03 August 2011

What is Ransom Insurance?

Troubles come uninvited. You don't need to be rich or famous to be a kidnap target. You could be simply working for a global company or, as many recent high profile cases illustrate, gliding in the wrong direction could be enough to ensnare you. Kidnapping for ransom has become fairly common, and this reflects the fear of an impoverished population that has witnessed the rise of a newly affluent upper class. In 2006, Anant Gupta, son of Adobe Senior Vice President Naresh Gupta, was a
What is Ransom Insurance?
bducted near his home in an affluent suburb of Delhi by two youths riding a motorcycle. The kidnappers had reportedly asked for a ransom of Rs. 10 million. In such cases kidnap and Ransom insurance could be the difference between a fast and safe resolution. Ransom Insurance is now as necessary as medical insurance.

The incident set alarm bells ringing among many corporates, they felt the need for insuring their key executives and their families against kidnap and ransom (K&R). Insurance companies, too, responded with K&R policies in the Indian market for high-profile company executives and individuals.

You can just use some precautions against kidnapping attempts, but you cannot insure that you will not be kidnapped when traveling to some part of the world for some purpose. However, you can afford the security of having a payment, a professional response team that will be there to assist your family or company in the case of kidnapping.

Companies such as INDIA Inc, Tata AIG, ICICI Lombard, National Insurance, Bajaj Allianz and HDFC Chubb have also stepped in, offering similar polices with some even providing psychological counseling in the event of abduction.

Key features and benefits of kidnap ransom insurance

For the policyholder who gets past all these complexities, kidnap/ransom insurance can provide valuable services and guidance in addition to the potential reimbursement for a paid ransom.

Reimbursement of costs associated with a kidnap for ransom

Immediate and unlimited access to specialist response consultants

Personal security and corporate risk mitigation guidelines

Access to travel risk information and safe traveler training

A crisis response team and professional advice

Medical expenses, including psychiatric expenses and expenses for rest and relaxation and cosmetic or plastic surgery after release

Loss due to injury (mutilation, loss of fingers, total disability as a result of a kidnapping, extortion or detention)

Time away from work after release

Travel expenses

The cost of hiring and training new or temporary employees

A reward paid to informants leading to the arrest and conviction of responsible parties.

While in the U.S., some of the biggest multinational corporations have quietly carried insurance coverage against kidnapping for years.The policies not only provide money for ransom, but also pay for fees of kidnap negotiators and psychiatrist's fees for treatment of the victims and their families. The nation's football, baseball and other professional sports teams and Hollywood actors are some of the prominent kidnap insurance clients.

This product has gained high importance and has come as a big relief to families hailing from crime prone cities. The extent of covers and premium varies as this is a highly customized and need-based product and there is no set pattern as such.