Why we sometimes recommend against insurance
One of the services we perform is the occasional transport of people with things that are compact and valuable. By valuable we mean anywhere from fifty million dollars through three hundred million dollars. When moving items of this value – and usually the principals accompanying the items – we often recommend against getting insurance. Now, at first blush it seems that not insuring something of this value is an obvious failure to exercise due diligence. As it turns out, this is not necessarily the case.
In moving items of this value several things are critical. First, it is ideally done with great security: We need to be able to withstand any attack that might be made. Second, it is even more ideally done with great secrecy: We don’t want the bad guys to know about it, thus preventing them from being able to even consider attacking us in the first place.
If we insure these items, the insurance can be very expensive. This is largely because they are such tempting targets that the risk is, by definition, very high. The cost, however, is not a factor, as it pales in comparison to the value of the items. More to the point, the insurance companies tend to be very picky about the transport, and, like journalists, not unreasonably tend to want a good deal of information about the who, what, where, when, why, and how.
Unfortunately, the information they need is exactly the information the bad guys need to rob us. Now, imagine you work for an insurance company, and someone offers you several years’ pay for a little information. Might you be the teeniest bit tempted? After all, it is a lot of money, and it is insured….
Does this mean we think that insurance companies willingly give this kind of information away? Or that we think employees of insurance companies are particularly bribable? Not in the least. It merely means that there are many places where someone will take a life for five dollars, and that for a hundred million dollars some people will put a lot of time, effort, and money (including bribing and threatening to get information) into trying to take away your property. And probably your life in the process.
Because of this it is often a greater guarantor of security to take the money that would have been spent on insurance and use it to buy greater secrecy and security, thus increasing the likelihood of success.