Kidnap & Ransom Insurance

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Kidnap and Ransom Insurance

What is Kidnap and Ransom Insurance?

Kidnap and Ransom Insurance (also known as K&R Insurance) supports a business, its employees, and their dependents, in the event that they are detained, hijacked, kidnapped, or held hostage for ransom. 

Kidnapping takes place all over the world. However, kidnapping for ransom is more likely in specific parts of the world and should form part of a business’s risk planning when employees travel, or relocate for work.

How does Kidnap and Ransom Insurance work?

Kidnap is a terrifying ordeal for an employee to go through and can have a broader impact on family members and colleagues. It is important that your business has protocols in place to deal with this situation, should it arise, and that staff know how to act quickly. Aside from the insurance element there are also support functions in place via most Kidnap and Ransom Insurance policies.

There are a wide range of insurance products that businesses can choose from. Each will have its differing levels of inclusions, exclusions and price points (see next section). 

It is also worth noting that ongoing mental health support is likely to be a key part of recovery for everyone impacted. Therefore, having an International Employee Assistance Programme (iEAP) in place to support employees is an important consideration.

Kidnap & Ransom insurers will offer a 24-hour, 365-days a year call centre, specialising in crisis management, to contact in the event of an insured person being taken.

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What does Kidnap and Ransom Insurance cover?

Most Kidnap and Ransom Insurance polices cover all, or most of the below:

  • Ransom money paid, or lost in transit
  • Consultant costs – It’s often a requirement for the insurer to appoint a consultant. Costs covered can include:
    • An independent negotiator
    • Public relations consultant
    • Interpreter
    • Legal costs
    • Rewards paid on behalf of the policyholder to an informant leading to the release of the insured person
    • Security guards for protecting the insured person once located,
    • Communications equipment
  • Additional care expenses:
    • Rest and rehabilitation expenses of the insured person and their family
    • Cosmetic or plastic surgery to correct any permanent disfigurement for the insured person
    • Repatriation to their country of residence
    • Independent psychiatric care or the insured person
  • Employee replacement costs
    • Travel costs of a replacement employee and family
    • Salary of a temporary replacement for the insured person for up to 12 months during the event and 30 days after the even
  • Personal specialist security
    • Temporary additional security for the insured person’s partner and dependants following the kidnapping or attempted kidnapping
  • Salary continuance
    • The costs of continuing to pay the salary, cost of living adjustments, foreign tax reimbursements and welfare contributions for the insured person which are contractually due at the time of kidnap.
  • Personal accident
    • If the insured person suffers injury as a result of the kidnap which results in death, loss of limb/sight/hearing/speech or permanent total disability, within 12 months of being kidnaped.

Who are the main insurance providers?

Kidnap and Ransom Insurance is provided by a number of different companies. However, it’s worth speaking to an independent broker like Engage Health Group, as we can advise on the policy which best fits with your business need – and negotiate a better value policy on your behalf.

Nonetheless, the main providers include:

  • AXA XL
  • AIG
  • Pulse Insurance
  • CFC

What precautions can be taken to safeguard employees in high-risk locations?

  • Understand the risk present in countries you have staff in, or are sending them to, and how best to mitigate the risks in each of those locations.
  • Resist commercial pressure to send an employee if a location is deemed just too risky to travel to.
  • Establish kidnap contingency plans in advance and ensure senior execs, local management, HR and PR teams are trained and aware of the protocols in place.
  • Invest in International Security Services to provide a range of security solutions to keep your employees safe and you informed, including:
    • Real-time risk management information
    • Security briefings for staff prior to travel
    • Employee tracking tools
    • Appropriate level of on-the-ground security and secure travel in location
  • Offer specialist security training to employees headed to particularly dangerous locations. This helps them understand how best to avoid getting in trouble and how to act if they do.

“If you are looking for a personalised approach from a team that really cares, then give Engage Health Group a call.”

Where are kidnappings most likely to take place?

There are between 15,000 to 20,000 reported kidnappings for financial gain reported globally each year, with a considerable amount more going unreported.

The latest set of global UN statistics in 2017 and 2018 take into account all kidnappings recorded by the police, not just kidnappings for ransom. This presents a dataset that may appear higher than expected. While it is less useful in identifying risk hotspots for your business, it does show that kidnapping is unfortunately more common than you might think.

(Note: not all countries submitted figures and legal definitions can vary country-to-country.)

2017 Top 5 kidnapping countries by volume according to the UN Office on Drugs and Crime:

  • Pakistan – 18,363
  • South Africa – 5,455
  • UK – 4,828
  • Germany – 4,625
  • Canada – 3,778

When we look specifically at kidnapping for ransom, the global statistics take on a more expected feel. Data from Control Risks’ ‘Kidnapping and extortive crime trends review’ in 2019 revealed that:

  • 38% of global kidnaps were in the Americas,
  • 27% in Asia Pacific
  • 24% in Sub-Saharan Africa
  • 9% in Middle East and North Africa
  • 2% in Europe and CIS (Commonwealth of Independent States)

How much does Kidnap and Ransom Insurance cost?

As it’s such a sensitive issue, insurance providers are reluctant to provide publicly available information on coverage terms and price points. Concerns include: temptation for fraudulent behaviour from staff (however unlikely) and encouraging would-be kidnappers.

Naturally, prices will vary depending on a variety of factors, including:

  • Services included: such as specialist ransom consultants, security personnel & advice, legal costs and more (see ‘What does Kidnap and Ransom Insurance cover?’)
  • Number of employees covered
  • Personal wealth of employee
  • Value of business assets
  • Location

If you’d like a bespoke quote, contact Engage Health Group on (0)1273 974419.

Frequently Asked Questions

Can I get travel insurance cover with kidnap and ransom cover?

Some standard travel insurance policies can provide basic coverage for kidnap and ransom, however, the product will be limited in coverage offered and expertise provided.

Which countries are likely to have the highest risk of Kidnap & Ransom?

Locations which are considered high risk by many include:

  • Mexico
  • Venezuela
  • Nigeria
  • Pakistan
  • Columbia
  • India
  • Afghanistan
  • Syria
  • Libya
  • Iraq
  • Haiti
  • Brazil
  • South Africa

It is important to note that incidents can happen anywhere, any time and taking security precautions is important to lower the risk of kidnap.

How long does a kidnap for ransom usually last?

Again, drawing on the data from Control Risks 2019 Kidnapping and Extortive Crime Trends Review, we can see that:

  • 80% of kidnaps lasted less than a week
  • 6% lasted longer than 4 weeks
  • 1,199 days was the longest recorded case to end in 2019

Are local nationals or expats more likely to be kidnapped?

Control Risks 2019 Kidnapping and Extortive Crime Trends Review reported that 93% were local nationals and 7% foreign nationals.

It is worth noting that, while local nationals are more likely to be kidnapped statistically, this is mainly due to the smaller number of foreign nationals in kidnapping hotspots. Foreign nationals remain a potentially more lucrative kidnap, and more of a focus for terrorist groups, so it is important to ensure that security precautions are taken which will put off most mid-to-low capability kidnappers.

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