Kidnap Insurance: An Overview

By Cedric Loiselle

Kidnap and ransom insurance is also known as K&R insurance. It is established to secure people and companies that operate in certain areas known to have high kidnapping incidents. This type of insurance covers the kidnapping, extortion, and hijacking risks. It is a policy that provides compensation to the holder in case loss is incurred. Contrary to misconceptions, this type of insurance does not promise to pay the ransom imposed by the kidnappers. It is the insured who will pay the ransom. After paying the ransom, the insured can claim for reimbursement.

Usually, kidnapping insurance policies provide reimbursement for the cost incurred as a result of the kidnapping. This includes medical expenses aside from ransom. Personal accident and losses are also subject to reimbursement. Death, disablement, and loss of employment shall be compensated. The insurance provider shall also pay for crisis management and psychiatric intervention. Kidnapping insurance policy coverage may also involve kidnap prevention training aside from reimbursements.

Holding an insurance policy for kidnapping does not mean you can stop exercising vigilance. Many companies give crisis management training to workers before sending them to high-risk zones. Such training may teach them what to do in case of hostage or hijacking situations. This training can help reduce losses that happen as a result of kidnapping.

Kidnap and extortion are real perils for corporations that operate locally or abroad. However, many companies are too complacent. They think chances of kidnapping or extortion are low. However, when such incidents happen, that is when they realize what they missed out on. The cases of kidnapping around the world are compelling. Then again, it is easy to overlook the threat.

Around the world, there are more than one thousand cases of kidnappings involving professionals and corporate executives. Aside from kidnappings, there are also terroristic attacks that endanger people working in high-risk countries. Life and health of workers sent to other countries should be considered. Kidnapping and other terroristic attacks subject victims to injuries. Worst case scenario is that the perpetrators kill their victims.

Then again, not everyone needs a kidnapping insurance. Generally, high-profile individuals should get this form of insurance policy. Kidnappers, for some reason, know the high-profile or wealthy people. These people are likely to be their victims. Once kidnapped, the victim may have no choice but to follow the kidnappers’ orders. This would usually mean he or she has to pay for ransom, which usually is a huge amount of money. Without insurance, these people are at risk of losing big amount of money. With the right insurance, however, they are guaranteed of reimbursement. For high-profile people who have to travel to high-risk countries, such guarantees could be extremely advantageous.

Kidnappers may not distinguish between wealthy and average-earning individuals. You may only be thinking that kidnapping is limited to countries with high likelihood of terrorism, but the truth is radical group exists virtually everywhere.

Aside from ransom reimbursement, kidnap and ransom insurance policies also promise assistance to family and company of the insured kidnap victim. While paying for kidnapping insurance may seem to be an unimportant expenditure, it actually is indispensable.

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