In light of recent world events, it comes as no surprise that the kidnap, ransom and extortion insurance policies are being discussed as a way to provide comfort to international businesspersons who travel in areas where kidnappings are common. By way of background, kidnap, ransom and extortion provide compensation for ransom payments, loss of income, medical care and, possibly, interest derived from any bank loans needed for one’s release.
In considering the practical realities involved in these types of transactions, however, kidnap, ransom and extortion insurance policies often place the insured in several difficult situations. An obvious issue for an insured is when or how to notify the insurance company that you are kidnapped. In most situations, kidnappers typically refrain from notifying any government entities and, therefore, an insured is often precluded from notifying its carrier of the kidnapping. As in some policies, if an insured does not notify its insurance company, the company could disclaim coverage. Moreover, involvement by government officials only serves to complicated matters as the nearly universal position is that governments do not negotiate with kidnappers and terrorists. The resulting question is — how does an insured secure the benefit contained in these types of policies?
There have been many articles in recent months analyzing this subject, including the recent Forbes Article by Joshua Gold and Brian Giehl. To read their article, click https://tinyurl.com/kidnap-ransom
As international businesses continues to expand their marketshare in areas of the world that present the threat of kidnapping, it is clear that there will be more discussions on this issue in the coming months.
By Daniel W. Gerber and Jeffrey L. Kingsley