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More than 200 civilians from 36 countries have been kidnapped on Iraqi soil in the past year. Some of these--particularly the tragic cases that ended in grisly, videotaped beheadings--have garnered international media attention. But far more kidnap incidents are of the ransomed variety or part of mercenary kidnap-for-hire schemes.

According to Kidnapping in Iraq, a recent report by Olive Security, a London-based security consulting firm, more than 20 resistance collectives have orchestrated kidnappings in Iraq. Some are insurgent groups, but others are criminal gangs who kidnap on spec, then sell their hostages to militant groups or to the highest bidder. Some of these elements are out-of-work Iraqis drawn to crime to make ends meet. Others are leftovers from the 100,000 to 200,000 prisoners Saddam Hussein released before the United States invasion.

Obtaining kidnap and ransom coverage for operations in high-risk areas such as Iraq, nevertheless, is not as impossible as one might expect. If an insured has an effective security umbrella in place, some carriers still enthusiastically write K&R business for these areas, no matter how unstable the local government, no matter how many factions are involved in kidnap and extortion. Thus far, none of the kidnap victims in Iraq have been taken from within an active security umbrella.

According to David Lattin, director of specialty underwriting at St. Paul Travelers, an entity's umbrella is a coordinated system of formalized training, defined procedures and tactical implementation, addressing all relevant aspects of its employees' activities.

Travel is one area where a security umbrella is crucial. Olive Security reports that "77 percent of all foreigners kidnapped ... were snatched either following an armed ambush of a vehicular target traveling without armed security or as the target moved by foot from a building to their vehicle."

Hence, fairly extreme security measures are a necessity in some cases. Explains Lattin, "If you were traveling to or from a work area, it may actually be done by helicopter. They may not even allow you to go by ground transportation based upon the area and the threat. And if you do go by car, (the security protocol) may call for armed close escort teams to accompany employees as they travel. In some cases in Iraq, that is called for, particularly in the so-called Sunni Triangle where some of these incidents are taking place."

Companies seeking K&R cover for operations in extremely high-risk areas such as Iraq must have a carefully devised security plan, says Lattin, as added scrutiny will be applied during the underwriting process.

"We'll ask, 'Could you give us a flavor of how your people are working, traveling, what kind of security infrastructure are you using in Iraq?' If they come in on that application process and say, 'Gee, we hadn't thought about it,' we'll help them think about it before we'll write an exposure in Iraq because we want to make sure that they're getting it right."

September 15, 2005

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