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
- Communication
- Media relations
- Response
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.
Employers beware.
MATT KELLY is in HRH’s Risk Mitigation Group in Philadelphia.
Reach him at (610) 260-4339 or [email protected].
MICHAEL GIGLIOTTI is in HRH’s Tampa office. Reach him at
(813) 261-7969 or [email protected].