Kidnap and ransom insurance

Kidnap, ransom and extortion are a very real and growing threat. As many as 12,500 kidnappings are reported each year in over 40 countries, mainly in Latin America, Africa, Russia and Asia, with the average ransom payment doubling in the last four years and some payment demands exceeding US$50 million. While the most vulnerable individuals have a high net worth, many victims include those with high profiles and extensive global travel.

Kidnap, ransom, extortion and hijack continue to be issues for both corporations and individuals. Kidnapping of individuals or attempts at extortion are well-established crimes.

Kidnap is now increasingly prevalent given the scope of overseas travel, global company operations and actual or perceived wealth of individuals. Most kidnaps are carried out for financial reward and, in the majority of instances, a ransom is paid to the kidnappers.

Extortion threats to damage products, property and computer systems are real issues being faced by companies on a worldwide scale. Insurance protects companies against all forms of extortion and can protect its assets from illegal demands and related expenses.

Political evacuation of a company's employees can involve considerable travel and accommodation costs. In certain parts of the world, the political situation can deteriorate almost overnight. Companies operating in areas of political and economic instability need to deal with the problems associated with withdrawing their staff and families after an incident and quickly. Cover encompasses costs for evacuation of expatriates and their dependants out of the country or area, and repatriation.

Business Targeted

There are a number of prime targets for kidnappers and extortionists across the world who are lured by a potential financial reward, media exposure and political propaganda gained by these violent acts. Targets can include high profile individuals, high net worth individuals, sports figures, charitable organisations, financial institutions, multinational corporations with overseas assets, or individuals either travelling or residing overseas.

What does kidnap & ransom insurance actually cover?

Kidnap or alleged kidnap

When the insured is seized or detained for the purpose of demanding a ransom.

Extortion and ransom

Payment demands following a threat to injure, kill, or kidnap an insured person.

Wrongful detention

When the insured is confined by a government entity or insurgent organisation against their will.

Hijack

The illegal holding under duress of the insured while traveling in any aircraft, motor vehicle or waterborne vessel.

Cover also includes:

- Death or dismemberment benefits arising from a covered incident

- Ransom or extortion payment

- Loss of payment while in transit

- 24-hour emergency response help line

 -Related expenses: consultants, personal financial loss, medical costs, rest and rehabilitation, travel and accommodation, loan interest, reward, interpreter, forensic analysis, other reasonable and necessary expenses.

Does it apply throughout the world, or are some areas just too dangerous? And are premiums graded by degree of danger?

Covers anywhere in the World and premiums are dependent on the insured’s:

- Profile

- Employment and industry type

- Country of residence

- Travel pattern

- Net worth or turnover

- Preventative measures in place

- Copies of crisis management plans.

Can individuals take out this cover, or is usually purchased as a group scheme?

It’s aimed equally at individuals and customers.  Individuals with a high-profile and/or high-net-worth are more likely to take out the insurance.  Companies set up corporate plans for their directors and key employees.

Does it actually pay out a ransom sum (and if so, to what limit?) or does it just pay for negotiations with captors and for other arrangements?

It pays a ransom or extortion up to a maximum of US$ 50,000,000, or equivalent. Larger amounts can be negotiated.

Is it automatically renewable when the expat moves from one hotspot to another, or does the risk have to be reassessed?

When originally assessed by the insurance company, the travel pattern of the individual is considered.  So they can take out insurance to cover them for extensive travel over a long period or a short stay.  If they deviate from the agreed travel pattern, their plan will have to be reassessed.