A Guide to Kidnap and Ransom Insurance Coverage

How Your Business Might Benefit From Kidnap and Ransom Coverage

Severe risks to personal and corporate security are common in today's global economic environment. Kidnappings are difficult to predict, and when they happen, a quick, planned, and experienced response is required.

Kidnap and ransom insurance is a specialized coverage that protects against financial losses caused from threats of kidnapping, extortion, or illegal imprisonment at home or abroad.

Who Should Consider Kidnap and Ransom Insurance Coverage?

• Politicians
• People traveling abroad
• Tourists
• Entertainment companies
• Healthcare facilities
• Schools and universities with daycare facilities
• High net worth individuals and their families
• Wealthy businesspeople
• Students attending foreign universities
• Professionals traveling abroad
• Aid workers and human rights volunteers
• Journalists

Kidnapping and ransom (K&R) coverage should be considered as part of every business overall risk management strategy.

Common Coverage Found in Most Kidnap and Ransom Insurance

• Financial losses incurred because of kidnapping for ransom, extortion, illegal detention, hostage situations, and hijacking incidents - both locally and internationally.
• Medical costs of the victims.
• Most policies will give you access to security specialists who can advise you on where you can travel and how to keep safe while doing so.
• Throughout an event, policies provide financial reimbursement as well as rapid access to specialized response consultants.
• Some K&R insurance policies also cover losses incurred because of injuries, including related cosmetic surgery costs, time off work upon release, travel expenditures, and money paid to informants as a reward.
• Individuals and businesses can use risk mitigation and prevention systems.
• Most policies will offer safe travel advice and training for international hazards.

Claim Examples

A female employee in a California based business felt unsafe at work because her ex-husband threatened her and her children. The California-based company had a kidnap and ransom policy in place, which paid for a security team to protect the woman's entire workplace from her ex-husband, ensuring her and her coworkers' safety in the event of an incident.

While driving back from a business meeting in a foreign country, a company's manager was kidnapped. The kidnappers contacted the family and demanded $1 million in ransom. The family immediately contacted the police and contacted and retained the company's designated security consultant. The consultant determined that some local police officers participated in the case. The consultant’s experience and knowledge of the country allowed him to contact the superiors of the local police officers and persuaded them to negotiate the victim's quick release.

How Are K&R Premiums Determined?

The cost of a K&R policy is determined by several factors, including:

• The frequency and length of your international trips
• Travel destinations
• Coverages you choose
• Your business's industry and type of operation
• Number of employees

Coverage Limitations Can Include

• Limits can vary by insurer. Kidnapping insurance has ransom amounts and other benefits that are limited.
• If the United States has imposed sanctions on a country, such as North Korea or Iran, K&R coverage generally does not apply. Before traveling to a country where you are unsure of your coverage, contact your travel insurance provider.
• Some policies provide coverage for a specific number of days.

K&R coverage is especially important for people and businesses who travel to, or work in, high-risk countries and extreme environments. Those who are financially secure are especially vulnerable.

By purchasing Kidnap and Ransom Insurance, you gain access to immediate and practical crisis and financial assistance in threatening, dangerous situations, providing you with peace of mind. Contact your insurance agent for more information.

Leap | Carpenter | Kemps Insurance Agency Can Help

Leap/Carpenter/ Kemps Insurance Agency can help you manage these and other risks your business may have. Call our professionals today for a no-obligation business insurance review.