The Risk

For the business community, kidnap, ransom and extortion are very real and growing threats.

The impact of a kidnap can be enormous and it is essential that it be handled in the correct way. It is extremely traumatic for those involved, and an organisation dealing with an incident may face huge losses from ransom payments, business interruption, litigation, adverse publicity and long-term damage to reputation.

Whilst the most vulnerable companies are those that have employees based or travelling overseas, have high profiles, handle large amounts of cash or work with sensitive information or technologies, any business can be attacked. Kidnap Extortion and Detention are dangers that are often overlooked by management on the grounds that “it won't ever happen to us”, but the damage this can inflict on a business can be very severe - as the annual roll call of corporate and individual victims around the world testifies. All organizations should assess the risk of such an attack and implement plans to minimise the risk. These should combine effective security measures with insurance to protect against disruption and financial loss.

The Solution

Kidnap and ransom insurance (or "K & R" as it is known) provides protection from the financial consequences of a kidnapping and extortion attempt. It is often felt to be an important coverage for companies that send executives abroad for business travel or on an overseas posting.

K & R insurance provides financial and other resources to aid corporations and the families of employees in resolving a ransom demand in a kidnapping. Most policies also provide financial resources required to resolve an extortion threat against corporate assets or products.

Purchasing K & R insurance is easy, but the process must be confidential. The existence of the coverage could create a target where none

The Cover

While no insurance cover can ease the emotional and physical pain, Kidnap & Ransom cover can help ease the financial burden and resolve issues smoothly.

An insurance policy can be structured that will provide cover for companies or individuals that protect them from kidnap, extortion, wrongful detention, and hijacking.

The Coverage may include:

• Ransom / Extortion payment,
• Transportation and Delivery of Ransom including loss of ransom in transit
• Death or Bodily Injury
• Crisis Management
• Negotiation services
• Emergency Response help-line and related expenses,
• Medical Services and Emergency
• Evacuation
• Psychiatric care, Rest and Rehabilitation expenses
• Coverage can also be explored for Property damage extortion and Product Contamination,

Extortion of Trade Secret / EDP Extortion. Deductibles depend upon the risk assessment by the Insurers.

Without diluting the importance of [coverage] factors, the primary consideration for any "Kidnap and Ransom" policy still lies in the expertise that will be utilized for hostage retrieval. The negotiating team is probably more important than the policy. The policy should provide for both an experienced negotiator and the facilities necessary to ensure that the hostage is returned unharmed.

Most K & R Insurers package specialized security services along with the insurance coverage to help companies and families facing a demand. Experts in kidnap and extortion negotiation staff these security services, and these experts provide immediate response to advise participants on strategy and outcomes. This service can be critical in bringing the situation to a safe resolution. Some risk managers buy K & R insurance as much for the special expertise as for the financial resources.