Despite the high risk of being kidnapped in Iraq, companies can insure their employees against the possibility of abduction with global kidnap and ransom (K&R) insurance policies. K&R insurance absorbs the cost of hostage negotiations and pays a ransom up to the financial limits of the policy. Additional coverages include lost employee wages, death and dismemberment, medical costs, rest and rehabilitation, family counseling, legal costs and crisis management expenses.

K&R insurance covers corporate executives in their business dealings worldwide, meaning that no country is excluded. American International Group Inc., Ace Ltd., Lloyd's of London and Chubb & Son Inc. all sell these kinds of policies. Most offer financial limits of protection in the $25 million range, although $100 million of coverage is available by combining the capacity of the different insurance providers.

After the 9/11 terrorist attacks, K&R premium rates skyrocketed 30%, but in the last two years they have remained stable and are even down a couple of percentage points this year. Not all companies are rated the same for premium purposes, however. Underwriters assess a company's risk based on numerous factors, including the number of employees traveling, the countries they visit and how often, and the type of company insured. "If you're likely to be regarded as a rich company by the kidnappers, it plays into the premium charged," explains Greg Bangs, who heads up Chubb's K&R insurance practice.