KIDNAP, RANSOM AND EXTORTION COVERAGE

What are Insured Events under a typical policy?

Kidnap, Ransom and Extortion policies are designed to protect corporate and personal assets in the event of a crisis event such as abduction or kidnapping, including property damage extortion. The policies are also designed to respond to wrongful detention of insured persons as well as the hijacking of aircraft, motor vehicles or waterborne vessels on which an insured person may be traveling. The policies include aspects of death and dismemberment coverage as well.

Who is typically an Insured Person?

Policies afford coverage to Directors, Officers and employees of the corporation purchasing the policy and are extended to guests, relatives and residents in the households of an insured person. The definition of employee will typically not extend coverage to independent contractors, volunteers, or students. Some corporations chose to narrow the definition of insured to include certain executives only. Some carriers will be more willing than others to amend the definition of insured to meet the needs of an applicant.

What Claim Expenses are covered?

A broad KRE policy will provide coverage for the following reasonable and necessary expenses or costs incurred by the insured directly as a result of an insured event:

Standard Policy Exclusions

General Conditions:

What are considered global hot spots for KRE activity?

Sample media reported incidents of extortion, kidnapping and wrongful detention from around the globe:

Congo , 23 May 2005: According to local authorities, an unknown number of gunmen attacked a group of villages located about 50 mi/80 km west of the Congolese town of Bukavu, killing 18 people, injuring more than a dozen and taking off with about 50 hostages. The provincial governor said survivors blamed Rwandan Hutu rebels and a band of gunmen called Rastas, who are linked to the Rwandan rebels, but also include Congolese elements. (voanews.com, 25 May 2005)

Nigeria , 28 May 2005: The House of Representatives committee chairman for appropriations escaped a kidnapping attempt after a group of five armed men stormed his car in Makurdi and kidnapped his driver as they were leaving the hotel located along the Makurdi-Enugu road. The kidnappers later contacted the lawmaker and demanded N5 million for the release of his driver. Unofficial sources said negotiations with the gunmen on the release of the driver continued throughout the night until he was finally released without any ransom being paid. (allafrica.com, 1 June 2005)

Afghanistan 21 May 2005: Taliban militants kidnapped a Turkmenistan national during an attack on a convoy of trucks passing by the southern province of Zabul. Following the attack, a Taliban spokesperson claimed responsibility, stating, “We destroyed the trucks with rockets, and also killed two Russians.” The convoy was carrying mineral water from Turkmenistan to Kabul, the Afghan capital, via the Kabul-Kandahar highway. (Xinhuanet, 22 May 2005)

India, 9 May 2005: A medical doctor who is also an assistant professor at the Regional Institute of Medical Sciences (RIMS) in Imphal, the capital of Manipur state, was abducted from his house by armed members of the Human Rights Protection Guild (HRPG) who later demanded an Rs 30 lakhs ransom from the institute employing the victim with a 48-hour deadline. According to reports, the director of the institute stated that such funds are not available and appealed to the kidnappers to free the man on humanitarian grounds. Following the abduction, the academic staff and doctors of the institute went on strike, affecting numerous patients. (kanglaonline.com, 11 May 2005)

Malaysia , 21 May 2005: A school girl, the daughter of a fish merchant, who was abducted by three kidnappers outside her home in Taman Permas Jaya on May 16, was released by her abductors after her family paid ransom. The kidnappers, believing her family was wealthy, initially demanded a ransom of RM6 million for her safe release. After negotiations the ransom was lowered to RM20, 500. Immediately after the ransom was dropped off, police officers ambushed the abductors and managed to capture two of them but the third escaped. (New Straits TimeOnline, 24 May 2005)

Philippines , 27 May 2005: A 58-year-old businessman, the owner of a restaurant and a store, who was kidnapped in Binangonan, Rizal, on 3 May, was found dead in the nearby town of Angono. The body was already decomposing when it was found, suggesting that the victim had been killed some time ago, although his family had paid a ransom of P450, 000. Three armed men kidnapped the victim outside his restaurant and initially demanded a P5- million ransom, but later lowered their demand. According to police officials, the family refused to cooperate with them. (The Philippine Star, 05/30/2005)

