Kidnap And Ransom Insurance
What Does Kidnap And Ransom Insurance Mean?
Kidnap and Ransom insurance is an indemnity policy that compensates individuals for financial losses incurred if they become victims of a kidnapping for ransom. The compensation typically covers medical expenses for injuries and damages resulting from the incident.
Insuranceopedia Explains Kidnap And Ransom Insurance
Kidnapping for ransom is a crime that primarily targets wealthy and high-profile individuals, as well as those who frequently travel abroad for work. These individuals are the most likely to purchase Kidnap and Ransom (K&R) insurance.
It’s important to note that the insurer reimburses the ransom amount after it has been paid by the policyholder or their legal representative; the insurer does not provide ransom payments directly to the kidnappers. After paying the ransom, the policyholder can file a claim for reimbursement.
K&R policies also include a confidentiality provision, meaning policyholders are prohibited from disclosing the existence of their policy. This is intended to reduce the risk of potential kidnappers targeting the insured due to knowledge of their coverage. As a result, policyholders themselves may sometimes be unaware of the policy’s existence. For instance, companies may purchase K&R policies for employees without their knowledge to comply with this non-disclosure requirement.
Finally, coverage is generally excluded if the policyholder is kidnapped in a country where their government has issued a travel advisory or restriction.
