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WHY K&R INSURANCE?
When your company conducts business overseas you are prepared for language barriers, exotic customs and diverse negotiating styles. What you cannot predict, however, is political upheaval and the increased danger of abduction and extortion. Kidnap for ransom is a real threat in many parts of the world, and global corporations have a duty of care to their local, traveling and expatriate staff.
An organization dealing with an incident faces potential losses from ransom payments, business interruption, litigation, adverse publicity and long-term damage to reputation. Protecting your organizations and your people conducting business globally is therefore more critical than ever.
Kidnap & Ransom (K&R) Insurance provides coverage for kidnap, ransom, extortion and other crisis events such as hijacking, wrongful detention, threat, disappearance, hostage crisis, child abduction, assault and workplace violence.
The policy reimburses all expenses reasonably incurred by the insured in connection with a valid claim. The limits of coverage depend on the insured’s size, profile, exposures, assets, perception of risk and risk appetite.
The rating of the risk depends on various factors including the insured’s business, number of persons insured, location of persons insured, frequency and duration of travel, size of assets, security and details of any previous threats or incidents.
WHAT YOU NEED TO KNOW
What is K&R Insurance?
Kidnap and ransom insurance protects individuals and businesses at a high risk of being kidnapped. It typically covers losses related to kidnapping, disappearance of an insured person, wrongful detention, security evacuations, stalking, hijackings, hostage situations, workplace violence, child abductions, evacuation and repatriation. Threats to kill, injure, or destroy property or divulge confidential or proprietary information in exchange for a ransom is also a covered peril on most kidnapping insurance policies.
Who Needs K&R Insurance?
Who might need this coverage? Any business or individual who frequently travels to dangerous areas around the world including high net-worth individuals (business executives, CEOs, billionaires, etc.), famous people (celebrities, musicians, athletes), individuals travelling outside their country (travellers, journalists, aid workers), universities/international programs, organizations to protect their key employees, nonprofit organizations and healthcare facilities
How Does K&R Insurance Work?
If you are the individual or organization dealing with the crisis, only contact your insurance company once it is safe for you to do so. Most insurers recognize that the threatened person/businesses are often warned not to reach out to authorities, so most companies allow this clause. Once your insurance company is aware of the kidnapping, they deploy a security consultant, negotiator, and crisis response team to help guide you through the operations. K&R policies still require you to pay the initial ransom (or take out a loan to do so) and you are reimbursed up to your policy limits. It will also cover the interest on loans. If the ransom amount requested exceeds your policy limits, you are responsible for the extra amount. Your K&R insurance policy will also help handle public relations if the incident is high-profile.
How Much Does K&R Coverage Cost?
The rating for K&R Insurance varies from one individual or organization to the other depending on these factors - How many family members/employees are covered under the policy, the areas your employees travel to around the world, the risks you or your business faces and benefit amount/limits of the policy.
What is Excluded From Kidnap/Ransom Insurance?
If you travel to a country that is deemed unsafe and has a high risk of kidnapping, it may not be covered. Likewise, countries with political sanctions against may be excluded from coverage. Even worse, if it's found that you talked about the insurance, they could opt to not pay your ransom. If that happens, your business or family could be left in financial ruin.