Axis Capital Group Insurance

Facts on Ransom Insurance: Is Kidnapping Impossible?

As we have reiterated a couple of times, you can insure almost everything nowadays. As a partner with Lloyds, Axis Capital with a group of insurance and reinsurance companies from the main base in Bermuda to America, Europe, Australia as well as Asia with its branch in Singapore, have been entertaining unique insurances over the years of our operation. However though, we must admit that there are indeed absurd insurance policies that clients do exist.


Ransom Insurance has once been considered unique but right now, many more people are taking advantage of it from already developed states in the United States to developing cities in Asia such as Singapore, Tokyo, Japan, Jakarta, Indonesia and Kuala Lumpur, Malaysia since there are a lot of fraudulent acts in society that comes as risk to many well-off people. Many though, continue to question insurance company like us on what the real purpose of ransom insurance really is. Here are the facts that you can review regarding this specific insurance:


You may have kidnap, ransom and extortion insurance and not even know it. It is best to consult your agents regarding this. You may have it and know it but not be able to use it. You may very well need it–pirates, drug dealers and other opportunists around the world.


Kidnap/ransom coverage can come as part of a corporate insurance portfolio or as a stand-alone policy. It can include coverage for guests, spouses and relatives, or just a single individual. In any event, it often begins with a paradox and ends with a Catch-22.

The paradox: With many policies, a covered employee (or employees) cannot know that the coverage exists for them or the corporation. If they are aware that it exists, the policy may be declared void.


The Catch-22: In most kidnappings, the kidnappers demand that neither the authorities nor anyone else be notified. Balancing the demands of the kidnappers with the desire and need to contact the authorities is tough enough; imagine having also to decide whether or not to contact the insurance company. If you don’t, the company may try to deny the coverage. If you do, you may jeopardize the employee’s life. (Most kidnappings do not result in death; they result in the payment of a negotiated ransom.)


One solution is to opt for policy forms that require only a reasonable effort to see that awareness of the coverage is restricted as much as possible. Such a clause provides the policyholder latitude to use reasonable discretion in determining where and when to disclose the fact that the coverage is in place. Similarly, go for a policy that requires that you notify the insurance company and law enforcement officials about a kidnapping only when it’s safe and practicable to do so. Obviously, any insurance policy term that has the potential to further imperil a victim’s life should be deemed unenforceable. Selecting and negotiating more favorable provisions for these circumstances is far better file a complaint court over enforceability. Ransom Insurance is not impossible to claim. It just takes a little more communication to do so.