Thomas W. Harvey, President and CEO of Assurex, the network of independent risk management and commercial insurance brokerages, warned that U.S. firms doing international business were inadequately covering the dangers to their employees from kidnappings and ransom demands, by not providing sufficient insurance coverage.
“In spite the fact that Americans with K&R insurance are four times more likely to survive a kidnapping than non-insured travelers, only 60 percent of Fortune 500 companies and fewer small businesses carry kidnap and ransom insurance coverage,” according to Assurex.
The policies cover a number of details. Besides ransom payments, which average around $2 million, coverage includes extortion payments, the services of professional security consultants and negotiators – which may actually be the most useful aspect of the coverage – the theft of ransom money, deaths and injuries, transportation and payments to informants. Many policies also offer counseling and cover the time off work while a victim is recovering.
“Companies that balk at K&R premiums ($4,000 for $1 million worth of coverage for a two-month stay in Colombia), should bear in mind that K&R insurance is far less expensive than a ransom payment or a murdered executive,” Harvey stated.
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