Monthly Archives: December 2012

by | December 21, 2012 · 6:56 am

Hospitality Industry Safety Risks: New Jersey Hotel "Not Responsible" For Near-Drowning Of Guest; Jury Finds Pool Area "Complied With State Law"

“…the attorney for the hotel owner, said the pool area complied with state law and asked the jury to consider pool safety No Lifeguard Signthe responsibility borne by Robert Smith and his daughter when they entered the pool…”

A jury in Hackensack on Thursday determined that a hotel owner was not responsible for a near-drowning that left a Georgia man brain-injured after he tried to rescue his daughter from the hotel’s swimming pool.

The family of Robert A. Smith sued Ratan R. Park, LLC., owner of the Ramada Inn in Rochelle Park, for damages after Smith was overcome by water on July 4, 2009, when he tried to rescue his 11-year-old daughter, Brianna, after she drifted into the pool’s deep end.

Smith remains in a nursing home with permanent brain injuries that an attorney for Smith’s family said were the direct result of negligence by the hotel’s owner.

In the trial before Superior Court Judge Charles Powers, Attorney Greg Haddad had argued that the pool’s depth markings were inaccurate, its bottom was steeper than it should have been and the hotel owner failed to provide a “life line” separating the pool’s deep and shallow ends, presenting a “perfect storm” for guests who couldn’t swim.

Neither Smith nor his daughter could swim, and O’Hara in closing arguments on Wednesday in state Superior Court told the jury in the civil case that “both had a duty to exercise reasonable care; they had an obligation to make reasonable observations.”

For more:  http://www.northjersey.com/news/Jury_absolves_Rochelle_Park_hotel_of_responsibility_in_near-drowning_in_pool.html

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Filed under Claims, Guest Issues, Injuries, Insurance, Liability, Maintenance, Pool And Spa, Training

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by | December 20, 2012 · 9:57 am

Hospitality Industry Property Risks: Minnesota Restaurant Kitchen Fire Results In Extensive Equipment, Inventory And Water Damage

An insurance adjuster was on the site to assess the damage…based on how the bids come in to repair damage and replace equipment and inventory, the determination would be made about fixing and opening again.

Restaurant Fire“…the Red-wood Falls Fire Department called Thursday night to put out the fire and then called back Friday and Saturday to address persistent smoldering… the sprinklers went off water damage also became an issue…three inches of water that had to be removed…”

At 6:30 p.m. this past Thursday, a Christmas party was being held at The Rusty Bucket. About that time Oman noticed something that would dramatically change what she would be doing for the next few months. “I noticed there were flames coming out from behind the broiler,” she said.

After attempts were made to put the fire out with a fire extinguisher, it was determined the fire was not going down.
So, everyone in the facility was sent out of the building, and Oman called 911. Just four days later Oman stood looking at the damage that fire caused to the entire restaurant and bar.

For more:  http://www.redwoodfallsgazette.com/article/20121219/NEWS/121219465/1001/NEWS

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by | December 19, 2012 · 8:48 am

Hospitality Industry Property Risks: West Virginia Restaurant Fire Caused By "Malfunction Of Freezer Compressor Unit"; Court Rules Owners May Not Seek Damages To Rebuild Business

After an investigation, the cause of the fire was found to have been a malfunction of the compressor unit and/or power cord…the plaintiffs claim the freezer was not safe for its intended use and also made claims of Restaurant Firedefective design, breach of implied warranty and negligence.

Porker’s made claims for destroyed property and lost business during restoration, but Goodwin’s Dec. 7 ruling concerned three types of other damages requested. They were the cost to build a new Porker’s, lost franchise and royalties fees and the cost of preparing the franchise agreement…Goodwin wrote Porker’s was harmed by the fire but not destroyed, and the insurance payouts were designed to get business resumed. The company requested $105,935 to rebuild in its lawsuit.

