CR 00 40–KIDNAP/RANSOM
AND EXTORTION COVERAGE FORM AND
CR 00 41–KIDNAP/RANSOM AND EXTORTION POLICY
(February 2026)
There are two ways to
write kidnap, ransom, and extortion coverage: either through a separate policy
or coverage form, or by attaching an endorsement to the ISO Commercial or
Government Crime Coverage Forms or Policies. This analysis focuses solely on CR
00 40–Kidnap/Ransom and Extortion Coverage Form.
Related Article: CR 04
03–Extortion–Commercial Entities and CR 04 04–Extortion–Government Entities
Since they share
similar formats, this analysis refers to CR 00 21–Commercial Crime Coverage
Form (Loss Sustained Form) to help understanding.
Related Article: ISO Commercial
Crime Coverage Forms and Policies Analysis
This coverage is
available to any commercial entity and most state and local government units
and entities. However, financial institutions are not eligible.
The Kidnap/Ransom and
Extortion Policy consists of two basic parts:
A policy containing the
Kidnap/Ransom and Extortion Coverage Form must include the following four basic
forms:
This form contains
conditions common to all commercial lines of insurance. It is mandatory on most
monoline or multi-line policies.
Related Article: IL 00
17–Common Policy Conditions Analysis
NOTE: The DS 07–Kidnap/Ransom and Extortion
Policy Declarations is a combination of the DS 06 below and the DS 00–Common
Declarations.
The declarations includes four insuring agreements and conditions
specifically for Kidnap/Ransom and Extortion Coverage. Coverage can be written
as Primary, Excess, Coindemity, or Concurrent.
This section provides
spaces to specify the limits of insurance and deductible amounts per occurrence
for the following insuring agreements.
1.
Kidnap/Ransom and Extortion–Direct Loss
2.
Kidnap/Ransom and Extortion–Expenses Incurred
3.
Detention or Hijack
4.
In-transit Delivery of Property
Entering “Not Covered”
next to an insuring agreement removes that agreement and any related references
in the coverage form.
Spaces are also
provided for entering Insuring Agreements endorsed to the policy, including the
associated insurance limits and deductible amounts per occurrence.
This section provides
space to enter the names of individuals or classes of people who are excluded
from coverage.
This section is used to
list the full name and address of the security firm responsible for negotiating
with kidnappers to secure the release of any insured kidnapped individual.
This section lists the
endorsements issued at inception.
This section provides
space to list previous policy numbers for coverage that will be automatically
canceled when this coverage takes effect.
This section includes
fields for the countersigning authorized representative’s name, title,
signature, and date of countersignature.
This analysis pertains to the 08 13 edition of this coverage form.
Changes from the 08 07 edition are highlighted in bold. This analysis does not
cover editorial or formatting changes that do not affect coverage.
The coverage provided
by CR 00 41–Kidnap/Ransom and Extortion Policy is identical to that provided by
CR 00 40. The only difference between the two is that CR 00 41 incorporates the
conditions in the IL 00 17–Common Policy Condition, whereas CR 00 40 does not;
therefore, the IL 00 17 must be attached to the CR 00 41 to complete the
policy.
This policy contains
provisions that restrict coverage. It is essential to carefully review the
entire policy to understand the insured’s rights, responsibilities, and
coverage details. Although the Rough Notes editors do not use these terms, note
that throughout the policy, "you" and "your" mean the Named
Insured listed in the Declarations. Similarly, "we," "us,"
and "our" refer to the Insurance Company. Additionally, any terms in
quotation marks have specific meanings explained in the Definitions section.
There are four insuring
agreements. Coverage is limited to those agreements with a specified limit of
insurance listed in the declarations. This coverage applies to any covered loss
and related expenses, as defined in this coverage form, resulting from an
occurrence. The occurrence must take place during the policy period and be
reported to the insurance company either during the policy period or the
extended reporting period.
(08 13 edition)
This insuring agreement
covers two types of property loss:
a.
If a ransom is paid as a direct result
of the kidnapping or alleged kidnapping of an insured person, coverage applies
for the money, monetary instruments, securities, services, or other tangible
property used to pay the ransom.
b.
