Kidnap and ransom insurance
Encyclopedia
Kidnap and ransom
insurance or K&R insurance is designed to protect individuals and corporations operating in high-risk areas around the world, such as Mexico, Venezuela, Haiti, and Nigeria, certain other countries in Latin America, as well as some parts of the Russian Federation and Eastern Europe. K&R insurance policies typically cover the perils of kidnap, extortion
, wrongful detention, and hijacking
.
K&R policies are indemnity
policies - they reimburse a loss incurred by the insured. The policies do not pay ransoms on the behalf of the insured. The insured must first pay the ransom, thus incurring the loss, and then seek reimbursement under the policy. Losses typically reimbursed by K&R polices are ransom payments, loss-of-ransom-in-transit and additional expenses, such as medical expenses.
The policies also typically indemnify personal accident losses caused by a kidnap. These include death, dismemberment, and permanent total disablement of a kidnapped person. They also typically pay for the fees and expenses of crisis management consultants. These consultants provide advice to the insured on how to best respond to the incident.
The policies may be written to cover families and corporations. Some policies include kidnap prevention training.
Criminal gangs are believed to make $500 million a year from kidnap and ransom payments.
Ransom
Ransom is the practice of holding a prisoner or item to extort money or property to secure their release, or it can refer to the sum of money involved.In an early German law, a similar concept was called bad influence...
insurance or K&R insurance is designed to protect individuals and corporations operating in high-risk areas around the world, such as Mexico, Venezuela, Haiti, and Nigeria, certain other countries in Latin America, as well as some parts of the Russian Federation and Eastern Europe. K&R insurance policies typically cover the perils of kidnap, extortion
Extortion
Extortion is a criminal offence which occurs when a person unlawfully obtains either money, property or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime...
, wrongful detention, and hijacking
Carjacking
Carjacking is a form of hijacking, where the crime is of stealing a motor vehicle and so also armed assault when the vehicle is occupied. Historically, such as in the rash of semi-trailer truck hijackings during the 1960s, the general term hijacking was used for that type of vehicle abduction,...
.
K&R policies are indemnity
Indemnity
An indemnity is a sum paid by A to B by way of compensation for a particular loss suffered by B. The indemnitor may or may not be responsible for the loss suffered by the indemnitee...
policies - they reimburse a loss incurred by the insured. The policies do not pay ransoms on the behalf of the insured. The insured must first pay the ransom, thus incurring the loss, and then seek reimbursement under the policy. Losses typically reimbursed by K&R polices are ransom payments, loss-of-ransom-in-transit and additional expenses, such as medical expenses.
The policies also typically indemnify personal accident losses caused by a kidnap. These include death, dismemberment, and permanent total disablement of a kidnapped person. They also typically pay for the fees and expenses of crisis management consultants. These consultants provide advice to the insured on how to best respond to the incident.
The policies may be written to cover families and corporations. Some policies include kidnap prevention training.
Criminal gangs are believed to make $500 million a year from kidnap and ransom payments.
Further reading
- A Kidnap & Ransom Insurance Plan and other reference information - Lloyds, London
- Database on Kidnap and Ransom-Havocscope Black Markets
- Is K&R Coverage a Risky Business? - via Lloyd's of LondonLloyd's of LondonLloyd's, also known as Lloyd's of London, is a British insurance and reinsurance market. It serves as a partially mutualised marketplace where multiple financial backers, underwriters, or members, whether individuals or corporations, come together to pool and spread risk...
- Need K&R Insurance? - for human resourcesHuman resourcesHuman resources is a term used to describe the individuals who make up the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations...
executives - Buying Protection from Terrorism - Human Resources magazine