Kidnap and ransom insurance is also known as K&R insurance. It is established to secure people and companies that operate in certain areas known to have high kidnapping incidents. This type of insurance covers the kidnapping, extortion, and hijacking risks. It is a policy that provides compensation to the holder in case loss is incurred. Contrary to misconceptions, this type of insurance does not promise to pay the ransom imposed by the kidnappers. It is the insured who will pay the ransom. After paying the ransom, the insured can claim for reimbursement.Usually, kidnapping insurance policies provide reimbursement for the cost incurred as a result of the kidnapping.
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