Kidnap and ransom insurance

kidnap insuranceOne of the more special insurances are kidnap and ransom insurance, also called K&R insurance. Have you ever thought about how ransoms of up to millions of dollars are paid? Read on about this rather unknown insurance.

Kidnap and ransom insurance is a type of travel insurance that serves as a protection for corporations against unexpected financial losses resulting from kidnapping, extortion and ransom demands of their employees. Although this policy is also offered to high profile individuals, tourists and their family members, most companies who are operating on kidnap prone areas purchase this type of insurance for their employees who represent their behalf. Kidnap and ransom insurance is not a popular policy in the previous years but recently, there were a lot of kidnapping incidents around the world thus, kidnap and ransom insurance is made available.

What is the purpose of kidnap and ransom insurance?

A kidnap and ransom insurance is a highly specialized travel insurance that focuses on providing assistance and funds to insured victims, in order to navigate the problem and meet the kidnapper’s demand. Individuals who have this kind of policy should not let anyone know, including their family members who are covered as well. Kidnappers are keen to individuals with such policies as they can easily arrange a kidnapping incident in a short span of time. Therefore, it is advised to keep mum on having this kind of insurance to ensure safety and make the policy readily available in case kidnapping takes place.

Nevertheless, most kidnap and ransom insurance policies have other coverages for financial loss protection. This includes a commercial liability coverage which covers the worker’s compensation, political risks like embargo and confiscation, auto liability, as well as medical related expenses.

Who needs a kidnap and ransom insurance?

The kidnap and ransom insurance is not an affordable policy to start with. The amount of coverage that most insurance companies provide is huge, considering the varied demands of kidnapers and the needs of the victim after the incident. This is why, kidnap and ransom insurance should be obtained by employers who have employees travelling frequently from the different areas of the world, especially on places where kidnapping is common. Employees who are covered by a kidnap and ransom insurance often also participate in a HEAT course before being deployed and may have guards or other kind of protections.

High profile executives or even those regular employees who are assigned on high risk areas should be covered by the kidnap and ransom insurance. Foreign workers who are mostly at risk for theft, robbery and forgery of overseas corporate assets should have their own policy as well. Having a kidnap and ransom insurance policy is the best way for corporations to protect their companies from financial losses due to extortion and kidnapping.

How much does it cost to have a kidnap and ransom insurance?

The cost for a kidnap and ransom insurance varies on several factors like the number of employees, countries of destination and chosen benefits or coverage. Every company who sends a high profile employee abroad should consider this kind of insurance in order to protect their selves financially and ensure that their assets are preserved even if a kidnapping incident took place. It is also important to understand the insurance policy in the first place because some companies do not compensate or cover kidnap and ransom incidences unless proven true and reliable.