Bulgaria , 17 May 2005: Three masked kidnappers abducted a businessman of Syrian origin while he was walking down a street in the town of Bankya, located approximately 6 mi/10 km away from Sofia. Witnesses stated that the victim was forced into a black Audi. Police officers sealed off all roads going into and out of Sofia in an attempt to intercept the stolen car and the abducted man. Police officials said the victim and his brother run a car service station in Sofia but refused to disclose more background details due to the ongoing investigation. (Sofia Morning News, 18 May 2005)

Iraq , 15 June 2005: The Australian prime minister announced that the 63-year old Australian engineer who was abducted in Iraq in late April has been rescued in a military operation. The PM stated that the victim was recovered in Baghdad and that the operation was carried out by Iraqi forces, in co-operation in with U.S forces. Australia sent an emergency response team to Baghdad after the victim, who is married to a U.S. citizen and lives in the United States, was seized by a rebel group calling itself the Shura Council of the Mujahideen of Iraq. (BBC News, 15 June 2005)

Lebanon , 9 June 2005: A 3-year-old boy was released unharmed less than a day after he was kidnapped and police officials detained three suspects, including the family’s driver. The driver told the family that the kidnappers intercepted his car as he emerged from the garage, pointed a gun at his head, grabbed the boy and drove away in another vehicle. Following a US$5,000,000 ransom demand, the victim’s father, who owns a financial and economic consultancy in Kuwait, contacted police officials who determined where the kidnappers were located. The kidnappers realized they had been exposed and released the boy in the Bourj el-Brajneh district, near Beirut airport. (AP, 10 June 2005)

United States , 20 May 2005: Police officers in Columbus, Ohio, arrested three men who kidnapped a 1-year-old child as they arrived to collect a US$80,000 ransom from the child’s family. The masked and armed men broke into a house at around 0430 local time, demanding money from the owner. The owner, who did not have any money, suggested that her brother might have some money. The men then drove their victim and her son to her brother’s house, which was located a few blocks away, but he was not at home. The men then abducted the baby and demanded a ransom. The woman called police authorities, who in turn alerted the FBI and other law enforcement agencies. Police officers monitored several homes in Columbus, Fort Benning and Russell County throughout the day and officers and agents in unmarked cars tailed a vehicle from one of the locations driving to the drop spot. The baby was found unharmed. (Ledger-enquirer.com, 21 May 2005)

United States , 9 June 2005: A group of armed kidnappers lured a tow truck driver to a remote area north of Mission, in Hidalgo County, Texas. As the man arrived at the meeting place he was attacked and forced into another vehicle. According to the county sheriff, the kidnappers released a passenger who was traveling with the truck driver and ordered him to deliver a message to the victim’s family along with a US$500,000 ransom demand. Authorities said the kidnapped driver was expected to go to trial on federal drug charges, but it is not known if that was a motive behind the abduction. (newschannel5.tv, 9 June 2005)

Brazil , 28 May 2005: According to reports, a female college student who was abducted late on 31 May 2005 in Alphaville, Sao Paulo, managed to escape after causing the vehicle she was being transported in to crash. The victim reportedly was abducted while driving her car and forced to drive along the Fernao Dias Expressway, which connects Sao Paulo with Minas Gerais. Near Sao Sebastiao da Bela Vista, the victim asked to use a public restroom and left a note for a gas station attendant, who contacted police officials. The victim later caused the vehicle to crash into a rock. The criminals then locked her inside the trunk of the crashed vehicle and fled. Two hours later authorities found the victim. (Dgabc, 3 June 2005)

Brazil , 2 June 2005: Anti-narcotics police officers thwarted the kidnapping of a nine-month-old baby in northern Sao Paulo, which was planned by members of the Primeiro Comando da Capital criminal organization. The plan to abduct the baby was discovered after police officers investigating drug traffickers intercepted several phone calls in which a former nanny was delivering information to members of the criminal organization, one of them currently imprisoned for drug trafficking, kidnapping and armed robbery. The nanny was aware that the baby’s family was saving money to buy a house, and that money was going to be requested as ransom. Four criminals were apprehended while entering the home of the baby’s family. (geral.dgabc.com.br, 2 June 2005)

