Acts of kidnap on land and piracy on the high seas are now foreseeable events. Businesses, organisations and people who face potential loss from ransom payments, business interruption, litigation and long-term reputational damage need sensitive crisis planning and risk transfer solutions.

Adler Insurance Group specialise in designing policies to protect companies and families living and working in the more remote or high-risk regions of the world. Kidnap and ransom policies can include cover for kidnap, extortion, political detention and hijack.

Financial benefits are extensive, ranging from ransom reimbursement to legal liability, medical and psychiatric care and personal finance loss.

In addition to financial benefits, we place considerable emphasis on risk management. We can provide training and advice to assist clients to reduce the risk of kidnap or extortion as well as offering a specialist crisis response in the event of an incident.

Features of cover can include:
  • Kidnap, extortion or piracy – ransom reimbursement
  • Evacuation and repatriation
  • Disappearance investigation and expense
  • Ransom lost in transit
  • Loss of earnings and loss of earnings arising from computer viruses
  • Hostage crisis
  • Threat – expenses associated without a ransom demand
  • Wrongful detention – all expenses associated with the incident
  • Personal accident – a lump sum for injury or death for those involved
  • Response consultant costs on an unlimited basis
  • All reasonable additional cost limits up to $50m
  • Access to travel risk information.
Typical Exclusions:

Loss of ransom monies due to:

  • Any fraudulent, dishonest or criminal acts of the insured
  • Any confiscation or expropriation by any governmental authority Surrender in any face-to-face encounter involving the use or threat of force or violence, unless for the sole purpose of conveying them to pay a previously communicated demand
  • Any act or alleged act of the Insured considered a criminal offense, unless the insurer determines that the allegations were intentionally false, fraudulent and malicious and made solely and directly to achieve a political, propaganda or coercive effect upon, or to the detriment of the Insured
  • The failure of the Insured to properly procure or maintain immigration, work, residence or similar visas, permits or other documentation

These are just some of the key exclusions/limitations, full details can be found in policy wordings.

Doesn’t insurance against kidnap for ransom encourage the crime?

According to research, only around 1% of kidnaps are covered by insurance, which suggests that kidnappers, when choosing their victim, do not go out to find people who are insured. In fact there is no evidence that the perpetrators would even know if somebody were insured or not. It is a fundamental condition of the policy that its existence should be kept confidential at all times, and the cover can be voided if this condition is breached.

It can also be argued that, far from exacerbating the crime, insurance actually helps to reduce its impact. Prevention and risk mitigation is an important part of the policy, so people with insurance may be more informed and thereby better protected against attack than those without. If there is an incident, employing expertise to deal with it properly will generally also result in a lower ransom payment and more satisfactory outcome than in cases that are handled inexpertly.

Aren’t there some countries where paying a ransom is illegal?

Yes, there are. However, the first objective of our policy is always the safety of the victim and, in all countries, the authorities recognise that victims of kidnapping have a right to life. Most will allow the payment of a ransom on humanitarian grounds.

Evidence clearly suggests that making the payments of ransoms illegal does not reduce kidnappings – it merely drives the activity underground and encourages families to pay illegally behind the backs of the authorities.

The attitude of the Foreign Office – and many foreign governments – is not to pay whatever the circumstances. Isn’t kidnap insurance undermining that?

No. It’s worth remembering that many kidnap cases are settled every year without payment of a cash ransom. Our view is that it would be pointless to try and ban kidnap insurance as this would only encourage companies and individuals to circumvent the ban and make secret payments – which would make it much harder to catch the kidnappers. Co-operating with the law enforcement agencies is a fundamental principle of the cover.

Of course, governments can not be seen to sanction the payment of a ransom for government employees. When taking a government job, the employees are aware of this risk. But in those cases the kidnappers are often seeking a ransom payment that is not cash – for example, the release of leaders from jail or free passage out of a country.

Private companies, or families, do not have such forms of ransom payment to fall back on and have no option but to pay. Failure to do so could have severe consequences. No government should force a company to have an employee killed and no family would accept the argument that one of their loved ones should die unnecessarily.

Given that ransoms will therefore be paid in some cases, it is appropriate that the financial loss can be insured, as with any other risk.

Who decides whether to pay and how much?

The client. Whilst the response consultant – what is this? will offer advice throughout, the final decision always rests with the client. From an insurance point of view, the policy is one of reimbursement. Underwriters do not pay ransoms; they reimburse the loss after the event.

Doesn’t the insurer get involved in the case?

No, the insurer pays the fees and expenses of the response consultant but there is absolutely no conflict of interest. During a case, the consultant works entirely independently of the policy and is under no influence from the insurer whatsoever when it comes to the advice they give. The response consultant’s primary objective is to ensure the safe release of the victim. They obviously also want to minimise any payment made, as an excessive ransom payment may put the same family or other employees of the company at risk from future attack.

Is it only the very wealthy who are potential targets?

No. On the contrary, in recent years kidnappers in many parts of the world have shifted down a level and are abducting less wealthy victims from middle-class families. This is partly due to the fact that the wealthier are taking better security and prevention measures against the crime.

In some parts of the world, foreigners – both expatriates and visiting business travellers – are also seen as a lucrative target, as kidnappers know that any company will be forced to act on behalf of an abducted employee. Recent high-profile cases have also involved tourists and employees of charities as well as other NGOs.

Does the policy provide support and rehabilitation after the incident?

Yes, helping the victim and their family back to normal life is important. The policy offers the services of psychologists to provide support if it’s required. The consultant on the case may form a close bond with the victim’s family throughout the incident. In many cases the consultant will remain in contact and may also provide ongoing advice for some months after the event.

What is the cost of the insurance?

It varies depending on a number of factors: the number of people, where they live, where they travel to and what business they are in.  Each policy is assessed individually on the basis of these factors.

Do you only provide annual cover?

No, insurance is available for short-term assignments ranging from a couple of days to several months.  Three-year options are also available.

The Adler Private Clients team is dedicated to handling your circumstances with the utmost discretion and professionalism.

As soon as you get in touch with us, your private client experience will begin, including advice and support throughout the duration of your policy. So, if you need to amend your policy details, make a claim or simply check what you’re covered for, our team is on hand to deal with your request and put your mind at ease.

Adler Private Clients is different from a regular insurance broker in that our years of experience in dealing with insurance for wealthier individuals has given us the knowledge and expertise to hone our services, creating a customer experience that is up there with the best.

Our team of client executives are on hand to meet your requirements. You can reach them on 0121 764 5500. Call us or make an enquiry today to see what we can do for you.

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