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Kidnap, Ransom and Extortion Insurance – What It’s About?

With strong-worded warnings from the US State Department about travel to Mexico that has been added to their list of no-go places, businesses that send employees abroad need to rethink strategies to protect their interests and those of the workers they contract to foreign lands where kidnapping and the ransom and extortion that follows are somewhat commonplace.

Insurance underwriters counsel commercial enterprises engaged in overseas or across the US borders. “Your employees are definitely at risk for kidnapping,” they cite as they base their findings on statistics. One of the key tips to preventing abduction is for executives in other places to try to be as inconspicuous as possible.

The insurance companies tell traveling businessmen to be cautious when in public. Wearing a business suit will catch the unscrupulous guy’s eyes so it is best to dress more casually. Avoid carrying expensive briefcases and don’t allow multiple electronic devices to be out in the open. The bad guys are just waiting for the signs that there’s a business person from the US that they can grab for their own interests.

In insurance terms, ‘express kidnapping’ is the act of quick abduction of a businessman or woman that typically occurs within the airport. Kidnappers seize their victim and push him or her into a waiting vehicle to be whisked off. The kidnappers then take their victim to several ATM machines where the victim is forced to withdraw money. The scenario is repeated again and again for 2 to 3 days before the plot is uncovered. It is only then that the poor victim is released from captivity.

Should the kidnapping perpetuators believe that the victim is a prestigious personality in his or her company or corporation, the episode can spiral into a dire life-threatening situation, where the victim’s safety is contingent on receiving ransom from the employer and/or the family members.

Insurance Coverage – the four agreements of kidnap and ransom coverage

a) Kidnap and Ransom and Extortion Insurance: This covers a direct loss

b) Kidnap and Ransom and Extortion Insurance: This covers associated expenses

c) Detention or Hijack Insurance: When the victim is incarcerated as he or she travels in a vehicle, plane, or any type of watercraft for purposes other than ransom of money or property

d) In-Transit Delivery of Property: This covers the kidnap ransom of cash and property that the traveling kidnapped victim has on him or her.

For an in-depth discussion about Kidnap and Ransom Insurance speak to an experienced independent insurance agent.