If an extortion threat is communicated to the insured,
coverage applies for the money, monetary instruments, securities, services, or
other tangible property used to respond to the extortion threat.
The threat of extortion
communicated to the insured must involve threatening to do one of the
following:
·
Physically
harm a covered person.
·
Damage
the covered premises or property.
·
Place
a denial of service attack in the insured’s computer system.
·
Insert
any malicious instruction, like a virus, into the insured’s computer system to
destroy, damage, or corrupt its programs or electronic data.
·
Contaminate,
pollute, or degrade the insured’s products or goods to a substandard level.
·
Obtain,
then use, reveal, or share any of the following:
o
Confidential
or proprietary information belonging to anyone.
NOTE: Confidential information is protected only if
the named insured makes regular efforts not to disclose to any third party that
such information exists.
o
Vulnerabilities
in the insured’s computer system source code.
|
Example: Baxter and his
family have been making world-renowned pickles for over 30 years, and they
keep their recipe secret. Baxter receives a note claiming that the recipe
will be posted online unless he delivers $100,000 in negotiable securities to
a secure location. The note also includes a copy of the recipe. Coverage
applies because the recipe is proprietary information. |
·
To place ransomware on
the insured’s computer system that would allow an extortionist to compromise
the named insured’s data and render it inaccessible until a ransom is paid. (08
13 edition)
This insuring agreement covers the
expenses of the named insured resulting directly from an alleged or actual
kidnap or extortion threat, as specified in the Kidnap/Ransom and
Extortion–Direct Loss Insuring Agreement.
|
Example:
Baxter chooses to safeguard the secret pickle
recipe by hiring a private investigator to deliver the demanded securities.
The expense of the private investigator is covered. |
This Insuring Agreement covers the
expenses of the named insured that are incurred directly due to an insured
person's detention or hijacking.
|
Example: Phillip, driving a rental
car and parked outside a New Orleans bank, becomes involved in a robbery when
a gunman jumps into his vehicle and forces him to drive away. The ordeal
concludes three days later with the gunman's death, the car's destruction, and
Phillip hospitalized. Within the insurance limits, this coverage form pays
for rental car costs, Phillip's hospital stay, counseling, lost wages, and
various expenses to support his family. |
This Insuring Agreement
covers loss of the insured’s property while in a messenger’s care and custody
in response to a kidnapping or extortion covered under the Kidnap/Ransom and
Extortion–Direct Loss insuring agreement. The loss must involve theft, disappearance,
confiscation, or destruction of the property during delivery to fulfill a
kidnap/ransom request.
NOTE: The messenger can be any individual the named insured designates to take
the property from its premises. The messenger does not need to be an insured
person. The property may include money, monetary instruments, securities,
services, or other tangible property.
|
Example:
Baxter hires a private investigator to deliver the
securities to the extortionist who threatened to reveal the family’s secret
pickle recipe. During the delivery, police intervene and arrest the
perpetrator. In the chaos, the briefcase opens, and the wind blows the
contents away. The securities are covered up to the limit of insurance. |
The insurance company
will pay up to the Limit of Insurance specified on the Declarations. However,
fees and costs for the security firm listed on the declarations are not
included in this limit but are paid in addition to the Limit of Insurance shown
on the Declarations for the Kidnap/Ransom and Extortion–Expenses Incurred and
the Detention or Hijack Insuring Agreements.
However, if a security firm is employed
at the time of the incident but not listed on the Declarations, the expenses
incurred are included in the Limit of Insurance shown on the Declarations.
|
Example: A kidnapping occurs, and ABC Security becomes involved.
They are listed on the Insured’s Declarations and incur $50,000 in expenses. The Limits
of Insurance are as follows:
The
$50,000 in expenses is covered in full because ABC is listed on the
Declarations, even though the limit of insurance for Kidnap/Ransom and Extortion
– Expenses Incurred is only $10,000. |
The insurance company
will not pay for a loss resulting directly from an occurrence unless the amount
of loss exceeds the deductible amount on the Declarations. Once the loss
exceeds the deductible, the insurer will then pay the covered loss up to the insurance
limit specified in the Declarations.
