Private security jitters $50-m heist sparks fear of insurance hike

Tweet

THE operators of some private security firms are nervous that last Thursday's multimillion-dollar heist in Kingston will lead to an increase in insurance premiums on cash they are contracted to transport.

Their concerns are driven by unconfirmed reports that the majority of the $50-million reported stolen may not have been insured.

Three of five Corporate Area insurance companies contacted by the Sunday Observer, but which asked not to be named because of the ongoing investigations into last Thursday's daring daylight robbery, said the high risk of transporting cash in anything other than an armoured vehicle in crime-plagued Jamaica made it unlikely that any insurer would be willing to offer coverage of more than $10 million in what is termed 'soft-skin' liability.

John Azar, managing director of KingAlarm, told the Sunday Observer that he spoke with two insurance companies about this sort of coverage for his company and one was willing to provide up to $7 million while the other would not go higher than $10 million.

According to a number of insurance brokers in Kingston, most insurers offer coverage for what are termed cash-in-transit transactions, with the premiums depending on whether the method of transportation is by armoured or non-armoured ('soft-skin') vehicles.

Police say that the guards emerged from the vehicle to assess the damage and found themselves staring into the barrels of guns pointed at them by men who had alighted from the Honda. The guards said they were robbed of the precious millions they had been charged with transporting to various banks as well as a .38 revolver.

The name of the security firm transporting the multimillion-dollar cargo has been kept under wraps by the police, who insist that secrecy is required in order for them to complete their investigations into the heist, the largest in the country since the start of the year.

The robbery sent shockwaves across the private security industry as firms parried criticism of their methods of transporting their clients' goods and money.

The managers of some small security companies, who had concerns about their identities being revealed, admitted that they anticipate a negative ripple effect in the industry.

"What happened has really left a number of questions, even the decision of the guards to stop and inspect the vehicle in a situation such as that one," a private security company operator said.

His communications manager agreed. "In a situation like that where the vehicle is insured, basic training dictates that one should drive to the nearest police station. Why risk life and property in a situation like that?" he asked.

The manager of a major security company in Kingston, who did not want to be named, described the method of the robbery as one of the oldest in the book.

"This does not look good. What took place is what the police warn housewives not to fall for when travelling on the road, much less professionals," said the manager who also questioned the wisdom of transporting such vast sums of money in an ordinary unarmoured car.

"There is a possibility that cash-in-transit may attract higher premiums, given what happened," an insurance company executive, who asked not to be named, admitted yesterday.

Sources within the private security industry say the type of vehicle that was being used is not normally covered under 'soft-vehicle' liability coverage.

Kenny Benjamin, chief executive officer of the Guardsman Group, feels that while the multimillion-dollar theft will spark some discussion among sector players, there is no need for panic.

"There are certainly more than 100 companies operating in Jamaica, and the incidents are few and far between," said Benjamin.

He noted however, that businesses and individuals needed to do more intensive due diligence prior to hiring a security firm.

He added that clients using local security services should reassess their contracts with these companies, as many opt for cheaper services without paying attention to whether they were getting value for money in terms of the level of professionalism being offered.

Azar agreed that panic within the sector over likely fallout from the robbery may be unwarranted.

"When you look at the number of cash-in-transit transactions being carried out every day, the reports of this incident will not cast a shadow over an industry that has a positive record," Azar said.

However, he called for more security firms to invest in training their guards.

"This incident will certainly push many companies to carry out more refresher training to keep security personnel more vigilant," Azar said.

The Police High Command, which has since assigned a special team to carry out investigations into the robbery, have been tight-lipped about developments in the case.

On Friday, investigators said they were hot on the trail of the suspected robbers. However, up until press time no new developments had been reported by the police. Investigators said the security guards, who were questioned last week, may be questioned again about the incident, if necessary.

Yesterday, the police circulated to the media photos of the types of bags that were stolen in last Thursday's robbery.

"The bags, labelled 'FRAUDSTOPPER', are the exact types which were used to carry the money which was robbed from three security guards involved in the incident," the CCN said and asked anyone who has seen the bags to call the Hunts Bay police at 926-8184 or 926-2551, or 119 or the nearest police station.

The Sunday Observer's attempts to elicit confirmation of the latest reports from the security firm whose guards were robbed have not borne fruit, as several calls to its management have not been returned.

Replicas of the money bags that were stolen in last Thursday's $50-million heist in Kingston.