Brazil , 5 June 2005: A bank treasurer, his wife and daughter were abducted and held hostage in eastern Sao Paulo for approximately five hours and released on 6 June at approximately 0100 local time. Police reports state that the victims were released after police officers arrested a teenager who was watching five other members of the family. The criminals intended to force the bank employees to help them steal money from the bank, which is located at Itaim Paulista. A homeless man was also held hostage as he witnessed the abductions. (oglobo.globo.com, 6 June 2005)

Colombia , 8 June 2005: According to reports emerging on 8 June 2005, an alleged rebel group abducted four Colombian tourists while they were traveling in the La Guajira department, located on the border between Colombia and Venezuela. The tourists were traveling in an SUV to Santa Marta, Colombia, when armed men intercepted them. Police reports did not specify the date of the abduction. (panodi.com, 9 June 2005)

Colombia , 8 June 2005: Police officers shot dead four alleged kidnappers and rescued unharmed a 35-year old businessman, who was held hostage in a mountainous area in Santa Fe de Antioquia. The victim, who was kidnapped on 28 May from a ranch in the same area by a group of men wearing military uniforms, was found tied to a tree. The kidnappers, part of a criminal gang, initially demanded a 700 million pesos ransom. (elcolombiano.terra.com.co, 9 June 2005)

Haiti , 24 May 2005: A Canadian national residing in Haiti was released a day after he was kidnapped in Port-au- Prince. A police spokeswoman stated that the victim’s family negotiated directly with the abductors and was able to gain his release. The Canadian became the third foreign victim, after a Russian and an Indian, in a wave of kidnappings in recent weeks that until recently were restricted to Haitian victims. On the same day, a Haitian physician, the daughter of a longtime faculty member of a medical school in Port-au-Prince, was the victim of a daylight kidnapping in the capital. In general, kidnappings of Haitians or of foreigners last only a few hours, after the payment of a ransom between a few hundred dollars and a thousand dollars. (AFP, 26 May 2005)

Mexico , 25 May 2005: A Mexican criminal gang has freed four U.S. citizens whom it held captive for almost three weeks in Nuevo Laredo. The four residents of Laredo, Texas, ages 24 to 28, were abducted after they crossed the border into Nuevo Laredo on May 7 to take advantage of late-night bars in the city. A senior FBI agent stated that the four were released unharmed, but he declined to say whether any ransom had been paid for their release. Since August 2004 at least 32 U.S. citizens have been kidnapped or simply disappeared in the city, and 12 are still missing, according to the FBI. (Reuters, 27 May 2005)

Nicaragua , 10 June 2005: Nicaraguan police officers are investigating the kidnapping of a nephew of a journalist who was murdered on 10 February 2004. The victim was intercepted by unidentified suspects in northern Managua and forced to get into a vehicle. The criminals initially demanded a ransom of US$25,000 but released their victim three hours later without the ransom being paid, alleging that the victim’s father had created a great deal of commotion and alerted authorities. Before releasing the victim, the criminals vowed to closely monitor him and his family and vowed that next time he was going to be killed. (univision.com, 10 June 2005)

Venezuela , 6 June 2005: Authorities in Tachira State found the vehicle of a man who had been reported missing by his family in Merida State on 5 June. According to police reports, the victim, the owner of a used car dealership in Tovar and a ranch in Nariño de Tovar, was last seen with a friend in the town of Amparo de Tovar on 3 June. Although no ransom demand has been made, authorities believe that the man was kidnapped. (panodi.com, 6 June 2005)

Venezuela , 6 June 2005: During a shootout, police officers killed two alleged kidnappers who were attempting to pick up a ransom from a kidnap victim who had already been released. The suspects were part of a gang that abducted the businessman on 30 March, while he was leaving the offices of his company, located in the El Llanito neighborhood of eastern Caracas. Authorities reportedly rescued the victim in Valles del Tuy after receiving a tip. The criminals were demanding that the victim pay them 150 million bolivars, but later agreed to 5 million bolivars. They also threatened to kidnap another member of the same family if the victim failed to pay the ransom. (eluniversal.com, 8 June 2005)

Russia , 26 May 2005: Two unidentified men abducted the son of the chief financial officer of Russia’s leading car manufacturing company. The abductors forced the man into a car near the Passage shopping center in one of the districts of Togliatti in western Russia and sped away. No demands have been received as yet from the abductors. (mosnews.com, 28 May 2005)

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