Kidnapping Insurance – Ransom, Extortion for Individuals and Business

Kidnapping insurance (also called kidnap and ransom insurance, K&R insurance, or KR&E coverage) protects people from what can be a very expensive (on top of horrifying) ordeal of kidnapping, extortion, detention, and/or hijacking. In most cases, the insurance reimburses the ransom costs rather than paying them upfront.

This article will explore the variations of kidnapping and ransom insurance, including different types, options for personal or business uses, and how to apply.

If you have any questions, give us a call at (858) 703-6178. To read more about different types of travel insurance, click here.

Kidnap and Ransom Insurance Quote

Complete the form below to receive a kidnap and ransom quote. If you are ready to submit an application, please complete the application included in the product brochure, which you can download by clicking the button below. This application can be scanned and emailed to chris@abramsinc.com.

Importance of Kidnapping Insurance

Extortion has become a serious concern in some parts of the world, both for people traveling and for businesses.

One of the main concerns for high-net-worth individuals is that even if they have the assets to pay the ransom, they’re often illiquid. Selling in a hurry (and any taxes involved) can leave the family in dire financial trouble even when the loved one is brought home safely. This type of insurance provides peace of mind with many of the extra benefits outlined below, along with financial protection, ensuring that individuals do not have to shoulder the cost.

For businesses, insurance:

• Protects employees
• Helps maintain operations
• Safeguards financial stability
• Prevents loss of reputation

Kidnapping Insurance for Individuals

If you know you’re traveling to high-risk areas or if you’re a known public figure, you may be a target. Remember Tim Ferriss’s advice to have drivers pick you up under a different name when traveling? (This was before everyone had Uber/Lyft apps.)

This coverage ensures you have access to professional crisis management teams with the experience to get the best results from a bad situation. It can protect the insured person and family members, creating comprehensive protection.

Kidnapping Insurance for Business & Employees

For companies with team members traveling to volatile areas, kidnap, ransom, and extortion insurance creates a key pillar of a risk management strategy. It protects your employees who are traveling or working abroad, ensuring they have support in case an incident happens and that you aren’t left scrambling to figure out what to do.

It can be set up as part of an employee benefits package or as part of your business to insure against risks to your business through key team members.

What Does Kidnapping Insurance Cover?

A good kidnapping insurance policy includes the following:

• Ransom reimbursement – the insurance company pays the policy owner back the ransom amount
• Personal accident benefits – lump sum for loss of limbs, sight, disablement, or death
• Loss of ransom during delivery – covers loss of the ransom during transit
• Private negotiator expenses – expenses covered for a private negotiator, who has to be approved by the underwriters
• Public relations costs – expenses of a PR consultant or interpreter
• Travel expenses – covers costs of accommodations and travel on the advice of the crisis response team
• Psychiatric expenses – covers costs of independent psychiatric, medical, and legal advice prior to release and for 12 months after the event
• Reward payments – reimbursement of rewards paid by policy owner to information leading to the event resolution
• Loss of income – covers salary of kidnapped person
• Financial losses – covers monetary losses resulting from an inability to attend to personal matters during the kidnapping
• Employee income protection – covers the salaries of employees specifically designated to assist in negotiation
• Asset protection – covers interest on loans specifically taken to meet ransom demands
• Security coverage – covers expenses for security guards, depending on the recommendation of the crisis response team
• Specialized equipment – cost of communication equipment, recording equipment, or advertising resulting from an incident
• Rehabilitation – rest and rehab expenses for six months after release. Covers the victim, the victim’s spouse and/or children.
• Funeral expenses – covers the cost of repatriating the body and burial/cremation in the event of death during an event.
• Child care – covers child care expenses resulting directly from a covered event.

Ransom Demand Coverage

Ransom coverage reimbursement is the primary benefit of this type of insurance. The insurance will not pay the ransom for you, but it will reimburse the policyholder for the ransom paid to secure the release of the kidnapped person. It often also covers the contingencies where something goes wrong, such as the ransom money being stolen or lost or other incidents.

Business Interruption Coverage

Business interruption compensates the policyholder for loss of income to the business (and often any additional expenses) when the kidnapping affects the business operations. It’s especially helpful for small businesses where the kidnapped person’s absence may cause a loss of revenue in addition to a personnel crisis.