Kidnap/Ransom and
Extortion – Expenses Incurred and Detention or Hijack Insuring Agreements are
not subject to a deductible.
a. Acts Committed By You or Any Insured Person
Coverage does not apply
if the kidnap/ransom or extortion threat results from a dishonest, fraudulent,
or criminal act committed by the insured or any insured person.
b. Surrender of Property
Coverage does not
include loss or expenses from surrendering property in either of the following
situations:
·
Inside
the premises, unless it was initially brought in after receiving the ransom or
extortion demand specifically to pay it.
NOTE: This distinguishes this
coverage from standard robbery coverage.
|
Example: A man enters a jewelry store and
demands all the jewelry, threatening to detonate the bomb attached to his
waist. This situation qualifies as a robbery because jewelry is present on
the premises. However, this coverage form does not provide insurance for this
scenario. Coverage may be available under a Jewelers Block Coverage Form or
Policy. |
·
Outside
the premises when the surrender occurs because there is a threat to physically
injure a person who is not a messenger but who is in control of such property.
a. Political or Military Activity
There is no coverage for expenses incurred by
an insured person when they participate in the operation of a security or
military force or engage in political activities.
b. Travel Documents
Coverage does not apply
to expenses resulting from the insured or an insured person failing to properly
obtain or maintain necessary travel documents. Examples of travel documents
include passports, visas, permits, and similar documents.
c. Violation of Laws of Foreign Countries
Coverage does not
extend to expenses incurred if an insured person is detained abroad because of
actual or alleged violations of that country’s laws.
However, coverage is provided if the
detention stems from intentionally false, fraudulent, or malicious accusations
made solely to pursue political, propaganda, or coercive motives, or if it
harms the insured or an insured person.
|
Example:
Harry’s company operates in a South American
country. It was highly regarded under the previous government, but now the
current administration views it as an adversary. As Harry plans to leave,
airport security claims to have found marijuana in his luggage, leading to
his detention. Harry firmly protests his innocence, emphasizing that there is
no evidence linking him to any illegal drugs. This coverage covers the costs
needed to secure Harry’s release. |
The insured and each
insured individual must make every reasonable effort to keep the existence of
this insurance confidential.
NOTE: This coverage form likely includes this
condition to prevent the insured from becoming a kidnap or extortion target.
These conditions are in
addition to the Common Policy Conditions.
The word “loss” as used
in any Condition below, also includes expenses.
a. Additional Premises or Employees
(08 13
edition)
When
the insured adds employees and/or premises during the policy term, coverage
automatically applies without an additional premium charge during that policy
term. The only exception is if the new premises or employees result from a
consolidation, merger, purchase, or acquisition.
NOTE: See the section on consolidation, merger, or
acquisition conditions below for details on the exception.
The named insured is not required to notify the insurance
company of the additional premises and/or employees.
b. Concealment, Misrepresentation, or Fraud
Any fraudulent act
committed by the insured invalidates coverage. Coverage is also void if the
insured intentionally conceals or misrepresents a material fact related to the
insurance, particularly in the following areas:
·
The
insurance policy itself.
·
Insured
persons covered by this insurance.
·
Covered
property.
·
The
insured's interest in covered property.
·
A
claim filed under this insurance.
c. Consolidation–Merger or Acquisition
Coverage applies for 90
days to newly acquired entities, premises, assets, or liabilities of another
entity, and to its employees. The coverage is automatic, but the insurance
company must be promptly notified in writing of the acquisition. No coverage is
provided after 90 days unless notice has been received and the insurance
company has provided written consent.
An additional premium
might be charged, and only losses occurring AFTER the date of the
consolidation, merger, or acquisition are covered.
d. Cooperation
The insured must
cooperate with the insurance company on all matters related to the insurance,
as outlined in the policy's terms and conditions.
Related Court Case: Breached
Policy Provisions Justify Denial of Coverage
e. Due Diligence
The insured and each
insured individual must make reasonable efforts to prevent or minimize any
covered loss.
f. Duties in the Event of an Occurrence
(08 13 edition)
Before surrendering any
property to a ransom demand or an extortion threat, the insured must take
certain steps if an incident occurs that could lead to a covered loss. These
actions include:
·
Determine
that an actual occurrence involving kidnapping, detention, hijacking, or an
extortion threat took place.