After being told it could not seek damages to rebuild itself, Porker’s Bar-B-Q settled its lawsuit against General Electric and Wal-Mart on the eve of trial. The lawsuit claimed they were responsible for property damages from a fire caused by a freezer GE made and Wal-Mart sold. It was filed in 2011 by Jack Bruer and Pam Napier, the owners of Jack and Pam’s who operated Porker’s, and the settlement was entered 10 days after U.S. District Judge Joseph Goodwin granted the defendants’ motion for summary judgment.

The plaintiffs claimed a General Electric freezer bought three years earlier at a Sam’s Club store caught fire and destroyed the business premises of Porker’s, located in Cross Lanes, on Aug. 19, 2009.

Despite insurance company payouts, Porker’s has been out of operation since the fire. During its years of operation, Porker’s never turned a profit, Goodwin wrote.

“The defendants rightfully point out that the plaintiffs stated in their deposition testimony that Porker’s restaurant closed not because of the fire but because the landlord refused to renew their lease,” Goodwin wrote.

Bruer planned to go back to business after repairs were completed, but they never got the chance. The plaintiffs claim the fire was still the proximate cause of the restaurant because it led to the breakdown in the relationship between them and the landlord.

Goodwin found that a reasonable jury could not agree with that argument.

For more:  http://wvrecord.com/news/256425-bbq-restaurant-settles-case-over-fire

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Filed under Business Interruption Insurance, Claims, Fire, Insurance, Maintenance, Management And Ownership

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by | December 18, 2012 · 7:40 am

Hospitality Industry Insurance Risks: Workers' Comp Insurance Fraud Costs Businesses $7.2 Billion Annually

In 2007 State Fund discovered Safehome Inc. was under reporting their employee payroll to avoid paying the proper premium. An audit was completed and indicated that Safehome Inc. had failed to pay the proper workers compensation insurancepremiums for their workers’ compensation policy in the amount of $477,285. Additionally, State Fund determined the business was operating out of its classification, and related payroll was never reported to either State Fund or EDD, according to investigators.

“…the three types of most common workers’ comp fraud – injured worker fraud, provider fraud and premium fraud – haven’t changed much…”

Workers’ compensation fraud costs businesses $7.2 billion annually, roughly a fifth of all workers’ compensation payments, according to the National Insurance Crime Bureau.

In the past, it’s been challenging to prosecute workers’ compensation fraud, but recently passed legislation is making it easier for agencies like State Fund to work together to fight fraud. In June, as a result of a joint task force that included State Fund, more than 100 enforcement actions were taken against companies for failure to comply with state contracting, insurance and payroll requirements.

And earlier this year, State Fund partnered with other agencies on a fraud case that resulted in a conviction with restitution orders to both State Fund and the Employment Development Department.

For more:  http://www.insurancejournal.com/news/west/2012/12/12/273777.htm

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by | December 17, 2012 · 7:00 am

Hospitality Industry Property Risks: Superstorm Sandy "Flood Insurance Claims" In New York And New Jersey Exceed Total For Hurricane Katrina In 2005; Federal Flood Insurance Program Only Product Available

The NFIP provides insurance for homes and businesses in flood prone areas, such as Cape May County. Created in 1969 to fill the gap after private insurers declined to continue coverage for property owners in flood-prone flood insuranceareas, it now covers more than 5.6 million policyholders in 21,000 flood-prone communities.

“The federal flood insurance product is the only product available,” 

By the end of the second day after Superstorm Sandy’s powerful storm surge overwhelmed coastal areas of New York and New Jersey, the National Flood Insurance Program had already recorded more flood claims than the total for Hurricane Katrina, a storm that devastated the Gulf Coast in 2005.

William McMahon III, president of the McMahon Agency Insurance in Ocean City, said Sandy has since far surpassed the notorious Katrina.

Katrina, he said, delivered both flood and wind damage. Sandy’s damage was primarily from flooding. Few claims, he said, have been filed for wind damage.

Not long after Katrina, Hurricane Wilma tore across southern Florida, causing massive destruction.

“Wilma was a small storm. It came across the state from the gulf blowing about 70 mph, but the wind did major damage by the time it hit Miami,” McMahon said. “The wind ripped through all the high rises with 100 mph winds.”

