K&R insurance policies typically cover the perils of kidnap, extortion, wrongful detention, and hijacking. K&R policies are indemnity policies – they reimburse a loss incurred by the insured. The policies do not pay ransoms on the behalf of the insured. Typically, the insured must first pay the ransom, thus incurring the loss, and then seek reimbursement under the policy.
- Ransom monies - Money paid or lost due to kidnapping
- Transit/delivery - Loss due to destruction, disappearance, confiscation, or wrongful appropriation of ransom monies being delivered to a covered kidnapping or extortion
- Accidental death or dismemberment - Death or permanent physical disablement occurring during a kidnapping
- Judgement and legal liability - Cost resulting from any claim or suit brought by any insured person against the insured
- Additional expenses - Medical care, severe disruption of operations, potential damage to company brand, PR counsel, wage and salary replacement, relocation and job retraining, and other expenses related to a kidnapping incident.