·
Notify
all of the following if there is a kidnapping or extortion threat:
o
The
security firm listed on the declarations immediately.
o
An
associate.
o
Local
law enforcement authorities.
o
The
Federal Bureau of Investigation (FBI).
·
Authorize
payments in response to extortion threats or ransom demands.
·
Inform
the insurance company promptly.
·
Provide
a detailed, sworn proof of loss to the insurance company within 120 days.
NOTE: This duration exceeds that of most
policies because resolving a kidnap/ransom or extortion demand can take an
exceptionally long time.
·
Cooperate
with the insurance company as it investigates and/or settles claims.
·
Provide
the insurance company with all relevant records related to the claim for
review.
·
When
requested by the insurance company, the insured should agree to be examined
under oath and provide a signed statement of their answers.
·
When an organization or
individual responsible for the loss is identified, the insured must secure all
rights of recovery against them. They must not impede the insurance company’s
ability to exercise those rights.
g. Extended Reporting Period
Losses must be
sustained before the policy expiration date. The insured must report them to
the insurance company or the scheduled security firm during the policy period
or within 30 days after the policy is cancelled.
NOTE: There is no additional
extended loss discovery period.
|
Example: Jessica, an employee of South American
Arts, Inc., is traveling in Columbia to find new artisans. She often goes
days without contact while exploring remote villages. Her boss becomes
worried after not hearing from her for over 30 days. He reaches out to
contacts he has in the area. When 45 days pass with no
communication, he involves a security firm, worried that she might have been
kidnapped. The firm quickly locates her. It turns out she has been kidnapped,
but disagreements among her captors over her worth delayed a ransom demand.
The firm successfully resolves the situation and ensures Jessica's safe
return to South American Arts. Thanks to the security firm's efforts,
Jessica was rescued without paying any ransom. However, their services cost
$150,000. Unfortunately for South American Arts, Inc., the insurance expired
the day after Jessica was kidnapped, and the kidnapping was not reported
within the 30-day reporting window, so there is no coverage for the cost. |
h. Joint Insured
·
If
multiple named insureds are listed on the Declarations, the first named insured
represents all other insureds for insurance matters. However, if the first
named insured is excluded, deleted, or otherwise not covered, the next-named
insured assumes that role. They then become the first named insured and are
responsible for paying premiums and receiving all communications from the
insurance company, such as cancellation notices.
·
Any
insured, or its partner, member, official, or officer, might have knowledge or
information relevant to the coverage provided by this insurance. In such cases,
all insured individuals are deemed to have that knowledge. This is crucial
because the first named insured might not fully own the other insureds on the
policy. These could be partnerships or corporations involving significant
external interests.
·
If
the insurance for one of the joint insureds is canceled, that insured must
report a loss within 30 days of the cancellation date.
NOTE: This time period
matches the extended reporting period for the coverage part.
|
Example:
Celebrity Ink, along with
Popular Celebrities and My Favorite Celebrity, are joint insured parties. The
reporters from Celebrity Ink have taken bold steps in their work. The insurance company assesses the risk
as too high for the premium paid and informs the joint insureds that they
will cancel the entire policy or just Celebrity Ink. The other two insured
parties agree that Celebrity Ink should be canceled. Unbeknownst to everyone, one of
Celebrity Ink’s reporters had been kidnapped and was being held for ransom.
Coverage applies because the ransom demand was received by the insurance
company 15 days after the cancellation date. |
·
The
insurance limit is the maximum amount the insurance company will pay,
regardless of whether one or multiple insureds suffer a loss. This means a
separate limit does not apply to each insured.
|
Example: Polly Kravens
from Popular Celebrities and James Levin from My Favorite Celebrity are
kidnapped during a business trip. The maximum payout for this kidnapping is
the limit of insurance on the declarations. |
·
The
insurance company pays the first named insured for any loss incurred by any
insured. This payment releases the insurance company from further liability for
that loss.
|
Example: The insurance company covers the costs
for Popular Celebrities to free Polly and James. Popular Celebrities does not
inform My Favorite Celebrity. If My Favorite Celebrity seeks reimbursement,
they must negotiate directly with Popular Celebrities, not their insurance
company, because of this condition. |
i. Legal Action Against Us
The named insured may
not bring any legal action against the insurance company with respect to a
specific loss until all of the following conditions are met:
·
The
insured has complied with all of this insurance’s terms
·
At
least 90 days have passed since a proof of loss was filed with the insurance
company
·
The
lawsuit is initiated within two years of the date the insured reported the
loss.
