A new executive order from President Obama that exempts families from criminal charges when they make hostage ransom payments will benefit Americans. The federal policy change will now allow insurance companies to reimburse policyholders for ransom payments. Previously, companies could not make the reimbursements because such payments to known terrorist groups were illegal. Now a family with a loved one doesn’t need to worry about possible prosecution while in midst of working with a breach response firm during negotiations.
Previously, it had been a federal crime to make such payments to named terrorist organizations, although no family member has ever been prosecuted under that law, the president said. The U.S. government will still refuse to make such payments. There are currently more than 30 hostages being held overseas. Since the September 11th, 2001 attacks more than 80 Americans have been kidnapped by terrorist groups and about half of those have died while in captivity.
Kidnap & Ransom Insurance is a two-part coverage. The first part is the actual policy contract, which typically has high limits, a deductible and broad terms and conditions issued by an insurer. The second part is the service provided by a crisis or breach response firm, which partners with the insurance company. They will reply to abductors and must have a broad, almost omniscient knowledge of the environment and hostage takers to be successful. Often they mitigate some of the demands and speed the negotiations. The most important feature of the coverage is the alignment of the insurer with the most experienced breach response providers. Companies often won’t know how to handle the situation, and it’s important to have breach response providers and local people on the ground who are keeping up to speed.
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