When running a business, you may be considering certain types of insurance to keep your operations, finances, and employees safe. Things like fire insurance, property damage coverage, and maybe even auto policies for business cars may first come to mind. But have you considered kidnap and ransom coverage?
This kind of policy may not seem like it’s needed, but like other insurance policies it’s an effective piece when something as devastating as a kidnapping takes place. In today’s world, when we hear the word “ransom,” we may think about ransomware attacks online when a cyberattack is followed up by a hefty financial demand. And while this kind of incident is important to cover against, like with cyber liability coverage, actual physical kidnapping and ransom events can happen at any time at any place around the world.
For business owners looking to go abroad or send their employees somewhere across the globe for a trip, here’s why it’s important to consider kidnap and ransom insurance.
Who Needs Coverage?
Kidnap and ransom coverage is usually provided as part of a personal insurance package or a corporate insurance portfolio. In general, companies with employees who frequently travel abroad to areas where kidnaps and ransoms take place on a more regular basis, such as Mexico, the Middle East, or Central America.
K&R insurance can include coverage for spouses, relatives, guests, single individual, or housekeepers. When it comes to personal kidnap and ransom insurance, individuals can get a stand-alone policy, however, it may cost a good deal more compared to a collective business policy, given the usual high-stakes ransoms demanded by captors.
What is Covered?
Kidnap and ransom insurance coverage protects businesses and individuals against major financial losses that result from kidnapping, extortion, and ransom demands. This kind of policy is specifically designed to insure those who travel often, not just single trips. A typical policy usually covers payment, loss of income, interest on bank loans involved in a ransom payment, and medical and psychiatric care.
K&R insurance can also cover the costs of business interruption, consultants for crisis management, support services, and public relations duties. A policy purchased by an employer covers the costs of any additional lawsuit against a company by the employee who was kidnapped, for example.
What’s Not Covered?
Certain parts of the world have sanctions in place that essentially cancel out K&R insurance policies, such as Syria and Iran. Many policies allow access to security experts who can help provide consultation on where policy owners should and shouldn’t travel, as well as how to travel safely when going to certain parts of the world.