Patty

Kidnap and ransom insurance is a legitimate, complicated product that traditionally appeals to businesses with employees who travel frequently. Forty-four percent of kidnappings abroad involve business personnel and government employees, according to Clayton Consultants.

Kidnap coverage has long been a source of ridicule; some view it amongst the superfluous and fantastical policy types, akin to UFO insurance. While others, like Baroness Margaret Thatcher, have expressed deep concerns because of its potential to interfere with governments with policies never to deal with terrorists.

One super important thing to understand is that kidnap insurance does not pay ransom for those who taken into custody against their will. In other words, if you have kidnap and ransom insurance, and your captors are holding a gun to your head looking for cash, don’t use your one call to phone your policyholder.

The major “paradox” that almost always comes up when researching K&R insurance is that you’re not supposed to tell people that you have it. This might seem like no big deal -- next time you’re at a cocktail party and you’re looking to share an interesting bon mot, just skip the kidnap insurance slice of life.

Oh if it were only that simple. In fact, many employers don’t disclose that their employees even have the coverage because that boosts the opportunities for fraud. For example, you could call your friend and have him “steal” you at the Panama Canal and then you could split the money and get rich off the insurance, or so the thinking goes.

Another complication is that the United States government issues warnings about when and where foreign internationals are at risk for kidnapping abroad. If you’re someone who frequently travels to country where kidnappings are relatively high -- Russia, Haiti and Nigeria are common hot spots -- the premiums on your policy will be much higher.

What kidnap and ransom insurance can provide, though, is compensation for you and your employer’s losses should you emerge from confinement.

These services include: lost wages, medical and/or psychological care, recompense due to physical injury, travel expenses and rewards for informants. All of these elements of a kidnap and ransom insurance policy are designed to protect employers financially, in case one of their workers is pilfered against his will.

Ransom insurance is not something to be indulged in by citizens looking for maximum protection from all possible threats. We do not recommend taking out a personal policy unless you are self-employed and spend a great amount of time in dangerous parts of the world. Instead, it is much more common for employers of workers hoping to protect their assets in the case of a kidnapping.

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