Rising incidents of kidnappings have forced companies to buy kidnap and ransom cover for their employees. Insurance executives said the sale has doubled in the past one year.
Apart from paying ransom, the policy also takes care of the reward money, personal accident, cosmetic surgery and legal expenses.
At present, five companies -- New India Assurance, United India, Tata AIG, ICICI Lombard and HDFC Ergo -- are offering this product. Insurers are being assisted by their reinsurers to set up a control risk group when the client informs about an incident.
"Once an incident is reported, we set up a control risk group immediately and start monitoring calls. The group negotiates with the kidnappers and announces a reward money," said I S Phukela, general manager at New India Assurance.
Since confidentiality is critical for the clients, insurers do not share the details of the business figures in this segment. Although the market size of the product is not known, industry sources said the sum assured is in the range of Rs 2-5 crore.
Phukela said the policy is popular among companies operating in the north-eastern part of the country, where incidents of kidnapping are high.
The cover is important in certain geographies. Insurers say those who need to work in naxalite or terrorism-infested areas usually opt for such a cover.
Companies with overseas exposure or operating in difficult terrain also go for it.
Rajiv Kumaraswamy, head of risk and reinsurance at ICICI Lombard General Insurance, said: "The number of policies have doubled in the last one year.
"Primarily, contracting companies buy this cover. Of late, marine and hull companies have started buying the cover. The increasing threat of Somali pirates had forced shipping companies to look for protection."
"People who have a possibility of getting kidnapped buy this cover. It may be an employer or a businessman.
"The product is sold mostly in places like Delhi, national capital region and Mumbai," said Optima Insurance Broker managing director and chief executive Rahul Agarwal.