Laws might prevent any
or all of the above from applying. In such cases, the particular condition is
modified to meet the minimum limitation period set by that law.
j. Liberalization
The insurance company
may adopt a revision that broadens the coverage offered by this policy without
increasing the premium. If this change is made at least 45 days before or
during the policy period, the broadened coverage applies to this insurance.
k. Other Insurance
If the insured has other valid and collectible
insurance that covers the same loss as this policy, the insurance company’s
obligations are limited in the following way:
·
Primary Insurance
When this policy is designated as the primary, and:
o If the other insurance has the same terms and conditions as this policy,
then this insurance will pay its portion of the covered loss based on the ratio
of its limit to the total limits of all such insurance covering the loss.
o
If the other insurance does not have the same terms
and conditions, then this insurance is considered excess. It will pay only
after the loss exceeds the other insurance limit(s) (regardless of whether it
can be collected) and deductible or this insurance’s deductible listed on the
Declarations, whichever is higher.
Payment for any loss is
exclusively governed by the terms and conditions of this insurance.
·
Excess Insurance
o
This
insurance may be excess over other insurance policies. In such cases, it will
only pay the amount of loss that exceeds the limits of the other insurance
(whether or not they are collectible), plus that insurance's deductible. Any
loss paid by this insurance will be subject to this policy’s terms and
conditions, not those of the other insurance.
o
If
a loss is covered by this insurance and it includes a deductible, we will
subtract the total of all other insurance coverages and any associated
deductible from the Deductible Amount listed in the Declarations.
l. Ownership of Property; Interests Covered
(08 13 edition)
This insurance policy covers only the specific types of property listed
below:
·
Property the insured owns or leases.
·
Property the insured holds, regardless of the capacity
under which it holds it.
NOTE: The 08 13 edition deletes the words “whether or not you are legally
liable for the loss of such property” and adds it in the next item.
·
Property the named insured is legally liable for, but only
if that liability existed before the loss occurred.
NOTE: This insurance is only
for the benefit of the insured. No third party organization or individual has
any rights under this policy. Claims must be submitted by the named insured,
who will then manage any payment arrangements with the third party involved.
m. Recoveries
Recoveries may be made
by the insured or the insurance company, and the party recovering must notify
the other party. The recovering party is reimbursed for its expenses from the
recovered amount, and the remaining balance is distributed in this order as
follows:
1. The insured receives
the portion of the loss that goes beyond what the insurance company paid.
2. The insurance company
receives the amount of loss it paid.
3. The insured receives
the amount of the deductible they paid.
4. The insured receives
any remaining amount to cover expenses this insurance did not cover.
Recoveries do not
include recoveries from insurance, suretyship, reinsurance, security, or
indemnity that benefit the insurance company, nor do they include the recovery
of original securities if duplicates have already been issued.
n. Surrender of Personal Assets
Payments or expenses made due to ransom
or extortion on behalf of an insured person who is not the named insured are
considered the property and expenses of the named insured. This applies only if
the demand stems from the insured person's connection to the named insured.
|
Example: Penelope is kidnapped while in Mexico.
Her family is notified and immediately pays the ransom. Penelope was in
Mexico on business for her employer, World Tours, Inc. The ransom that
Penelope’s family paid is considered a payment by World Tours, Inc. As a
result, it is compensable under World Tours’ Kidnap/Ransom and Extortion
coverage. |
o. Territory
The event can occur
anywhere in the world unless the territory is changed on the declarations.
NOTE: The CR DS 06–Kidnap/Ransom and
Extortion Policy Coverage Part Declarations does not include a section to
modify the territory, and there is no endorsement available to do so.
p. Transfer of Your Rights of Recovery Against Others to Us
The named insured must
transfer all rights to recover to the insurance company for any loss it has
suffered and that the insurance company has paid. It must also take all
necessary steps to protect those rights and avoid any actions after the loss
that could affect them.
