Unfortunately, kidnapping for ransom incidents have been on the rise, globally. The kidnapping of foreign travelers is prevalent in places where there is extreme poverty and in places where there is a prevalence of guerrilla and drug cartel activities. It can be a very profitable business for the perpetrators.
Kidnappings for ransom continue to be a concern for foreigners traveling overseas for business. According to Risk & Insurance magazine, the countries that have the highest frequency of kidnap and/or extortion incidents include Brazil, Columbia, Ecuador, India, Mexico, Nigeria, the Philippines, Russia, Venezuela, and South Africa.
The prime targets of kidnap and ransom schemes are high-net-worth individuals and their families, professionals traveling abroad, celebrities, tourists, journalists, and aid workers. High-net-worth individuals are most likely to need Kidnap and Ransom insurance, although it may be appropriate for other individuals as well, depending upon their personal situation.
The purpose of Kidnap and Ransom insurance is to save you from having to give up your most important assets in order to protect you or your family members. Kidnap insurance provides negotiators as well as eventual reimbursement. However, kidnap victims must pay the ransom out of their own assets before it can be refunded.
What Kidnap & Ransom Insurance Typically Covers
Kidnap and ransom insurance is usually a standalone policy, covering the costs related to:
- Kidnapping and ransom
- Wrongful detention
Coverages usually includes:
- Extortion payments
- Loss of income
- Ransom payment
- Negotiation costs
- Public relations costs
- Defense costs
- In transit money delivery coverage
- Judgment settlements
- Consultant costs
In addition, a typical K & R policy covers harm to the kidnap victim and his or her family including:
- Death and dismemberment benefits
- Medical costs for injury
- Psychiatric treatment after the victim is freed
Americans should avoid traveling to countries that appear in red on the State Department’s travel advisory map or if the U.S. government has imposed sanctions on a country because it could invalidate their K & R policy.
The Protection you Need
Some K & R policies are available for less than $1,000, but the cost of kidnap insurance coverage is dependent upon the type of coverage, benefit amounts, destination countries, and the number of individuals covered by the policy. The bottom line is that kidnap and ransom insurance could be well worth the expense in the case of an actual kidnapping; a K & R claim can quickly run into hundreds of thousands, if not millions of dollars.
Without these types of policies, high-net-worth individuals could face huge financial losses if they’re forced to use their personal assets to cover the fallout from a kidnapping, extortion, and ransom demand.
Kidnap and Ransom insurance should be one of your asset protection strategies to be considered when developing a plan to manage and mitigate potential risks and to protect your assets and legacy.
At the Jeffrey M. Verdon Law Group, we have over 30 years of experience when it comes to providing customized asset protection strategies for high-net-worth individuals.
Contact the Jeffrey M. Verdon Law Group to discuss assets protection plans.