Kidnap & Ransom Insurance – What is it?

Kidnap, Ransom and Extortion Cover

What is it?

Kidnap and ransom insurance may be a good idea to buy if you travel internationally these days.It can provide peace of mind if you live in, work in, or travel often to foreign countries.

Kidnapping is on a rise, yet only 60 percent of Fortune 500 companies, carry K&R insurance. This trend is now changing, with insurance underwriters and the individuals themselves, now requiring that K&R services be included within the terms and conditions of their employment.

Why do I need Kidnap & Ransom Insurance?

Kidnappings are on the rise on both land and at sea. There are more ransom demands than at any other time in history. Other factors have contributed such as the downturn in the global economy throwing more people into poverty and has made kidnapping a major business.

There are estimates that kidnapping is a $500 million a year criminal activity.

Incidents of kidnapping have increased in countries from India to Haiti.

Australian Government advised that they advise against all travel to specific areas of the Philippines and against all but essential travel to other areas of the Philippines. This includes  travel to south-west Mindanao and the Sulu archipelago because of ongoing terrorist and insurgent activity. They have advised against all but essential travel to the remainder of Mindanao for the same reason. There are also ongoing clashes between the military and insurgent groups in the Sulu archipelago including Basilan, Tawi-Tawi and Jolo.

There is a threat from kidnapping in the Philippines, particularly in the southern Philippines. Kidnapping could occur anywhere, including on coastal and island resorts and dive boats and sites in the Sulu Sea. On 12 July two US citizens and a Philippine national were kidnapped from a resort on the island of Tictabon near the southern port city of Zamboanga. On 5 December 2011, an Australian citizen was kidnapped in Zamboanga. This what he told us recently.

“Hello, my name is Warren Rodwell. I have the dubious distinction of being the longest held Australian captive out of war, after being shot through the right hand when kidnapped in the southern Philippines on December 5, 2011 by the Al Qaeda-linked Abu Sayyaf Group (ASG). It was necessary to eventually have a finger amputated.

The ASG threatened to behead me if the original ransom demand for $US2 million was not paid. Both the Philippine and Australian governments had strict policies of refusing to pay ransoms. After the payment of $AUD94,000 for “board and lodging” expenses by my siblings, I was released 472 days later on March 23, 2013, and subsequently returned to Australia to rehabilitate, after losing about 30 kilograms in weight due to starvation. 

Now when I travel, I always make sure I have the right cover. A policy with adequate Kidnap and Ransom cover, along with good medical and repatriation coverage. 

I did not think this could ever happen to me, but it did. I certainly wish I had the right cover that would have assisted me. So speak to your Insurance Broker and make sure you get the right advice and have the right cover for any future trips you make overseas” Warren Rodwell 18/12/2015

Watch his story here on You Tube  or the news report and check out his website www.warrenrodwell.com

Foreigners have been targeted in rural, urban and coastal areas in the past. It is a long-standing policy of both the Australian Government and the British Government not to make substantive concessions to hostage takers. They consider that paying ransoms and releasing prisoners increases the risk of further hostage taking.

U.S.-based financial advisors who serve wealthy people are even beginning to recommend K&R insurance to their clients.

The following countries are listed as being the locations where kidnapping most frequently occurs. Persons traveling to these locations, should consider kidnap and ransom insurance, also the services of a bodyguard or close protection team, as good business sense. That said, there have been numerous recent cases in the USA and UK for example, where plans to kidnap the children of high profile persons have been uncovered. K&R is not a luxury service, it is increasingly being seen as a sensible precaution.

Areas of known high risk of kidnapping:

  1. Brazil
  2. China
  3. Colombia
  4. El Salvador
  5. India
  6. Malaysia
  7. Mexico
  8. Philippines
  9. Russian Federation
  10. Venezuela
  11. Afghanistan
  12. Iraq

Increasingly, any high profile, high net worth or key person, can be the target of a kidnap, ransom or extortion incident, anywhere in the world, including in their home nation.

 

How does the cover work?

Insurance alone is not enough in a crisis situation. In addition to financial cover, clients require immediate expert assistance. Included at no additional charge to a policyholder, are the services of K&R consultants, together with a negotiation, close protection and retrieval team if required, on call 24 hours a day, ready to travel anywhere in the world to provide emergency crisis assistance in the event of an insured kidnap or extortion event.

You should never discuss that you have this cover with anyone. Not even other family members who might be covered by the policy, because kidnappers will feel more confident of the target if there is a ready financial resource attached to them.

There are other issues with K&R insurance besides keeping it quiet so no one gets any bright ideas about taking you hostage. Kidnappers typically demand that neither the authorities nor anyone else be notified.

Many insurers offer K&R insurance, and  all sorts of companies around the world offer the option of including it in Corporate Travel policies and even some Directors & Officers Liability policies. Or it can be purchased as a “stand alone” cover on a per employee or traveller basis. It normally also includes Extortion cover. This coverage protects from threats against property, computer systems and the contamination of products.

Some policies come with bodyguard and other rescue services. Upper- management executives at major international companies should note that they may already be covered, and just don’t know it — for the same “keep quiet” reasons stated above.

Organisations that send employees abroad, should consider purchasing K&R insurance as part of their best practice, legal and moral obligation. Most policies insure the ransom funds while it is in transit, the K&R consultants fees, medical, counselling, media liaison and legal fees.

Additional coverage that a K&R policy can provide, is expense reimbursement. This includes travel expenses for family members, the kidnapped employee and the abductee’s lost salary.

Kidnapping is on a rise, yet only 60 percent of Fortune 500 companies, carry K&R insurance. This trend is now changing, with insurance underwriters and the individuals themselves, now requiring that K&R services be included within the terms and conditions of their employment.

The K&R services usually include:

For those who opt to purchase it, K&R insurance can be had for as little as $500 per year.

Most people would never think of purchasing this cover.

In fact, in Mexico and throughout parts of Central and South America, kidnapping is so common that the U.S. State Department refers to them as “express kidnappings.” Thousands of cases occur each year.

In any event, as more people travel abroad for business or simply go to unusual places for pleasure, K&R should be definitely considered.

Also as the global economy pushes more people into dire straits, many will take up criminal means to survive. While it’s almost impossible to insure against a bad global economy, it is possible to insure against being taken hostage by it.

Business Executives, Adventurous travellers and wealthy travellers should take out Kidnap & Ransom insurance, either in a Corporate Travel Policy or Stand alone cover.

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