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Understanding the Mechanics of Ransom Insurance

ransom insurance pa

Companies that send employees overseas for business purposes expose themselves to risks in the event that the workers become hostages of a hostile group in a foreign country. Businesses should have a ransom insurance plan in place for such a scenario. Ransom insurance in PA is complicated but necessary.

Non-Disclosure to Employees

In most cases, companies are prohibited from informing employees that there is a ransom insurance policy in place when they travel. This is necessary to prevent fraud. Employees who know they are covered may fabricate a hostage situation or collude with their kidnappers. If you discuss the policy in any capacity, it may be declared null and void.

How Ransom Money Moves to Captors

When the captor makes a demand for ransom in exchange for the kidnap victim, the ransom insurance policy does not provide the payment. All ransom money must be paid by the business directly. Once the crisis has passed, the insurance policy provides for reimbursement of those payments. Many policies will also cover any payments that are lost on their way to the captors. Note that ransom insurance only covers up to the policy limit. Any expenses beyond the dollar amount in the policy will remain the company’s responsibility.

Keeping employees safe when they travel overseas includes having a plan in effect if the worst happens. Look into ransom insurance in PA to keep your company covered in any situation.