Kidnap and Ransom Insurance

Over the past few months I have either reviewed or have been involved in obtaining kidnap and ransom insurance bids for 5 clients. This may be more than I have done in the past two years.

I ‘m not sure if there is more demand for the coverage or if it ‘s just a coincidence.

Kidnap and ransom insurance is purchased to provide resources in the event an employee, executive, or family member is kidnapped or if there are threats against people or property. It has long been purchased by international companies and organizations where foreign travel is common.

Here are some issues to consider if you are looking at K&R coverage.

-A key reason to buy kidnap and ransom insurance is the crisis response team that comes with the policy. These are usually international firms with the experience and resources to help if a company or executive is the victim of an extortion attempt. Having such a firm on retainer is the equivalent of having a ready-made plan for such a crisis.

-The basic policy provides protection in the form of indemnification for payments made for the kidnap of a company employee or a family member of an employee. Policies cover the expenses related to the kidnapping including hostage negotiators, lost wages, and the ransom paid. Many insurers provide coverage for medical treatments after the event is over including psychiatric services, plastic surgery and rehabilitation services.

-Most K&R policies also include protection for threats to damage property as well as cyber extortion coverage.

-As there are no standard policies in this area a detailed review of each proposal must be made. Limits of liability should be chosen carefully.

Most K&R policies are purchased by corporations with overseas operations. Coverage is also available for families worried about their exposure to kidnappings and extortion.


Scott Simmonds, CPCU, ARM, CMC
Insurance and Risk Mitigation Consultant