Wealthy individuals and their family members are attractive targets for criminals who use kidnapping and other forms of extortion for financial gain. If you travel frequently to high-risk parts of the globe for business, vacations, philanthropy or use of a residence overseas, you may be at greater risk of an attack. Even more commonplace today are serious threats to personal security that come from leaks in information by domestic staff, employees or acquaintances in your everyday life. Securing kidnap and ransom insurance (known in the industry as K&R) is a smart decision for wealthy individuals who want to safeguard their family and their assets.

Policies cover more than kidnap-for ransom incidents. Insured events also include extortion (against persons and property), wrongful detention and hijacking. A disgruntled former household employee threatening to release sensitive information or the hijacking of a vehicle or private aircraft would fall within the cover of K&R insurance and, regrettably, these events do happen. Other covered events may include disappearances, child abduction, threats and hostage crises. Says Fritz Barjon, head of K&R for AIG in the U.S. and Canada: “Because many cases go unreported, accurate global statistics do not exist; however, sources cite tens of thousands of incidents each year.”

K&R policies are indemnity policies. In a covered event, the insured would need to make any ransom payment demanded by the kidnappers and then submit a claim to the insurer for expense reimbursement. It is worth noting that a K&R policy covers far more than just a ransom payment. It includes loss of ransom in transit, the judgment, settlement and defense costs, death and dismemberment, business interruption, personal financial loss, medical, “rest & rehabilitation,” increased security and access to specialist security consultants.

Arguably the most significant feature of a K&R policy is access to the    best-in-class security experts. These consultants come from varied backgrounds, including the military, law enforcement and international intelligence agencies. Their role is to advise the family on all aspects of dealing with the incident—from the formulation of an effective response strategy and communications with the perpetrators, to dealing with the media and the authorities and care of other family members.

Of course, the best course of action is prevention. As a policyholder, you may have complimentary pre-incident briefings with a team of security consultants who will establish your risk profile and prepare you for specific security issues you may encounter.

The popularity of social media also raises concerns. Wealthy individuals living low-profile lives sometimes overlook their children’s activities on Facebook and Twitter. Says Graham Ashcroft, operations director of NYA International and a specialist with 20 years of experience in crisis prevention and response: “Younger family members can be inadvertently compromising their family’s security by advertising precise details of their lifestyle, location, daily routines and plans to a vast, online social network. Criminal groups can easily access this information and use it for tracking and targeting purposes. It is important to make children aware of the risks.”

Should a crisis occur, a K&R policy provides the assurance that an experienced security consultant will be available to your family 24/7 to help structure and execute a controlled strategy to resolve the crisis quickly while maintaining the highest level of protection for your family.

Policies, available in coverage amounts of $1 million up to $50 million, are crafted and priced based on personal factors. These factors may include your public profile, locales you travel to, your net worth and the number of people covered. While personal factors differ, of course, K&R policies have a common thread: to ensure the safety of you and your family regardless of where it is that you travel and whom it is that you see.