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Kidnap and Ransom Insurance

Kidnap and extortion is a legitimate threat for U.S.-based businesses. Unfortunately, in many parts of the world, these illegal acts have become a business in and of themselves, with sights set on wealthy U.S. companies and business travelers.

In most cases, kidnappers take professionals captive to make a profit, releasing the individual once demands have been met. Since many overseas attacks are related to business, the need for kidnap and ransom coverage continues to grow. This is particularly true in areas where law enforcement has a blind eye to guerilla activity and in areas that are stricken by poverty. To combat financial losses in the event of a kidnap or extortion situation, Kidnap, ransom and extortion (K&R) insurance is a practical risk transfer option.

Kidnap & Ransom Insurance Coverage

Kidnap and ransom (K&R) is an insurance policy for employees engaged in international business travel. It covers costs relating to events such as:
  • Kidnap and ransom – seizing an employee with the intent to demand money in return for the employee
  • Wrongful detention – confining an employee under the guise of government
  • Extortion – demanding money with the threat to injure or kill an employee, damage property, divulge trade secrets or spread a computer virus
  • Hijacking – holding an employee for an extended period of time against his/her will on an airplane, motor vehicle or ship.
  • Custody Coverage - loss caused by actual destruction, disappearance, confiscation or unlawful taking of property which is intended as payment
Other kidnap and ransom coverages cover:
  • Accidental loss
  • Legal liability
  • Emergency political repatriation expense
  • Disappearance investigation expense
Dependent on the policy, coverage can include ransom and extortion payments, in-transit money delivery coverage, consultant costs, negotiation costs, public relations costs, interest fees coverage, judgment settlements and defense costs. Policies can also cover harm to the captive employee and the family such as death and dismemberment benefits, medical costs for injuries and psychiatric treatment after the employee is freed. Coverage is particularly helpful during times of negotiation, as experts are provided to the company to successfully free the captive employee with minimal harm.

Who Needs K&R Insurance Coverage?

It is critically important that companies with operations operating overseas carry K&R insurance to protect their traveling employees. Kidnappers do not prefer larger companies over the small ones, which means any size international company should have a comprehensive K&R policy. In this business, everyone with money is considered a good target.

The K&R coverage is particularly beneficial for employees who travel to regions of the world that are considered high risk. Countries with a consistently elevated rate of risk include Afghanistan, Brazil, Honduras, India, Mexico, Nigeria, Pakistan, Philippines, Somalia, Venezuela and South Africa.

Underwriting Considerations

The premium for this type of coverage is generally based on the following:
  • Type of industry
  • Revenue of the insured company
  • Country of residence
  • Travel patterns of the employees
At Britton Gallagher, we can assist you in designing a K&R a policy that meets your company’s specific needs. We work closely with K&R insurance carriers to ensure you have the coverage, training and support you need, when you need it most. Call us today at 216-658-7100 for more information.
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