Published on: 12 May 2015 by Michael Lamb
In the wake of the announcement that the Queenie Law kidnappers have been arrested Hong Kong media and news outlets have been abuzz with the topics of Kidnapping and Ransoms; so much so that the South China Morning Post is reporting a surge in requests for bodyguards and security experts amongst the city’s VIP’s.
When Ms Law was abducted from her luxury Sai Kung home on April 27th, along with almost HK$ 2,000,000 in cash and valuables, she experienced a harrowing ordeal which ended only after her father, Raymond Law Ka-Kui, paid an extortionate ransom of HK$ 28,000,000. While Ms Law stated she was “was greatly scared by the kidnapping" she also told media at a recent press conference “that neither my spirit nor my body suffered or sustained any injury because of the kidnap.”
Despite Ms Law’s courageous outlook and strong spirit following what was undoubtedly one of the worst experiences of her, or her family’s lives, the increase in cross-border crime and high profile home burglaries across Hong Kong in recent months presents a strong question as to what support is available to the personalities who find themselves the victims of Southern China’s criminal elements?
CCW Global looked at the topic of Kidnapping and Ransoms from an insurance perspective in July 2014 following the abduction of Carlos Tevez’s father, but with Hong Kong considered by many to be a relatively “safe” city to live in, the special considerations around this particular crime as it pertains to local at-risk individuals warrants further investigation.
One of the biggest questions CCW Global has received from consumers since the Bossini heiress kidnapping event made local news is “what would kidnap and ransom insurance have covered?!”
It is a fair question, as K&R Insurance, as it’s known in the industry, is not a commonly understood product like Home or Medical Insurance. In the event of a home burglary, a home contents insurance plan would cover the replacement of stolen items (which would have been suitable for the HK$ 2 million in cash and contents the kidnapping gang stole along with Ms Law), but how does a form of “theft” insurance apply to an individual?
The first thing that a Kidnap and Ransom Insurance policy would cover is a ransom payment made to the kidnappers.
In the case of Queenie Law, the original ransom demanded by the gang was HK$ 40,000,000. This was later reduced to HK$ 28,000,000 following negotiations.
A kidnap and ransom insurance plan would indemnify the policyholder for property or payments made in relation to a kidnapping event; even if the criminals demanded a ransom payment be made in a form other than a cash submission, the policy would reimburse the payment in full.
Additionally, while local media have not disclosed whether the negotiations to reduce the overall ransom paid by the victim’s family was due to police participation, or through the efforts of an independent hostage negotiator, a good K&R insurance plan would cover any costs for a high-level negotiator if these services were not provided by local government (or if the victim’s family wanted additional help regarding lowering a potential ransom payment and obtaining proof-of-life for the hostage).
This type of coverage would normally be satisfied under the plan’s “additional expenses” coverage and would actually provide for a wide range of protection outside of the reimbursement of the payment made to the kidnappers.
Additional expenses covered under a Kidnap and Ransom Insurance plan can include:
In the case of Queenie Law, the Hong Kong police force went above-and-beyond in terms of their efforts to track down the ransom payment, find the victim, and arrest the culprits. However, the local media circus in relation to the victim’s status within the Bossini family meant that there was a large degree of speculation and demand for information in relation to the case – the management of all the external aspects of the crime can mean a large financial burden for the victim’s family outside of the ransom payment, in which case a K&R insurance policy would have been able to alleviate some of the immense pressure felt by the Laws.
In addition to providing indemnification support directly leading to the speedy return of the kidnapping victim, and removing a large portion of the financial burden felt by the victim’s family or employer, a K&R insurance plan can also provide long-term recovery assistance for the victim.
While Queenie Law stated that she was in good spirits following her ordeal, such events have been known to lead to long-term stress disorders and, in the past, have had medical consequences for the victim.
A Kidnap and Ransom Insurance policy will help provide coverage for the costs associated with medical and psychological rehabilitation of an individual following an abduction, and can even provide financial assistance for the hiring of independent security services, through a company like Signal 8, for a high-risk high-profile victim following a kidnapping event.
Outside of the protection offered in relation to a kidnapping and/or ransom payment, a K&R insurance policy will also offer a wide range of coverage in relation to tangential risks.
If the criminals who kidnapped Ms Law had attempted to extort her family or her family prior to the abduction (i.e. “give us money or we will kidnap your daughter) then a Kidnap and Ransom insurance plan will trigger coverage if the policyholder has to make an extortion payment to mitigate or remove an extortion threat.
Extortion coverage under a Kidnap and Ransom plan in Hong Kong can provide coverage for:
In conjunction with the core Kidnapping and Ransom protection, the availability of an extortion benefit under the policy is designed to ensure the most comprehensive protection possible. While not every case will need this (Ms. Law’s, for example, didn’t), for threats where there is a greater objective in mind on the part of the criminals outside of simply obtaining a ransom payment – including the destruction of a business, like the Bossini chain, or the social downfall of a widely respected family – more comprehensive coverage can be especially beneficial.
In the modern world criminal elements are able to severely damage individuals through more means than just physical abduction. It is for this reason that K&R Insurance plans are expanded to include additional coverage benefits in line with the needs of the 21st century.
With Cyber Extortion the insurance is able to reimburse policyholders for extortion payments made due to a cyber threat that intends to:
Who can forget the infamous case of Edison Chen’s photograph scandal in 2008? There were rumors that Chen was contacted by the repair technician for a payment prior to the photos being released on Hong Kong internet forums and irrevocably harming the singer/actor’s reputation.
Further to this, modern Kidnap and Ransom insurance plans will also include extensive cover for political threats – if the criminal or group is acting on the behalf (as an agent or with approval of) any government or governmental agency, or if the criminals belong to a political terrorist or political insurgency group the policy will provide the requisite protection. This is notable due to the fact that many Hong Kong insurance plans will normally exclude any political connection in the event of a claim – which can leave the policyholder out in the cold in increasingly uncertain times.
Despite Hong Kong’s claim to be a relatively crime free and prosperous city, it is precisely for this reason that certain segments of society may want to consider looking at a Kidnap and Ransom insurance plan.
The recent abduction of Bossini heiress Queenie Law, and the subsequent Ransom payment leading to her release points to the fact that nowhere in the world is 100% safe. With Hong Kong playing home to some of the wealthiest individuals in the world, and with the high perception that life in the city is safe, unscrupulous criminal elements can take advantage of the relaxed attitudes to safety which are increasingly prevalent across the city.
Michael Lamb is an insurance industry professional with many years of experience within the Hong Kong Insurance market. Focusing on APAC coverage issues, Michael is able to provide extensive analysis and insight to a range of pressing topics. Previously, Michael provided insurance broker Globalsurance.com with their most highly valued articles and was a key influence in the development of all the content on Pacificprime.com, Michael has a passion for insurance matched by few others in the region.