NOTE: The named
insured can usually waive rights of subrogation in writing before a loss with
most property coverage forms and policies, but this coverage form does not
include that option.
q. Valuation–Settlement
(08 13 edition)
The following
determines the valuation of losses based on the coverage provided by this
insurance.
(1) Money
Money is valued at its
face value. Foreign currency can be exchanged for either the same country’s
face value or the equivalent amount in U.S. dollars. The equivalent is
determined by the exchange rate listed in The Wall Street Journal on the day of
surrender.
(2) Securities
Securities are valued
at their closing price on the day they were surrendered. The insurance company
has two options.
·
Either
pay the market value of the securities or replace them in kind.
o
If
replaced, the named insured must sign over to the insurance company all rights
to the lost securities.
·
Pay
for any lost securities bond required to issue duplicates.
o
The
insurance company’s responsibility is limited to covering either the market
value of the securities on the day the loss is discovered or the insurance
limit, whichever is less.
3) Property Other than Money and Securities
Property loss,
excluding money and securities, is valued at replacement cost without
depreciation. The insurance payout is limited to the lesser of the following:
·
The
limit of insurance for the lost property on the declarations.
·
The
expense of replacing the property with similar property used for the same
purpose.
·
The
cost the named insured incurred to repair or replace the property.
The insurance company
will not pay any loss or damage based on replacement cost until the property
has been actually repaired or replaced. The repair or replacement should be
completed as quickly as reasonably possible. If the lost property is not replaced,
the insurance company will pay only the actual cash value.
At the named insured’s
option, the insurance company pays for loss or damage to such property in the
currency of the country where the loss or damage was sustained, or its
equivalent in U.S. dollars. The equivalent value is based on the exchange rate
or value published in The Wall Street Journal on the day the property was
surrendered.
Any property paid for
or replaced by the insurance company becomes its property.
A set of related
electronic instructions that govern the functions and operations of computers
or their connected devices. A computer program allows these devices to receive,
process, store, or transmit electronic data.
This involves detaining
an insured person under duress. The detention must be carried out by someone
with explicit or implicit approval from a government or its authority. It can
also be committed by someone with approval from an insurgent group, party, or
organization.
NOTE: Detention does not
include kidnapping.
Facts, images, sounds, and
other information meeting all of the following criteria:
o
Floppy
disks
o
Tapes
o
Divers
o
Data
processing devices
o
Media
·
Used
with electronically controlled devices like a computer.
·
Stored
on, created on, transmitted to or from, or used with computer software,
including software used with computer peripherals.
Any natural person:
·
who
is employed by the insured, earns a salary, wage, or commission from the
insured, and is subject to the insured's right to control or direct their
services.
NOTE: The difference between employees and
independent contractors can be vague and somewhat fluid. Recent employment
cases have examined long-term independent contracts to determine whether
individuals are truly independent or de facto employees. Each situation is
different and requires expert legal advice to determine whether these
individuals should be considered employees.
·
who
is temporarily provided to the named insured as a substitute for a permanent
employee listed above, but only if the replaced employee is on leave. These
individuals may also be used to manage short-term workload demands. They are
considered employees if they work under the control or direction of the named
insured while performing services.
NOTE: Coverage for these employees is enhanced
in the 08 13 edition because they remain employees even when they take property
off premises. This was not the case in the 08 07 edition.
·
who
is leased to the named insured through a written agreement with a leasing firm.
These individuals must carry out duties connected to the operations of the
insured’s business, but this does not include temporary employees.
·
who
are former employees, directors, partners, members, managers, representatives,
or trustees with whom the named insured consults while providing
services for the insured.
·
who
is an intern or guest student pursuing studies or duties.
NOTE: Coverage for these employees is enhanced
in the 08 13 edition because they remain employees even when they take property
off premises. This was not the case in the 08 07 edition.
·
who
are employees of merged or consolidated entities are included if the merger or
consolidation took place before the current policy's effective date.
Employee is not a
broker, agent, commission merchant, factor, consignee, independent contractor,
or similar party, and any others not specifically described above as employees.
All of the following
fees and costs are considered expenses:
·
When
the security company listed on the declarations is hired to conduct
negotiations or secure an insured person's release, including verifying the
authenticity and seriousness of an extortion threat.