Additional Expenses Coverage

Unlike thriller movies, a great deal of teamwork goes into recovering someone during a kidnapping incident. This typically includes:

• Hiring security personnel or security consultants
• Specialized communication equipment
• Public relations
• Professional negotiators
• Crisis response team

Depending on the region and specific case, incidental expenses, in addition to the ransom demand, are usually necessary to secure the person’s release.

Medical Care Coverage

Kidnapping insurance also provides for the aftercare of an incident. This could be medical, psychiatric, and even legal care for the specified incident period and some time afterward.

Factors to Consider When Choosing a Kidnapping Insurance Policy 

When selecting a kidnapping insurance policy, take a look at the following factors to see what best first your business or personal needs:

• Coverage Limits: What is the likely ransom demand of the likely areas of travel? Will your policy provide sufficient cash for the expenses?
• Geographic Scope: Where on the globe will the policy cover? Are there any exclusions? What about personal travel versus work travel?
• Crisis Response Service: What does the policy include for the recovery efforts?
• Policy Exclusions: Aside from any geographic limitations, are there other exclusions on the policy?
• Reputation of the Insurance Company: What is the company’s experience in serving these types of policies? What is their financial security rating?

Financial Losses Covered 

Kidnapping insurance covers personal financial losses directly resulting from the victim’s inability to pay attention to personal financial matters during a kidnapping, extortion, detention, or hijacking incident. It’s a fancy way of saying that the victim has the financial support to deal with extortion demands and the associated expenses.

Extortion Threats Covered

In addition to kidnapping, the company we’re highlighting here (Petersen’s International Underwriters) also covers extortion threats. This extra layer of coverage provides financial support when the insured is threatened with injury, death, abduction, or property damage.

Legal Liability Coverage

Legal liability coverage is an often overlooked aspect of kidnapping insurance. It provides extra protection against legal claims arising from kidnapping (or related) incidents. For example, if something goes wrong and the family decides to sue, you’re facing a legal battle on top of everything else.

How to Get Kidnapping Insurance

1. Assessment of Risk: The insurance company will conduct a risk assessment to determine the likelihood of a kidnapping, ransom, extortion, other security risks, etc. incident based on the applicant’s business and other activities.

2. Policy Application: You’ll need to provide detailed information about yourself or your business, including travel plans, security measures, and any past incidents.

3. Underwriting: The insurance company will look over its own risk assessment and additional information on the policy application to determine the offered coverage terms, limits, exclusions, and premiums.

4. Policy Issuance: If you choose to agree to the offer, you’ll pay the initial premium, and then the insurance company will issue the policy, providing detailed information for your records about the coverage, conditions, and what to do in the event of a kidnapping or other incident.

5. Crisis Management Plan: Finally, you’ll work with the insurance carrier to develop a crisis management plan, ensuring you’re prepared to respond to crisis events.

How to Get a Quote For Personal Kidnap and Ransom Insurance

K&R is a specialty insurance and each policy is highly customized to the needs of the buyer. The best way to get an accurate quote is to fill out the application below.

When you’re finished, scan it and send it to info@abramsinc.com.

There is no obligation to purchase, it just helps us get the information we need to get you the right numbers.

How to Get a Quote for Kidnap and Ransom Insurance for a Business

Getting a quote for your business needs follows the same process as a personal quote.

• Download the PDF below
• Fill it out
• Scan it and send it back to info@abramsinc.com

We will contact you with the numbers for your unique needs shortly after receipt.

How Abrams Insurance Solutions Can Help 

Abrams Insurance Solutions provides people and businesses with the security they need to travel safely for business or pleasure.

Complete the form on this page to obtain a customized kidnap and ransom insurance quote.

Individuals and organizations can be confident in managing and mitigating the risks associated with kidnapping and related threats. The combination of personalized coverage, expert crisis management, and comprehensive support means that you’ll have a team to rely upon in safeguarding against the financial and emotional impacts of kidnapping and ransoms.

By understanding the intricacies of this type of policy, you can safeguard your family and/or your business against such traumatic events. Insurance companies not only provide financial protection but also ensure access to professional crisis management services, helping to secure the safe release of the victim and mitigate the long-term consequences of a kidnapping incident.