was the recent threat of the bird flu virus. All of a sudden everyone wanted to prepare for the bird flu.
Unfortunately, without a crisis management or business continuity plan it is difficult and ineffective to develop a plan to just manage a specific threat. Many employers’ reactive versus proactive approach is easily identified when we hear the following responses. Where do you begin? Who has the time to produce such a document? How much will it cost? Who will maintain its content to keep it a static document? These questions are all valid points unless crisis management is viewed as an integral component of protecting the company assets.
Conversely, if an employer has an existing plan in place, specific risks can be easily integrated into the overall crisis management plan.
A basic crisis management plan sets in place certain key protocols including:
- Business continuity
- Media relations
What are the related insurance issues that are emerging?
Every employer should recognize when placing kidnap, ransom and extortion policies and, in some cases, workplace violence policies, that the insurance carrier is an important consideration in addition to the crisis management/negotiating firm that represents the insurance carrier. Control Risk Group (CRG), The Ackerman Group and Clayton Consultants Inc. are just a few examples of crisis management firms that represent some of the largest insurance carriers within this insurance placement. In the event an incident occurs, this is who you are buying.
Too often employers also do not recognize the growing threat of online extortion. Policyholders should make sure the coverage includes electronic extortion. For example, if a company who maintains credit card information is the victim of unauthorized access, a monetary demand may be made. Companies must recognize the kidnap, ransom and extortion policy should also extend to cover this potential loss.
More and more we hear on the news of another event involving workplace violence. The Department of Justice estimates workplace violence accounts for 18 percent of all violent crime. The threat of a disgruntled employee is one that every employer, regardless of the industry, should take very seriously.
In general, workplace violence insurance is designed to cover expenses including, but not limited to, counseling fees, medical bills, increased security, legal fees, property damage and liability.
MATT KELLY is in HRH’s Risk Mitigation Group in Philadelphia.
Reach him at (610) 260-4339 or Matt.Kelly@hrh.com.
MICHAEL GIGLIOTTI is in HRH’s Tampa office. Reach him at (813) 261-7969 or Michael.Gigliotti@hrh.com.