virtual kidnap

Virtual kidnapping, virtual kidnap, is a new trend affecting expatriate global security and the security of business travelers, vacationers, and students on “study abroad.”  Employers that have kidnap and ransom insurance policies in effect are advised to look at their current policies to see if they cover “virtual kidnap” and if their provider would lend consulting expertise and support services.  Most programs will not cover virtual kidnapping because the kidnap and ransom insurance company will need to verify that the individual has been abducted or threatened before they will make a benefit payment.

What is virtual kidnapping?  Virtual kidnap is when the “kidnappers” do not actually have anyone abducted but instead, using email and other means, say they are holding an individual or may threaten an individual in the hopes that a quick payment will be made before it is realized the “victim” is safe and sound.

Also, in the case of a university student studying abroad or doing “semester at sea” there could be threats against the individual or extortion threats, in an attempt to get a cash payment.  Again, by the very nature of virtual kidnapping, there is no real danger to the “target.”  Please come back to the International Executive Security Monitor as we look at virtual kidnap more closely over the next few months.

This is a situation where kidnappers will force a foreign national into their car, or jump into the car and detain the foreign national for only a short time, robbing what they have in the car or taking them to 1 or 2 ATM machines so they can withdraw as much cash as possible. 

There could be a promise of quick release if the victim is able to get out a certain amount of money and serious threat if the money can’t be produced.  In most of these situations the kidnappers themselves don’t want to hold the victim for any extended duration of time and many are not kidnap and ransom professionals.  Many are local amateurs, and in some cases they can be more dangerous especially if they panic during the express kidnapping.

Even if your kidnap and ransom insurance has an express kidnap feature, of course there is very little chance any company will be able to intervene if the victim is only being held for 6 hours or less, and of course, there is a good chance the victim has not had any contact with anyone, and not allowed to use a cell phone.  There is no ransom call of course. 

The benefit feature in a kidnap and ransom insurance policy may be used to return monies withdrawn from the ATM.  Knowing the expatriate will get all funds back, the victim should be more willing to just drive to the ATM and withdraw as much as possible for the express kidnappers to get back home as quickly as possible.

As we have discussed, planning is critical.  Expatriates should have been taught to think through this situation.  Employers should not tell them about the details of the kidnap and ransom insurance plan, but they should instruct expats that if express kidnappers ask for $500, by all means give it to them and we will reimburse you!  It sound obvious, but there have been many people shot and killed because they caused a problem when asked to remove their $300 watch!  The expatriate should have been over this scenario in their mind, and be prepared to stay calm and pay the express kidnappers.  Without planning, the end result may be tragic.

At this point, it's better he does not know

For employers that do have a kidnap and ransom insurance policy in place, there are requirements of the policy owners put in place by most good insurance companies like Lloyd’s of London.  The main requirement surrounds the secrecy of the policy, and exactly who in an organization can know about the existence of a kidnap and ransom insurance policy.

Good insurance companies will restrict access and knowledge to the K&R insurance policy to only a handful of individuals.  For example, if a company with expatriates puts a “flyer” in the expatriate assignment manual before each expat leaves for assignment saying “don’t forget you have $1,000,000 of kidnap and ransom insurance if you are ever abducted,” this would void most “real” kidnap insurance policies.

Although most people are not aware of this secrecy requirement, the reasons are rather obvious and are as follows:

1. The insured would become more of a target if it was public knowledge that a kidnap and ransom insurance policy was in existence.  Of course, this is more important for small to medium sized organizations.  Every potential terrorist or FARC-like organization in South America knows that companies like Exxon and Microsoft have K&R insurance, or have the ability to pay quickly.  Mega corporate employees are always targets.
2. If the abductors knew about the existence of a policy or even worse, the amount of insurance, there would be no ransom negotiation.  The kidnappers would know the exact kidnap lump sum benefit and request that exact amount with no negotiation possible.
3. The expatriate or travelling employee would immediately tell the kidnappers in the first 10 seconds of the abduction, “don’t harm me, my company can pay you $500,000 from our AIG Kidnap and Ransom insurance policy.”  As this may be good for the poor individual abducted, it would quickly have underwriters and insurance companies running for the exists and no longer accepting kidnap and ransom insurance risk.

In a large organization the knowledge of a K&R insurance plan may be limited to 5 or 56indivduals including the Director of International Human Resources, Director of Benefits, CFO, Treasurer, President, and one or two key assistants in those departments that see all emails and correspondence.

It does not matter the currency, Kidnap and ransom fees add up quickly

It is said that a good kidnap and ransom insurance policy can easily be separated from a poor policy by looking at the expenses it pays for.  Most people will look right at the benefit itself.  A K&R insurance policy with a $250,000 ransom benefit can be ten times as good as a policy offering a $1,000,000 benefit, and expenses paid (or not paid) by the K&R policy is a major differentiator.

A company with a poor policy will quicky realize it as such when they start getting bills for $3,000 a day for expenses and bills not covered by the insurance policy.  In an international kidnapping, and expert is needed on the ground to do the negotiations, and these could last weeks or even months.

A good kidnap policy should contain all expenses paid, at a very high amount or better yet, on an unlimited basis.  A good independent consulting firm that does the hostage negotiation or kidnap negotiation probably has some already on the ground or in the region that they can call on.  Let’s look at just some of the expenses and fees.  This person or persons need to fly into the location.  They will need lodging and will need to eat.  They will need to transport equipment and set up a command center for perhaps weeks or even months.

A kidnap and ransom negotiation that takes 60 days may cost $180,000 if expenses are $3,000 US a day.  Making sure all expenses are paid by the kidnapping insurance you are taking, is the first priority but amazingly, often overlooked.

Extortion is far more common than "kidnap"

When people talk about Kidnap and Ransom Insurance and international security, most of the attention is on the actual abduction of the individual and the ransom lump sum benefit, but extortion is actually far more common, and a good kidnap and ransom insurance policy will need to address extortion.

Extortion: The use, or the express or implicit threat of the use of violence or other means to cause harm to person or property as a means to obtain something from someone else.

A note slipped under the door of an employee on an expatriate assignment saying “do this or else”is far more common than the actual abduction of the expatriate.  A good K&R insurance policy offers consulting services that will investigate an extortion threat.

Some K&R policies also cover what is called products extortion, which is a threat to harm or contaminate the products of an organization.  “Pay us $1,000,000 USD or your cola will contain arsenic” would be a classic example.  Having products extortion attached would be useful for any company that sold a product in a certain country that was easily tampered with.