Kidnapping. Abduction. Ransom. It’s all terrifying to think about, but are you actually at risk of it happening to you or someone you care about?
While it may seem like just a plot device from the movies, kidnapping for ransom (K&R) is a very real threat, whether you’re traveling internationally or right here on your home turf. Kidnap and Ransom Insurance (K&R Insurance) exists to provide a financial safety net in this unthinkable situation.
But, before you run out to buy K&R Insurance, there’s a few things you’re going to want to (and should) understand first. Like, what does it cover? Who’s at risk of K&R? How much does it cost? Most importantly, what precautions can you take to reduce your risk before that worst case scenario happens.
What is Kidnap and Ransom Insurance?
Kidnapping, hijacking, and extortion are such a prominent threat around the world because of how much money criminals can make from each “successful” job. The average ransom demand is estimated at $1.15 million.
Since it can be so lucrative for kidnappers, that means these ordeals can be extremely costly for the victims. And that’s on top of the stress and anxiety of having someone in your life taken! But, if you have insurance, the settlements average $355,000 and 98% of victims are returned safely.
K&R insurance will reimburse the families and businesses that fall victim to ransom demands. Coverage doesn’t just reimburse for ransom money, though. With proper coverage, you can get reimbursed for:
Ransom Payments
Since it’s in the name, obviously this is the main function of K&R Insurance. Being covered means your people are returned safely, without crippling your family or business financially.
Crisis Management
The process of negotiating the safe return of an individual can also generate a lot of hidden costs and undue stress. Some policies will get you access to a team of professionals, including investigators and lawyers, to help bring the kidnapped home safe much faster.
Extortion
Not quite ransom, extortion is still costly when you’re being threatened with bodily harm or property damage unless you pay up. Fortunately, some policies include kidnap and extortion insurance that will also reimburse you.
Wrongful Detention
What about wrongful arrests or political imprisonment? Get your legal fees covered for the safe release of individuals in this sort of crisis by adding wrongful detention insurance to your policy.
Other Expenses
The hidden expenses following something like kidnapping can really add up, too. Think about medical costs, lost wages, or damage to property, and how much that could cost you in the long run. You can even get kidnapping prevention training reimbursed to help avoid the nightmare of someone being abducted.
Why is Kidnap and Ransom Insurance Necessary?
While there aren’t concrete numbers on exactly how many kidnappings for ransom occur globally, estimates are as high as 25,000 each year. And it’s not just high-profile CEOs traveling internationally at risk, even ordinary people in their hometown can be taken for ransom.
Not only that, extortion, hijacking, and wrongful detention can happen to anyone. The most important thing you can do is understand how to avoid it happening in the first place. If you are traveling, research where you are going and what the risks are, then take security measures to reflect that. The U.S. State Department includes these risks in their travel advisories list.
But what if the worst still happens, despite your preventative measures? That’s when K&R Insurance comes into clear the path for a safe return:
- – Provides Financial Relief: Even though coverage won’t directly pay a ransom demand, ransom insurance will pay you back for what’s been lost. If you have to choose between someone’s safety or financial security, why not choose both? Get them home safe and cover your assets with the help of professionals.
- – Access to Expertise: Although it’s standard procedure to include specialists in any kidnapping case, the information doesn’t always reach these professionals in time. With kidnapping insurance, psychologists, investigators, and lawyers can assist you from the start. For overseas cases where the FBI is involved, they are required to offer services to the victims, beginning with immediately deploying an operational psychologist.
- – Reduces Emotional Distress: When someone experiences a kidnapping, it is usually one of the most traumatic events they will ever go through. By easing the financial burden, getting the right team on your side during the ordeal, and covering health care and recovery after, you can make the challenges afterward much more navigable.
An Example Situation Where K&R Insurance is Needed
You might be wondering what the process actually looks like.
Imagine for a second that an American journalist is sent abroad to cover a story on political unrest in Sudan.
It’s important to note that anything in this article should neither deter you from traveling abroad, or play into any xenophobic concepts. Rather, a country like Sudan, with a Level 4: Do Not Travel advisory, was specifically chosen as a “worst case scenario” location due to their threat of armed conflict and high kidnapping and violent crime rate currently.
Back to our fearless journalist. While they’re on assignment, an armed raid occurs and a number of people are taken captive. Sadly, this includes our journalist, speaking English and carrying a notepad and camera. The prospect of ransom money for an American is just too enticing to the desperate criminal organization.
