Kidnap Insurance: Coverage, Claim & Exclusions

Updated: 05-09-2022 09:12:39 AM

Unfortunate incidents like kidnapping and hijacking can be a big emotional burden. Such events can cause financial loss as well due to ransom payments, adverse publicity and long-term damage. Thus, a kidnap insurance protects from extortion, kidnapping, hijacking, etc.

What is Kidnap Insurance?

A kidnap insurance protects individuals or corporate from adverse situations like kidnapping, extortion and hijacking. It typically covers death due to ransom, extortion, loss of payment in transit, settlements, defence costs and other related expenses. Some insurance policies also cover additional expenses and legal costs incurred to gain the release of a hostage.

What all Kidnap Insurance Covers?

Kidnap insurance covers the following contingency:

• Ransom/extortion payment
• Loss-in transit money
• Death or bodily injury
• Hijack and extortion against products, property, proprietary information, computer system & people
• Crisis management
• Negotiation services
• Emergency response help-line

Also Read about: Civil Engineering Completed Risks Insurance

How Kidnap Insurance Functions?

An insurance company provides financial and other resources to the family or employer in resolving a kidnapping case. Let us understand how it functions.

• Assess the risks and dangers associated with your and your family members’ life in terms of kidnapping and extortion
• Decide the coverage amount after analysing your affordability and other responsibilities and requirements
• Family members and others will have to cooperate with the company in every matter related to the insurance, including aspects like attending the hearing, trials, giving evidence, or any other proceedings
• After a survey, if approved, the claims would be paid to the nominee, with a receipt of proof from the company proving the loss

Eligibility Criteria

Kidnap insurance can be taken by people who consider themselves to be a target for kidnappers. NGOs, ship owners, managers or individuals and companies operating in unsafe areas can also purchase this policy for their employees and their families.

Claim Process for Kidnap Insurance 

In an unfortunate event of kidnapping or extortion, the insurance company should be informed immediately and the below mentioned claim process should be followed:

• In case of incidents like kidnap, extortion or wrongful detention, a relative of the insured must immediately report to the insurance company
• Details like identity of hostage, details of all communication made with kidnappers, demands if made any, details of all significant events, must be provided to the insurance company to evaluate the coverage
• Oral as well as a written notice about the incident should be provided to the insurance company with the date and time of the incident, along with the latest updates
• If approved, the claim amount will be paid as per the valuation

Documents Required For Claim Process

Following are the details to be provided to the insurance company to evaluate the claim:

• FIR copy
• Details of all significant events
• Details of all communication made with the kidnappers
• Method used by kidnappers to transmit their demands
• Other documents required as per the need of the case

Exclusions under Kidnap Insurance

Every kidnap insurance provider has its own set of policy exclusions. These cases are not covered by the insurance provider:

• Any fraudulent, dishonest, or criminal act committed for obtaining kidnap insurance money will not be covered
• The policy claim will be null and void if the incident is found to be fraud, misrepresented or in case of any willful concealment of facts
• Any consequential loss in business or at an individual level resulting from any unfortunate event will not be covered under this policy
• If an individual travels to a country outside India or outside the mentioned territory, such as Iran or Syria, where the United States has imposed sanctions, coverage will not be considered

Companies Offering Kidnap Insurance In India

At present, only 2 insurance companies provide Kidnap Insurance in India. They are:

• HDFC ERGO
• SBI General

Advantages of Kidnap Insurance Policy

Let us look at some of the advantages of kidnap insurance plan:

• Provides cover against kidnapping, extortion or allied risk threats
• Any person or business, company owner, employees and their family members can be insured under this policy
• There is a 24-hour emergency helpline service available for reporting such unfortunate events immediately
• Kidnap insurance plan covers the expenses incurred for investigating the extortion threats even if no monetary ransom demand was made
• In some cases, it covers medical and travel-related expenses also
• If a policyholder goes missing during the policy period and if his/her body is not found within 36 months from the day of the disappearance, the nominee gets the death benefit

FAQs

Q. Is Kidnap Insurance only for an individual or the entire family can be covered under this policy?

Kidnap insurance can be taken by an individual along with his/her family.

Q. What all subsidiary expenses are covered under this insurance policy?

Some additional expenses that are covered include travel cost, hotel cost, or medical expenses arising out of kidnapping, extortion.

Q. What is the waiting period for claiming the loss out of business interruption?

As per certain leading insurance companies, the waiting period for all business interruption loss is at least 6  hours.

Q. What is delivery coverage?

It insures the money used to pay a ransom demand.

Q. Is there any minimum age required to avail kidnap insurance?

No, there is no such bar to avail kidnap insurance.