Kidnap and Ransom Insurance
An International Industry
Kidnapping for ransom is big business with an estimated 15,000 kidnaps for ransom each year and annual ransom payments estimated at over half a billion dollars. Kidnap and Ransom (K&R) Insurance should always be considered if you or any employee may be exposed.
Kidnap for ransom is also a global business with Central and South America the biggest single area. However, the industry’s customer base extends across Latin America and the Caribbean, Africa particularly northern parts, Eastern Europe and the Middle East, via parts of India and Pakistan to Central and South East Asia. There are even reported incidents in Western Europe and North America.
K&R policies are indemnity policies – they reimburse a loss incurred by the insured. The policies do not pay ransoms on the behalf of the insured. The insured must first pay the ransom, thus incurring the loss, and then seek reimbursement under the policy. Losses typically reimbursed by K&R polices are ransom payments, loss-of-ransom-in-transit and additional expenses, such as medical expenses.
The policies also typically indemnify personal accident losses caused by a kidnap. These include death, dismemberment, and permanent total disablement of a kidnapped person. They also typically pay for the fees and expenses of crisis management consultants. These consultants provide advice to the insured on how to best respond to the incident.
The policies may be written to cover families and corporations. Some policies include kidnap prevention training.
Who is it for?
Extortionists don’t discriminate. Any company of any size can be a target for extortion threats against the company and its employees. People tend to associate business extortion and kidnapping with global companies. The fact is, radical groups and criminals exist everywhere.
Our clients range from small firms through to multinational companies operating in high risk regions of the world, key executives working in commercially sensitive positions and individuals whose wealth or fame may attract the attention of criminals. The simple fact that you are from a western country can make you susceptible to kidnap and extortion attempts.
Rowlands & Hames can also provide worldwide travel insurance insurance to the Kidnap insurance should persons fall ill during their trips.
|Crisis consultants fees and expenses||Ideally no time limit, financial limit or deductible for consultants’ fees. The priority is the safe return of the victim and the specialist tactical advice and guidance of the consultants is essential to achieve this.|
|Ransom money||Ransom may be cash, securities or property. Cover is also usually provided in case the ransom is lost, destroyed or confiscated while it is being delivered.|
|Forensic analysis, extra security, reward money for information||Expert services and financial resources to minimise or remove the threat of extortion.|
|PR and communication||Public Relations fees and expenses to ensure professional and consistent communication with the pres during the crisis.|
|Up to 5 years salary costs||Victim’s salary while in capacity and of relatives who leave their jobs to assist with negotiations. Includes pension contributions, average bonuses etc.|
|Medical and rehabilitation costs||Medical costs, not only for the victim but anyone involved in the handling or negotiation of the crisis. Includes psychological and neurological treatment, counselling or cosmetic surgery.|
|Financial loss caused by inability to attend to finances||Such as failing to renew insurance contracts, exercise share options or meet mortgage and loan payments while in captivity.|
|Business interruption||Consequential loss of profit suffered by the business as a direct result of the kidnapping or extortion event (e.g. trading activities affected in a particular jurisdiction.)|
|Job retraining||The traumatic experience of being a victim may necessitate an adaptation to, or complete change of job after release. Cover may include retraining costs for victims (e.g. external training courses) to facilitate this.|
|Subsequent legal action||Protection for the company in case any action is brought against the company or an insured person because of the kidnapping, extortion or wrongful detention.|
How Rowlands & Hames can assist you…
If any Director or Employee (and perhaps their families) is considering travelling to any country considered ‘at risk’ please ask Rowlands & Hames to obtain an indication of premium. A full proposal form will be required to finalise the premium and terms but indications can be provided relatively quickly.
Please contact Rowlands & Hames for further information.
You should be aware that due to the nature of the product it is essential that knowledge of the existence of such insurance is kept to the minimum number of persons.
You may also wish to consider Travel Insurance in conjunction with K&R cover.
To discuss your requirements and seek a quotation please contact