Kidnapping and Ransom Insurance Explained

While the numbers are difficult to estimate, kidnapping for ransom is increasingly common in areas affected by civil unrest, terrorism and economic instability. Companies that are conducting business in known hotspots are at risk and, without insurance, can pay a high price to resolve these events. However, this type of policy can easily be added to existing foreign liability coverage.

What Is Covered By a Kidnapping and Ransom Policy?

Even basic policies typically offer good protection. They usually cover the ransom amount, interest payments should a bank loan be needed, medical care and loss of income. More advanced policies also pay for:

  • Family support services
  • Public relations advisors
  • Crisis management consultants
  • Related travel expenses

Businesses can even purchase a policy to cover the costs of a lawsuit brought against them by the kidnapped employee or his or her family.

How Does It Work?

Once a kidnapping has been reported to the insurer, negotiators and other specialists are sent to secure the safe release of the victim. However, it is important to note that the family or employer of the victim pays the ransom and is reimbursed by the insurer once the situation has been resolved.

Supply chains are becoming increasingly globalized and companies are exposed international liabilities at a higher rate than ever before. Kidnappings for ransom can threaten the operations of those doing business in high-risk areas. Adding a kidnapping and ransom policy to exisiting international liability coverage can protect both the company and its employees from the costs of these incidents.