Kidnap And Ransom Insurance

Russell Crowe and Meg Ryan starred in a movie titled “Proof Of Life” back in 2000 in which Ryan’s husband is kidnapped by a group of guerillas who demand a ransom in exchange for his safe return. The husband’s company have a “K&R” policy (Kidnap and Ransom insurance policy) and cue Russell Crowe, the K&R ransom consultant who’s job is to advise Meg Ryan on the routine and process of dealing with kidnappers.

You may have seen the movie thinking that there is some seriously creative writers in Hollywood to come up with such a plot. Well, there are great writers in Hollywood, but Kidnap and Ransom insurance is not a Hollywood invention – it is readily available through many insurance provides around the world.

K&R insurance covers the entire family of anyone named (or included) in a K&R policy for losses due to ransom payment, and a few other claims:

  • Loss of ransom in transit (in case someone tries to steal the ransom money before it is delivered to the kidnapper)
  • Interest on emergency loans required to secure the cash for the ransom
  • Dental Care (since the kidnapped person may be missing some teeth upon return)
  • Plastic Surgery (same as above, except replace “teeth” with “ears” and the like)
  • Fees of the Response Consultant (a third party consultant network)

Yes, you get your own Russell Crowe to help your family negotiate with the kidnappers. The role of the Kidnap Response Consultant is a bit less hands-on than in the movie (in more ways than one), as they never communicate on your behalf, but rather advise behind the scenes as their existence will tip-off the bad guys that someone else might be paying the ransom through insurance and hence they may take their extortion to a newer level.

One quirk about K&R Insurance: anyone covered by a corporate policy is not allowed to know that they are covered, or that the company has K&R insurance coverage.

Preet Banerjee
Preet Banerjee an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
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