·
independent
negotiators
·
interpreters
and/or independent public relations consultants
·
Security
guards hired to protect the insured property or an insured person, but only if
the security firm on the declarations recommends hiring them.
·
travel and accommodations the insured or an insured
person incurs
·
Salary,
commissions, and other financial benefits paid by the insured to an insured
person, but they are limited to the pay rate in effect at the time of the
person's kidnapping, detention, or hijacking. These payments cease on the
earliest of the following dates:
o
30
days following the insured individual's release, should he or she not have yet
resumed working.
o
Discovering
the insured person has passed away.
o
120
days have passed since the last credible evidence indicating the insured person
is still alive after an abduction.
o
Five
years following the abduction of the insured person.
·
Hospitalization
and medical services, including psychiatric care and cosmetic or plastic
surgery, are covered only if the costs are incurred within 24 months of the
insured person’s release.
·
independent
forensic analysts
·
Interest
costs incurred by the named insured for loans obtained from a financial
institution to pay extortion threats or ransom demands.
·
An
insured person’s personal financial losses resulting from their inability to
manage personal financial matters due to kidnap, detention, or hijack.
·
Reward
money paid by the insured for information that results in the arrest and
conviction of those responsible for a covered loss.
·
Court
costs and attorney fees the named insured paid to defend itself in a lawsuit
filed by the insured person’s spouse or beneficiary, directly due to kidnap,
detention, or hijack.
·
Any other reasonable expenses the insured
incurs, provided they have the insurance company’s written consent.
The following do not
qualify as expenses:
·
Costs the insured spends to recall or destroy products or
goods due to an extortion threat to contaminate, pollute, or make them
substandard.
·
Loss of earnings and all other costs the insured incurs
due to business interruption.
This refers to any
individual who visits the insured’s premises or the residence of a director,
trustee, partner, member, manager, or employee, for business or social purposes.
This also covers visits to the insured's residence if the insured is a sole proprietor.
Additionally, a person is regarded as a guest if they travel in a motor
vehicle, aircraft, or watercraft with any insured person for business or social
purposes.
Holding an insured
person under duress while they are traveling in a motor vehicle, aircraft, or
watercraft. This does not include kidnapping.
Someone who provides
information that cannot be obtained through any other means, in exchange for a
reward offered by the named insured. An informant cannot be an insured person.
Any of the following,
as long as they are a natural person:
Abducting an insured
person to solicit money or other compensation in exchange for their release.
The abduction must be involuntary.
(08 13 edition)
A natural person who is a director of a limited liability company.
NOTE: Manager is not the typical employee with
supervisory duties; that person is regarded as an employee.
(08 13 edition)
An owner of a limited
liability company represented through their ownership interest. A member can
also act as a manager if they are a natural person.
A natural person whom
the insured designates to care for and handle property outside the premises.
Either of the
following:
There is a very
important limitation to this definition. If a kidnapping, extortion threat,
detention, or hijacking involves a series of acts, and any of those acts occur
prior to the effective date of this policy, the insurance company will not cover
that loss.
Premises
A building that the
named insured occupies and where business is carried out. The residence of any
insured person is also a premises.
Money, monetary
instruments, and securities are considered property. Additionally, services and
tangible property also qualify as property. Since the term 'services' is not
explicitly defined, the scope of what constitutes services could be broad.
(08 13 edition)
A type of software that
encrypts electronic data within a computer system, making it inaccessible to
the system owner. The owner must then pay a ransom to the attacker to decrypt
the data and restore access.
The insured person
definition states that a relative living in the same household is an insured.
This includes immediate family members such as a spouse, child, stepchild,
legally adopted child, and foster child. It also covers the spouse of a married
child and grandchildren. Additionally, it encompasses siblings, parents,
adoptive parents, stepparents, and grandparents. In-laws are also considered
relatives, meaning brother-in-law, sister-in-law, parent-in-law, and
grandparent-in-law are included and qualify as insured persons.
NOTE: Relatives, as
previously defined, are those connected to the insured person either through
biological ties or legal relationships. Therefore, a significant other would
not be considered a relative, even if they have been cohabiting for a long
time. Similarly, children of that significant other would also not qualify,
regardless of the emotional bonds or attachments understandings.