New Delhi: It was the kidnap of three-year-old Anant, son of Adobe Systems India chief executive Naresh Gupta on 13 November 2006, that spurred the development of the concept called kidnap and ransom (K&R) insurance cover, reported mint.

The kid was rescued a week later.

"Kidnapping cases are on the rise worldwide, and given the number of incidents in India, the interest in K&R policies has increased," said Bindi Thakkar, corporate marketing manager at private insurer ICICI Lombard General Insurance.

There has been a significant rise in kidnapping cases owing to the rising prosperity together with inadequate law enforcement. In 2006, the latest period for which data is available, the number of reported abductions jumped 52 percent to 23,991, from 15,750 in 2005, ranking India sixth among 10 countries with the worst record for kidnappings, according to the National Crime Records Bureau.

Uttar Pradesh recorded the highest number of kidnappings at 3,318 in 2006, followed by Bihar and Andhra Pradesh at 2,619 and 2,030, respectively. The rise in kidnapping incidents comes at a time when domestic and overseas companies are expanding in the hinterland, where the law enforcement machinery is often not able to provide adequate protection to their employees.

Companies caught in violent confrontations with local people or extremist groups are particularly vulnerable. In October last year, four employees of Posco India, the local arm of the South Korean steel company, were held hostage by villagers who opposed building of the $12 billion steel plant in Orissa.

If Adobe's Gupta and his family had been insured, the policy would have immediately kicked in. Because the prime objective of such insurance is to ensure that the kidnapped individual would not suffer physical harm, a typical policy would have had a crisis response team, often comprising former officials from investigating agencies, in place.

It would also cover any ransom paid to secure the victim's freedom.

"When a kidnapping takes place, the parents and relatives of the victim get emotional and fail to negotiate with kidnappers. It is here that the role of response teams comes into play as they are trained to negotiate with kidnappers on the ransom amount. At the same time, they have been taught to keep the victim alive because the safety of the victim is paramount," said S.K. Sethi, vice-president of Insurance Brokers Association of India.

Confidentiality is the key to K&R cover.