K and R Policy
Kidnap and Ransom insurance that provides coverage for ransom payments, crisis response, and related expenses when executives or family members are kidnapped or extorted. This specialized coverage is typically purchased by high-net-worth individuals and multinational corporations.
Example
“The Fortune 500 company purchased a K and R policy to protect their executives traveling to high-risk countries for business operations.”
Memory Tip
K and R = 'Keep and Rescue' - the policy helps keep you safe and rescue you from dangerous situations.
Why It Matters
With over 40,000 kidnappings reported globally each year, wealthy individuals and business executives face real risks that could result in millions in ransom payments. These policies also provide expert crisis management services that significantly improve the chances of safe resolution.
Common Misconception
People often think K and R policies encourage kidnapping by making ransom payments easier, but statistics show that having professional crisis management actually reduces both the likelihood of incidents and the amounts demanded by criminals.
In Practice
A tech CEO purchases a $5 million K and R policy for $15,000 annually. When kidnapped during a business trip, the policy covers the $2 million ransom payment, $500,000 in crisis consultant fees, $50,000 in family travel expenses, and $200,000 in medical and psychological care. The total claim of $2.75 million would have devastated the family's finances without coverage.
Etymology
Abbreviated from 'Kidnap and Ransom,' this insurance type developed in the 1930s but became more common in the 1970s as international business travel increased and kidnapping became more prevalent.
Common Misspellings
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Related Terms
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