Who needs kidnap and ransom (K&R) insurance?

 

This insurance is recommended for anyone who often travels to, lives in, or works in other parts of the world. Americans and other Westerners are often targets when they are in other countries. They are targets because kidnappers believe these foreigners have money.

  

There have been cases of kidnappings of Americans in many parts of the world – Mexico, Central and South America, the Middle East, and Africa.

  

K&R insurance can be purchased by companies which send executives overseas, or individually by persons who travel overseas. A policy generally covers not just a corporate employee, but other persons who are in the insured person’s circle – family members, houseguests, nannies, or housekeepers.

  

There are no policies that insure for only one trip or for a short period of time. To obtain K&R insurance, one must travel out of the country regularly.

  

Some policies cost as little as $500 a year. The price would increase once the insured travels to, lives in, or works in the world’s hot spots – e.g., Venezuela, Nigeria, Mexico, India, or Pakistan.

  

What is covered?

 

These policies provide a number of options. They cover the ransom demand up to a certain dollar amount set forth in the policy agreement. Anything paid over this amount is paid by the insured company or individual.

 

A policy purchased by an employer covers the employer for any subsequent lawsuit against the company by the employee who was kidnapped. It also covers interest on money borrowed to pay the ransom.

 

Since kidnappings sometimes result in physical injuries to the victim, medical costs are also covered. If the worst should happen, compensation for death or mutilation is also provided.

 

What is not covered?

 

Policyholders who travel to a country against which the United States has imposed sanctions (e.g., Iran or Syria) will not be covered by K&R insurance. One feature of this insurance that distinguishes it from other types of insurance is the lack of a deductible. Policyholders will also have access to security experts who will give advice about the particular countries to which they would be traveling. Thus, policyholders can get safety advice before they venture overseas.

 

If preventative measures are not enough to stop the kidnappers, and a policyholder is abducted, a K&R policy provides for a crisis response team that can swing into action at a moment’s notice. This team will work to get the hostage released safely and quickly.

 

A word of caution: those who purchase K&R insurance must stay quiet about its existence. Policyholders should never discuss its existence with anyone – not even other family members who might be covered by the policy.