Many businesses, organisations and families that are exposed to the threat of kidnap, ransom and extortion can seek to protect themselves financially against these threats with kidnap and ransom insurance but what cover does kidnap and ransom insurance provide and what additional benefits can it provide to the policyholder?
Who needs kidnap and ransom insurance?
There is a wide range of organisations and businesses that exposed to the risk of kidnap and extortion including;
- Global corporations with foreign assets
- Businesses with travelling employees
- Financial institutions
- Oil and gas companies
- Companies with high-value propriety information
- high profile domestic companies
in addition to these companies and NGO’s there is also a need for protection for wealthy individuals and high net worth families.
What does kidnap and ransom insurance cover?
Kidnap and Ransom insurance covers a number of events associated with the acts of terrorist, extremist and criminal groups.
Broadly, the events include kidnapping, hijack, wrongful detention and extortion. The insured may be a commercial or non-commercial organisation, a family or an individual. The main losses which can be insured include the following.
Cover is provided against the payment by the insured of:
- ransom money, or the monetary value of any marketable goods or services surrendered to secure the release of the insured person or persons
- the loss, destruction or wrongful abstraction of the ransom during transit
- extortion money, or the monetary value of other marketable goods or services, surrendered to avoid a threat to kill, injure or abduct an insured person, or to damage property, disseminate, divulge or utilise trade secrets or introduce a computer virus designed to damage, destroy or corrupt the insured’s computerised data.
- the fees and expenses of a professional crisis response service engaged with prior authorisation of the underwriter; in most cases this will be a pre-designated company with which the particular underwriter has a relationship
- fees and expenses of other consultants such as public relations, interpreters, legal advisers and security personnel; travel and accommodation costs; interest on loans raised to meet the ransom or extortion demands; gross salary and benefits of the victim and cost of replacement
- reward paid for information which leads directly to the arrest and conviction of the perpetrators
- medical treatment and compensation for injury, disability or loss of limbs, and any post-trauma psychiatric treatment; rest and rehabilitation expenses for the victim and family.
- business interruption directly caused by the insured event. However, this cover will be a smaller sub-limit within the overall policy limit.
What is the limit of indemnity under a kidnap and ransom insurance policy?
The limit of indemnity is the maximum liability of the insurance company in respect of any incident under the policy. The limit of indemnity will usually be set in line with the maximum amount that the policyholder’s would be able t pay in the absence of insurance. In this way the risk of kidnap or extortion is not increased by the presence of an insurance policy.
Who can be insured under a kidnap and ransom insurance policy?
The insured person under the policy can be a named individual or individuals, a class of person such as employees in a certain geographical area or other person such as family members, including children of employees or names persons in the policy.
How do I buy kidnap and ransom insurance?
The market for kidnap and ranson insurance is limited with a few specialist insurers actively engaged in the provision of cover. If you wish to discuss your requirements for kidnap and ransom insurance please contact Steve Lewis on 0161 300 2930.