Kidnap and ransom (K&R) cover is to provide ship owners reimbursement for risks against pirate attacks. The most important parts of a K&R policy are the preventative and response services included within the policy. All K&R policies contain a specialised services of a response firm. This firm employs consultants who respond to a threat or incident and assist the policyholder in negotiating the safe release of a kidnap incident. The fees for the response consultants are met by the insurance company.
Subject to policy limits and terms and conditions, a K&R policy provides coverage for the following risks:
- Reimbursement of Ransom
- Loss of ransom in transit
- Security consultants fees and expenses.
- Personal accidents
- Additional expenses
- Legal fees
Additionally, K&R underwriters can provide, Loss of hire (LOH) cover during the kidnapped period.
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