Thursday, 21 January 2016

Kidnap and Ransom Insurance

A kidnapping incident can have a devastating effect on the family and employer of a victim. Apart from the mental trauma, the financial impact of paying a huge ransom cannot be ignored. This is where insurance cover for Kidnapping and Ransom or K and R cover can help individuals and employers.
The demand for K and R insurance has seen an increase in India following globalization and MNCs setting up operations in India.  Those in need of such cover include organizations that have high profile management and those that handle large amounts of cash or work with sensitive information or technologies. Top executives of these companies prefer to have K and R cover to protect themselves and their families. Employers too opt for this insurance cover to protect against huge losses on ransom payments, business interruption, litigation, adverse publicity and damage to reputation.

The cover provides financial and other resources to aid corporations and the families of employees in resolving a ransom demand in a kidnap. Most policies also provide financial resources for resolving extortion threats against corporate assets or products.

Another important point is the purchase of K & R insurance must be confidential. The existence of the coverage could create a target where none existed earlier.

Scope of Coverage:
The cover includes

Ø  Ransom / Extortion monies, including delivery expenses
Ø  Transportation loss of ransom money
Ø  Related expenses, viz., salary, personal financial loss, medical costs, rest and rehabilitation, travel and accommodation, loan interest, reward, interpreter, forensic analysis, other reasonable and necessary expenses, recall expenses, business interruption etc.
Ø  Judgment, Settlements and defense costs
Ø  Death or Dismemberment arising from a covered incident
Ø  Crisis management expenses , including negotiation services fees

Possible Extensions:

Ø  Evacuation and repatriation of the person
Ø  Legal costs to defend claims of negligence in incident handling 
Ø  Child abduction
Ø  Post-incident rest & rehabilitation expenses
Ø  Product contamination risks as part of extortion
Ø  Political threat coverage’s


Ø  Fraudulent, dishonest, or criminal acts of the Insured or a covered person(s), or any person authorized by the Insured to have custody of ransom monies
Ø  Monies paid by a covered person(s) in a situation where local authorities have declared such payment illegal
Ø  Monies or property surrendered away from the premises in any face to face encounter involving the use or threat of force or violence unless surrendered by a person in possession of such monies at the time of such surrender for the sole purpose of conveying it to pay an extortion or demand for ransom monies previously communicated to the Insured or a covered person(s); or
Ø  Monies or property surrendered on the premises unless brought onto the premises after the demand for ransom monies for the purpose of paying such demand; or

Premium Rating:
Rating of the policy shall depend upon perceived risks by the underwriter after considering variables which include geographical location, number of employees in a particular location, employee’s travels schedule, past kidnapping and ransom incidents, nature of duties etc.

Policy features:

Ø  The policy is generally issued on reimbursement basis
Ø  The policy includes limits per loss within an aggregate policy limit
Ø  Considering the peculiarities of the policy, it is normally a condition that the existence of the policy is kept confidential

In India K and R insurance is being offered by private sector insurance companies. . To know more about getting the right insurance policy based on your needs  and an unbiased opinion on the best options please visit or call us on +91 9848884363

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