Kidnap & ransom insurance (K&R)

Kidnap & ransom insurance (K&R)

Yes, it exists, but we don’t talk about it.

Kidnap & ransom insurance is intended both for private individuals and for companies.

It not only protects against financial losses, but also offers services from leading international consulting companies in the area of crisis management and security.

What is insured?
As well as kidnapping, i.e. the seizing or imprisonment of an insured person for the purposes of ransom demands, this insurance also covers extortion, e.g. ransom demands with the threat of killing or injuring a person, damaging property, contaminating products, revealing business secrets or personal information or destroying data by means of computer viruses. In addition, insurance protection is also guaranteed in cases of false imprisonment or the hijacking of aircraft or other means of transport.

Typical cost components:

  • Ransom and extortion payments
  • Loss at the handover of ransom payments
  • Legal defence costs and compensation
  • Consultancy costs (including as part of prevention measures)
  • Travel expenses, salaries, medical and hospital costs, assessors, interpreters, increased security and surveillance costs, etc.
  • Operational disruption costs

Who provides the insurance?
The number of insurers in Germany is limited. The quality and international credentials of the crisis consultant are what count.

In Circular 3/98, the German Financial Supervisory Authority (BaFin) makes it clear that the particularly sensitive nature of this insurance product requires a confidential approach. Thus, for example, the policyholder is obliged to maintain secrecy in relation to the insurance cover (see the latest explanations in BaFin Journal June 2014).