Forms & Fact Sheets
Kidnap and Ransom Insurance – Basis of Cover
It is important to understand how a kidnap and ransom policy works. A kidnap and ransom policy can be underwritten on a “costs inclusive” or a “costs in addition” basis. The widest cover is the costs in addition basis as this will pay the costs of the crisis management team and ancillary expenses in addition to the policy limit set for the ransom demand itself.
For example if you buy a kidnap and ransom policy with a £1,000,000 limit and the cost of the crisis management team works out at £200,000, then on a costs inclusive basis only £800,000 will be available to pay the ransom, whereas on a costs in addition basis the full £1,000,000 is available to meet the ransom demand.
Another consideration is whether the cover is granted on an “any one claim” basis or an “aggregate” one. An anyone claim basis will provide up to the limit of the policy cover for each incident that occurs during the policy period, whereas under an aggregate cover the policy limit is the total that the policy will pay out in any one year.
So in our example above if the policy had a limit of £1,000,000 on an anyone claim basis and there were two kidnappings, then there would be a total of £1,000,000 available as a ransom payment for each incident, whereas an aggregate policy would provide cover for just £1,000,000 in total for both.
For further information about Kidnap and Ransom Insurance please call K&R Expert on 01825 745 410.