After finding their media credentials, the news organization employing the intrepid journalist receives correspondence from the criminal group, demanding a ransom of $2 million or else the journalist loses their life.
Now, the news organization, which is a small, independent label that doesn’t have the means to meet these demands, is in a serious pickle. The options are losing the life of their journalist, or facing total financial collapse. What are they to do?
Fortunately, this news group has kidnap and ransom insurance for journalists already, before sending anyone abroad. They report the situation to their insurance agency, who then assembles a team of negotiators and investigators experienced in handling ransom and extortion.
The ransom is paid, quickly reimbursed, and the professional team oversees the fast and safe release of our journalist. Then, the journalist receives medical and mental health care, which is also covered, to process and heal from the nightmare they lived through. Finally, every employee in the news organization goes through “kidnap prevention training,” paid for by their policy. Happy Ending.
Who Qualifies for Kidnap and Ransom Insurance?
Not everyone needs a specialized policy like K&R Insurance, so who is really going to benefit from it?
People at higher risk for ransom and extortion are generally high-profile, wealthy, or travel often, especially to places with higher crime rates and civil unrest. But, some people that would qualify might surprise you.
- High-Net-Worth Individuals (HNWIs): Wealthy individuals and families are at the top of the list because of the perception that the family will be willing to pay very large ransom demands. This group also tends to be more identifiable publicly, putting a target on the backs of anyone in a risky situation. Like when Frank Sinatra, Jr. was kidnapped from his dressing room in 1963.
- Corporate Executives: High-ranking individuals of large companies are more easily targeted for the same reasons as high-net-worth individuals.
Kidnap and ransom insurance for executives would be a necessity to any CEO planning to travel out of the country since, in this case, the expectation is that the business, rather than the family, would pay out for ransom demands.
This was the case when the CEO of Heinekin was kidnapped for ransom in 1983.
- Employees Working Abroad: Whether it’s the employer or the family expected to pay out, workers traveling into dangerous areas are also at risk of becoming targeted. Journalists, aid workers, petroleum engineers, and even accountants have been held for ransom while traveling for work.
- Families with Children: Sadly, children are some of the most frequent targets for kidnapping, which makes kidnap and ransom insurance for families a valuable benefit to have.
Kids are easily coerced and can be even more easy to lose track of, whether that’s on a family vacation or even in their own home, like the still-infamous case of the Lindbergh baby.
Areas of the World Where K&R Insurance is More Prone to be Needed
Depending on your other risk factors, K&R Insurance could be a good idea no matter where you are in the world.
However, certain areas have a much higher probability of a kidnapping attempt occuring. Just be sure to talk to your agent before booking a trip to extremely high-risk places, since it could void your coverage.
Regions where you definitely want to check your policy and come prepared include:
- Latin America: Mexico, Honduras, Venezuela, and Colombia consistently fall in the top 10 high-risk countries for kidnapping. This region’s crime rates are fueled by drug trades and cartel occupation.
- Africa: Certain parts of Africa, like Nigeria and Somalia, have a very high risk factor for kidnapping. Political instability causing a low standard of living often pushes people towards desperation and violent crime in these places.
- Middle East: It’s almost daily that political tension in parts of the Middle East makes the news. Politically-motivated violence and combat being so frequent in countries like Iraq, Pakistan, Yemen, and Afghanistan makes them dangerous for foreign nationals.
How Much Does Kidnap and Ransom Insurance Cost ?
There is a pretty wide range of costs for K&R Insurance because of how many variables need to be accounted for.
An executive seeking kidnap and ransom insurance to Mexico is hardly going to see the same prices as what’s available for kidnap and ransom insurance for aid workers in Honolulu. Premiums certainly wouldn’t be the same for a large corporation that regularly sends employees abroad as it would be for a family traveling for the first time, would they?
About $2000 a year could cover an individual with a $5 million policy for low-risk travel. But, start factoring in how many people are being covered and where they are traveling, and that price could jump pretty significantly. Contacting your agent to help you tailor your K&R insurance needs at the right price for you will help you get where you’re going with some peace of mind.
Your summer travels (or travels at any time of the year) should feel safe and covered in all the ways that make you feel protected. Whether it’s a first time road trip or that adventure out of the country, there are steps you can take.
We are here to answer your questions.
541.482.0831 Ashland
541.857.0679 Medford