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.

The results are very surprising because it’s expected that United States citizens would be the most at risk for kidnap and ransom.  The reasons the Chinese are at risk is simple, they have the largest number of people traveling to high risk locations for kidnap and ransom around the world.

Of course, from this fact we can form several conclusions, most notably that the country of the kidnapping victim and how their country treats kidnappers is of no concern to the kidnappers.  The United States made a strong case on how it will treat kidnappers in 2009 when the Navy Seals shot and killed maritime pirates on the Maersk ship Alabama.  We suspect the Chinese special forces would not treat the kidnappers of their citizens with any gentler gloves than the Americans.

For more information on kidnap and ransom insurance for expatriates and travelers please contact McKinley International Risk Management.

This group had a poor showing regarding the international security of faculty and staff that leave the country

A recent survey conducted by McKinley International Risk Management finds that most universities and colleges are not taking the steps to adequately protect employees that work or travel internationally on university business.  Many may even have a kidnap and ransom insurance policy but there are several problems and disturbing trends found in international faculty security.  These include all of the following:

1. University Human Resources Departments not knowing where employees were around the world, and having no good way to keep track of when and where employees work and travel internationally.  For example, many commented that university employee benefits, risk management, and human resources “have no way of knowing if the college of business is sending someone to work or travel internationally.”  (This is far from best practices in 2009 where it really is the employers business to absolutely know where employees are around the world.  In most cases HR took very little effort to combat this or did not even see the problem).
2. Kidnap and Ransom insurance strategy is all over the place.  Policies range from stand-alone k&r insurance to programsembedded in other policies like general liability.  Many universities send employees into very high risk locations like Eastern Africa, and have no kidnap and ransom insurance in place whatsoever.
3. University employers were very unfamiliar with the particulars of their kidnap and ransom insurance policy, even where one existed.  Many did not exactly know who is covered, what the country exclusions were, and exactly how to put the plan into action in the event of an abduction.  Most did not know what other potential threats the kidnap and ransom insurance policy would cover like extortion or express kidnap.

Overall, we give universities a D- grade when it comes to kidnap and ransom insurance and other types of measures that should be taken to protect employees traveling or working internationally.  This is the lowest rank of any group we rated including non-profit organizations, missionaries, large corporations, small corporations, and universities.  One of the reasons for the very poor rating was a general lack of coordination between the risk manager, employee benefits, human resources, and what each “College” was doing inside the university. 

In addition, the many State schools brought down the overall rank of colleges and universities in general because of the need to coordinate all risk management and insurance procurement with the State’s capital (in most cases.)  For example, a large State University may have employees in Tanzania for six months but of course, none of the needs of these employees are addressed by the State’s capital, providing insurance benefits for all State employees.  We understand it can be extremely difficult for State universities to make these risk management moves on their own, but we found too much of a prevelance and attitude of “we can do nothing about the situation” and most never truely pursued creative ways they could use to protect employees internationally, without the State involvement. 

Overall, the smaller private universities ranging from Yale to Bucknell rank much higher in international faculty security and kidnap and ransom insurance for universities.

Do these four know the risks traveling in Kuwait? Is there an emergency security plan in place?

In our first blog in the “learning category” we will go over the basics of Kidnap and Ransom insurance (Kidnap and Ransom Insurance 101).  However just knowing what is in this post is enough to put your knowledge over about 80% of all others in the HR and insurance arena.  Not many have a good grasp of this important employee benefit.

Kidnap and Ransom insurance is offered by large insurance companies and Lloyd’s of London to insure global organizations and wealthy individuals and families.  The basic element is an kidnap “insurance benefit” that would be used to pay a kidnapper in the event of abduction and provide the ransom money to get the person back, but there is much more to this insurance benefit.  The other major parts of a good k&r insurance scheme is as follows:

1. Extortion Payment | demands following a specific written or verbal threat to injure, kill, or kidnap a person; damage property; contaminate products; divulge trade secrets; or destroy electronic data by computer virus.  Extortion is actually much more common than kidnap itself.
2. Wrongful Detention | Involuntary confinement by a government entity or insurgent organisation.
3. Hijack | Illegal holding under duress of a person while travelling on any aircraft, motor vehicle or water vessel.
4. Services of an independent international security company.  In the event of one of the incidents above, only a global security company will be able to mobilize individuals trained in international executive security and kidnap and ransom. 

An insurance benefit of several million dollars is really worthless without an excellent security company ready to intervene.

Chubb still a quality provider

Chubb still maintains it’s reputation as being a first rate insurance company in the corporate  marketplace, and this also applies to the Chubb kidnap and ransom insurance offering.

Most good international kidnap and ransom insurance companies partner with an independent outside consulting / security company for services in case they are needed and Chubb partners with the Ackerman Group, which specializes in kidnap and extortion threats globally.  The Ackerman Group has a good solid reputation.  For being a Chubb client Chubb guarantees the services of the Ackerman Group.  Many K&R insurance policies may tout the services of a famous negotiator, but in a crisis may be able to use another firm swapping one out for another.  Read the fine print.

In addition to investigation and on the ground negotiation, Ackerman also provides Chubb with a proprietary service called Risk Net, an online database that provides threat profiles for the countries of interest to clients before they decide to travel to a country on business so they can make good decisions.

In addition to the “normal” kidnap and ransom insurance and extortion benefit, Chubb also offers clients a benefit called Cyber Extortion Coverage which can pay a benefit for a legitimate threat to destroy data such as a threat that a computer system will be hacked or hit with a virus if the company does not pay ransom money.  Chubb can offer policy limits up to $25,000,000 but policy limits of more than $1,000,000 are not typical and often unnecessary in most countries where kidnap and ransom is a threat.

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.

All HR Managers with employees working abroad should see the move.

Welcome to our website, dedicated to understanding global kidnap and ransom insurance and best practices for individuals and companies in dealing with global security threats.  The world in 2009 is not the same as it was just 10 years ago.  Americans are targets.  Executives that work for large corporations and industry are targets of kidnap, extortion, and other threats.  Even those on vacation can be targets. 

Unfortunately, most people are completely unprepared for any threat that may happen while they work or travel internationally.  Most Americans that travel into the third world do not even take out an international medical evacuation and assistance program let alone an international personal security plan or kidnap and ransom insurance.  We are here to provide the information necessary so the proper decisions can be made at any level.