Policy covering costs related to kidnap, extortion or detention, including ransom payment and crisis management expert assistance.
A Kidnap and Ransom (K&R) policy is a specialized cover that protects companies, their executives and employees against kidnapping, extortion, detention and wrongful restraint risks. Cover includes reimbursement of ransom paid, fees for negotiation and intervention by specialist crisis-management consultants, medical and psychological costs for the victim and family, and the company's loss of income during the incident. A fundamental characteristic of this product is absolute confidentiality: the very existence of the policy must not be disclosed, since knowledge that a victim is insured may encourage captors to increase their demands or deliberately target insured individuals. The insurer makes available to insureds specialist consultants on call around the clock, whose role is to manage the negotiation and maximize the chances of release on the best possible terms. The K&R market is highly concentrated, with Lloyd's being the reference market and players such as Hiscox, Chubb and AIG. Travel policies for expatriate executives often incorporate a K&R component. In the cyber domain, K&R policies are progressively integrating cyber extortion cover alongside traditional physical risks.
A senior executive at a mining group is kidnapped during an assignment in a high-crime area of Latin America. The K&R policy immediately activates a crisis-management consultant based in Bogota. Negotiations last 18 days and result in release against a ransom payment of 350,000 dollars, fully reimbursed by the insurer.
K&R, kidnap and ransom, assurance enlèvement, extorsion