Background
Kidnap, Ransom and Extortion ("KRE") insurance
policies are increasingly piquing the interest of corporations that
conduct business internationally. KRE insurance policies can
provide a corporation with a variety of valuable resources in the
event of an extortion crisis involving its assets and/or employees
— including a professional negotiator, reimbursement of
ransom payments, coverage of a victim's personal financial loss
and recuperation benefits.
While practical in theory, KRE insurance involves a puzzling
area of law when terrorist groups are involved. Making ransom
payments to terrorist groups violates international
agreements1 as well as the laws of many jurisdictions,
since it can be considered a form of terrorist funding. The laws
that govern KRE insurance vary by jurisdiction, as certain
countries explicitly make it illegal for insurance companies to
directly or indirectly make ransom payments, while other countries
rely on broad sweeping
