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What Exactly Is Kidnap & Ransom Insurance Coverage And Why Is It Important?
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What exactly is Kidnap & Ransom Insurance coverage?
The overall function of kidnap and ransom insurance coverage is to provide access to funds and professionally trained negotiators when ransom demands must be met. However, the cover in most scenarios goes well past just this. It'll give help in coping with the commercial publicity impact and the moral responsibilities of the victim. It'll also cover the cost of rest and recuperation of the victim once released including psychological therapies.
One of the less obvious covers is that it also has transit cover for the physical loss of the ransom money - it has been known historically for this to be stolen on route to the drop off point.
Kidnap and ransom insurance policies are available for both individuals and corporations. This type of insurance is also provided with a really high degree of discretion. Brokers who are experts in kidnap & ransom insurance are expected to prepare most paperwork using coding and numbers for insured names and also for the files to be kept in secure conditions.
From covering the cost of kidnappings underwriters have steadily extended the risks they may be able to cover to extortion and piracy and hijacking.
To find out more please visit XactExpat.
So Why Do Individuals/Companies Need K&R Insurance?
As business continues to expand globally, there has also been a rise in kidnappings around the world. Kidnappings can be both short-term or long lasting, and occur for numerous purposes, socio, criminal or political, etc.
Due to the secrecy attached to the acquisition of Kidnap and Ransom insurance coverage it's difficult to approximate the actual size of the marketplace in premium terms worldwide. However, it is regarded as being approximately USD$350 - 500 million annually. This covers close to 15,000 kidnappings per year.
In view of the high risk to senior executives and workers travelling and working globally the price of kidnap and ransom insurance is not as expensive as some might think. To buy insurance for a multinational with a turnover of above USD150 million it might cost as little as USD10,000 for a USD10 million limit. Money wisely spent for comfort when travelling to certain parts of the world.
Where does kidnapping occur globally?
The truth is this will depend on the reasoning behind it - where you have a large poor population and very small elite and no, or little, middle class this tends to encourage criminal enterprise. Some examples could well be some South American countries for example Colombia and Venezuela. In other parts of South America such as Peru it could be laid at the door of political differences with the groups like the Shining Path using it to not only make political claims but as a source of funding for their political cause.
In places like Nigeria there is a mixed rationale - in a few parts it is considered as criminal, in some it is political with the use of kidnapping as a means to redistribute oil wealth and the third reason is quasi religious/political reasons in wanting to change the laws.
In other parts of the world it may be religious or purely political ends being used to scare certain sectors of the local populace. The overriding factors in all of this are high degrees of corruption, terrorist activity and ineffectual law enforcement.
The US Undersecretary for Terrorism and Financial Intelligence estimates USD120 million has been paid to terrorist organisations over the last 8 years around the globe. Current known hot spots are :Afghanistan, Iraq, Mexico, Nigeria, Syria, Somalia, Venezuela, Colombia, Peru, Yemen and Guatemala.
Being a Lloyds Broker we also have use of other business solutions such as Personal Accident and Sickness for staff for either permanent or temporary disablement , Death and permanent disability, Annual Group Life and Keyman and critical illness cover. - so if you like the idea of a ‘one-stop-shop’ for your business insurance needs ask us how we may help.
Xact Risk Solutions
Andrew has over twenty years experience providing the best insurance solutions for his clients needs. A recognised expert in the field of international medical insurance, he has helped expats all around the world whether they be individuals, families, groups or companies. Please visit the website at www.xactexpat.com to find out more, or you can get a free, no obligation quote simply by visiting www.xactexpat.com/get-a-quote.html
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