The Kidnap and Ransom Insurance ParadoxGenerally, kidnap and ransom insurance policies are for workers and companies operating in high-risk countries. It may be provided as an inclusion of a company’s insurance package or given as an independent policy by a kidnap and ransom insurance provider. The catch is that usually the insured employee should not know that they are covered by the policy, or else, the policy becomes invalid.
Here’s the catch:
Kidnappers usually insist that authorities should not be informed. They usually notify the family of the victim. Then they issue demands. The family, on the other hand, shall be placed under the dilemma of informing the authorities or giving the demands of the captors. The family or the company of the victim may notify the insurance company, but the problem is the insurance provider may deny that the victim is covered by the insurance. In this case, the life of the victim may be put in danger.
The solution is to opt for an insurance policy that allows you to disclose its existence during dire circumstances. An ideal kidnapping insurance policy is one that requires you to notify the insurance company and the authorities about the kidnapping but only when it is possible and safe to do so. Choosing the right insurance in this case is very important. Going for favorable insurance in the first place frees you from possible serious repercussions.
Another conflict:
The stipulations of the insurance may go against the policy of the US government, which is to not negotiate with terrorists. The American government along with the government of many nations has issued travel advisories for high-risk countries. A kidnap insurance policy may raise deductibles for people working in high-risk countries. Supposing your company operates in a high-risk country and your worker is kidnapped there, the insurance firm may restrict the coverage or, worse, render it void.
What if an employee of your company has something to do with the kidnapping?
The insurance company may cancel the policy in the event that a representative of your company is proven to conspire in the kidnapping. The conspiracy on the part of your employee shall complicate things here. Since this is a possibility, it is important that the policy delineates what happens to the coverage if evidence of connivance is discovered.
Benefits
Setting aside these drawbacks, kidnapping insurance policy can be beneficial in various ways. It entitles the policyholder to reimbursement of all costs incurred as a result of the kidnapping. It also entitles the holder to crisis management and injury compensation. Corporations that hold kidnapping policy may receive reimbursement for the cost incurred of hiring replacement of kidnapped employees. Policyholders may also receive refund of the money given as a reward to informants.
As mentioned earlier, kidnap and ransom insurance is tricky because an employee should not know he is covered by it. Enforcing the policy may also be troublesome during dire cases. However, these conditions are the price of receiving benefits in case you are kidnapped. This form of insurance is highly recommended for those who work in risky areas. However, employers should be careful when looking for an insurance product. Its provisions should be carefully studied.