There are differing views in the marine-market regarding the necessity or otherwise of purchasing K&R insurance.

K&R insurance covers any ransom request in respect of the crew of a vessel and unless amended is a personal lines coverage rather than a property coverage. We have ensured that marine wordings now reflect both the crew and property exposures. K&R coverage includes the cost of delivering the ransom and its attendant insurance cost. The policy also covers the cost of negotiators and their disbursement expenses. The requirement to purchase K&R coverage is most commonly assessed on a vessel by vessel basis.

A K&R policy should be a first loss policy, where Piracy is in the War policy and K&R is purchased with a waiver of rights of subrogation, the exposure of War underwriters is mitigated and this should be positively reflected in the additional War risk premiums.

The existence of K&R coverage is highly confidential. Permission should be specifically obtained from K&R underwriters regarding disclosure of the coverage to other underwriters to avoid coverage issues.