Kidnap & Ransom
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BENEFITS AND SERVICES WHICH ARE AVAILABLE:
Ransom Money
Informant Money
Crisis Management Services
Accidental Death
Legal Liabilities
Rehabilitation
Personal Security Consultation
Reward Money
Negotiation Services
Family Counselling
Loss of Ransom in Transit
Medical Services and Emergency Evacuation
Interpretive and Forensic Services
Business Security Consultation
Kidnap insurance provides numerous benefits and services to the policy owner and the insured. Most people believe that kidnap insurance is only a ransom benefit. The following points are offered to provide you with a better understanding of this type of coverage.
Crisis Response Teams
Although ransom benefits appear to be the primary benefit, the core benefit of any plan is the Crisis Response team that will assess and advise the family or business.
It is essential to have a response team that is experienced with both the handling of incidents as well as the local political environment.
Some response companies hire their services to anyone. Some are retained by an insurer. Some response firms are principally investigation firms while others have anti-terrorist and hostage negotiations backgrounds. Some response teams will assist the family or business while others do not want any interaction with the insured’s family or business.
The EPIC series retains one of the most experienced security firms in the industry, who respond with immediate deployment. The Crisis Response Team interacts with and advises the family and/or the business. Members of The Crisis Response Team have diverse backgrounds including military and FBI training.
Aggregate Basis vs. Inclusive Basis
Some plans pay the expenses of The Crisis Response Team directly from within the benefits available. Therefore, if you purchase a $1 million ransom benefit and the expense of the response team is $250,000, an aggregate basis benefit plan will provide only $750,000 of ransom reimbursement.
The EPIC series provides the expenses of The Crisis Response Team on an inclusive basis, thus, in our example above, there will always be the $1 million ransom benefit available regardless of the cost of The Crisis Response Team.
Ransom Benefits = Reimbursement
Ransom benefits, regardless of the policy issuer, will always be on a reimbursement basis only. Why? There are two reasons:
1) It is Illegal to insure an unlawful event. As an example, you cannot insure an act of vandalism, but you can insure expenses incurred as a result of the act of vandalism.
2) Negotiations. A person may have a net worth of one billion dollars. If the money is all in real estate except for $50,000 cash, in the absence of insurance, what would a family do? Raising the $1 million would necessitate selling property, which could take months. Negotiations are often hastened by access to “quick cash” even if it is less than the actual demand amount. If a person has direct access to the full ransom amount, negotiations may be compromised.
Petersen International Underwriters
Petersen International Underwriters, in addition to being a Lloyd’s Correspondent, is a member of the Overseas Security Advisory Council, a part of the United States Department of State. Information is shared between members to track trends and to analyze terrorist and extortionist activities around the world. Members of Petersen International Underwriters are also Level III Certified in Homeland Security.
A KIDNAP AND RANSOM INSURANCE PLAN
KIDNAP INSURANCE: What is it? What Do I need to know?
This is not intended to be a complete outline of coverage.
Actual wording may change without notice.
Epic_050106 Corporate and personal security has improved dramatically. However, the use of kidnapping or extortion to gain access to industrial secrets, to make socio-political statements, or for monetary purposes, continues to rise.
Contingency Problems Are Increasing:
• 70% of companies located in Russia have faced extortion demands in the last five years.
• Kidnap demands of up to $100 million have been made in recent years in Mexico, Argentina and Costa Rica.
• Between 1991 and 1996, kidnapping incidents involving a demand for ransom have almost doubled around the
World. In 1996, over 1,354 incidents involving a ransom demand were reported.
• Global markets and access make business around the world practical and profitable. These same factors all add
Additional risk, especially in countries where the economy is not very strong or is unstable.
• An article in the London Financial Times reported that with the increase in electronic security measures at businesses
and homes, industrial espionage can be accomplished easier through the abduction of family members of individuals who can access the desired information.
Petersen International Underwriters issues Kidnap & Ransom Coverage insured by Lloyd’s of London. The Crisis Response Team is a premiere provider of political risk assessment, crisis management, security management and investigative services. Under its arrangement with the Lloyd’s underwriters, The Crisis Response Team may provide three services to our clients:
Intelligence
• Expert analysis of political and security risks worldwide, provided on-line or in hard copy.
Prevention
• Protection of personnel and property through risk analysis, on-site surveys, security reviews, simulated incidents and establishment of non-disruptive defensive routines.
Response
• The Crisis Response Team has competent and experienced personnel stationed within four hours travel time of any spot on Earth.