Kidnap and Ransom (K&R) insurance coverage is broadening in response to evolving business travel and cyber extortion risks.
Increased terrorist activity, worldwide civil unrest, and outbreaks of the Zika and Ebola viruses have brought the safety and security of employees into sharp focus in recent years.
Companies are now taking a much more pro-active approach to protecting employees when they are working or travelling abroad. This has resulted in an increase in enquires for K&R insurance, which can help companies prepare and protect employees caught up in a crisis.
The K&R insurance market is extremely competitive, with rates holding steady at relatively low levels. This has encouraged K&R underwriters to broaden coverage significantly in recent years, in part to meet the changing needs of corporates as well as the rapidly evolving security risks we are facing today.
For example, K&R insurers have adapted policies to cover short term hostage crises, like the 2014 siege at a coffee shop in Sydney, Australia. They have also developed cover for lone shooter or terror attacks, which have traditionally fallen outside the scope of K&R cover.
K&R insurers are also receiving more enquiries for emergency evacuation cover, which can cover the expense of repatriating employees affected by a crisis like a terrorist attack, civil unrest or a natural catastrophe.
Cyber extortion is another area of growing interest for clients. Certain cyber extortion risks are covered by K&R insurance and offers ground up cover (no deductible) and access to professional cyber response consultants. Some underwriters have moved however to limit cyber extortion cover in light of significant claims in the K&R market; for example, limiting business interruption cover for cyber extortion.
Moving forward, K&R underwriters are looking to offer cyber extortion cover as a standalone offering with broader limits of indemnity and more specialised response consultants providing emergency support when a cyber-attack occurs. The benefit of this is that clients can then rely on this policy as a primary, ground-up cover thus filling the deductible gap that a standalone cyber policy contains.
Topical tip for buyers
It is worth considering the broader coverage offerings of K&R. You can work with your broker to identify your key ‘people’ security risk and concerns and build out a policy that responds to these issues. Active shooter, hostage crisis, cyber extortion and emergency evacuation cover are all perils which can be covered by a bespoke K&R policy.
For further information, please contact Lucy Higgins, Associate on +44 20 7528 4253 or email firstname.lastname@example.org