What is Kidnap Insurance?

People who are famous or who work in high-risk areas are the most likely to warrant kidnap insurance. One of the biggest benefits is access to a team of professionals who can assist the family or company in negotiating releases, investigating the matter, and bringing things to a safe conclusion. Sometimes, kidnap insurance covers bribery, extortion and carjacking.

It is important to note that sometimes an insurer will void a kidnap policy if it discovers that the employee knows he or she is covered by the policy (this is to prevent collusion). Additionally, if an employee or other covered person is in a country that the U.S. government has declared unsafe, the policy may also be void.

How Does Kidnap Insurance Work?

Let's say John Doe is an oil executive who travels to Country X to negotiate a deal between private companies. He has permission from the U.S. government to be there. When he arrives, a group of terrorists kidnap him and tell his company that they will kill him unless they pay $5 million or hand over company secrets.

John's company has kidnap insurance. It covers the ransom and he is freed. In addition to ransoms, kidnap insurance covers medical costs that result from kidnapping and post-traumatic treatment as necessary. According to at least one source, more than 14 countries have recorded cases of $25 million ransoms in recent years.

Why Does Kidnap Insurance Matter?

Kidnap insurance covers the risk of being kidnapped.