In the wake of those two storms, barely two months apart, insurance companies bailed out of writing property and casualty insurance policies in some areas of Florida. The state of Florida, he said, instituted its own carrier, Citizens, now the largest underwriter in the state.

Florida and Louisiana, he said, are the two most difficult states to obtain property insurance. While flood insurance is available in Florida, it is expensive, particularly close to the coast.

For more: http://www.shorenewstoday.com/snt/news/index.php/ocean-city-general-news/32569-flood-insurance-claims-from-sandy-top-katrina.html

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by | December 16, 2012 · 9:14 am

Hospitality Industry Insurance Risks: Pending Legislation Before Congress Deals With Medicare Payments, Workers' Compensation And Liability Insurance Claims

“…the Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2012…deals only with workers’ compensation claims, and seeks to establish clear and consistent rules for workers’ workers comp medicalcompensation set-asides for claimants covered by Medicare…”

“…The Strengthening Medicare and Repaying Taxpayers Act…deals with issues related to the Medicare Secondary Payment Act. Specifically, it deals with mandates for providing timely information on conditional payments, penalties and statutes of limitations when claims are reported to the Centers for Medicare and Medicaid Services by insurers and self-insured and third-party payers on no-fault auto-insurance claims, workers’ compensation claims, and claims under liability insurance…”

Insurance and related industries are seeking to win support in the waning days of the current Congress for two pieces of legislation dealing with payment of injured worker claims to people whose primary insurance is Medicare. Officials of both the American Insurance Association and the Property Casualty Insurers Association of America are urging action on the bills this year.

Nathaniel Wienecke, PCI senior vice president, Wednesday asked officials of the Senate Finance Committee and the House Ways and Means Committee if it could act on the bill this year.

Currently, workers’ compensation claims that overlap with Medicare coverage are subject to lengthy, cumbersome review by the Centers for Medicare and Medicaid Services to establish the proper “set-side” coverage amounts for future medical expenses, according to PCI officials.

For more:  http://www.propertycasualty360.com/2012/12/14/insurance-reps-push-for-action-on-medicare-seconda?t=commercial

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by | December 15, 2012 · 12:59 pm

Hospitality Industry Legal Risks: Restaurant Owners Should Provide Comprehensive Employee Handbooks That Describe Employees' Rights, Expectations And Company Obligations

Small Business AdministrationAn employee handbook is an important communication tool between you and your employees. A well-written handbook sets forth your expectations for your employees, and describes what they can expect from your company. It also should describe your legal obligations as an employer, and your employees’ rights. This guide will help you write an employee handbook, which typically includes the topics below.

Anti-Discrimination Policies

Compensation

Work Schedules

  • Work hours and schedules
  • Attendance, punctuality and reporting absences
  • Guidelines for flexible schedules and telecommuting.

Standards of Conduct

  • Dress code and ethics
  • Legal obligations

General Employment Information

Safety and Security

For more: http://www.sba.gov/content/employee-handbooks

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Filed under Employment Practices Liability, Labor Issues, Liability, Maintenance, Management And Ownership, Risk Management, Training

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by | December 14, 2012 · 7:05 am

Hospitality Industry Security Risks: Hotel Electronic Door Locks In "Various Stages Of Being Repaired"; "Mechanical Caps And Security Screws" Provided To Block Hackers

In October, hotel insurance-related company Petra Risk Solutions issued its hotel clients an alert headlined, “Crime Alert – Onity Guestroom Door hackers are for real.”

Onity Electronic LockIn Florida, Petra loss prevention expert Todd Seiders said he received reports that a hacker had been seen carrying a laptop and using a key card – possibly connected to the laptop – to open locked guestroom doors.

The locks on more than 1 million guestroom doors are in various stages of being repaired, following the revelation this summer that they may be vulnerable to hackers.

The New York Marriott Marquis, the biggest hotel in Manhattan, for instance, just completed updating all of its nearly 2,000 door locks. The hotel is one of thousands of properties with guestroom locks manufactured by Onity, a division of United Technologies. An Onity website also shows Sheraton, Hyatt, Holiday Inn, Fairmont, Radisson and other well-known hotels from Paris to Perth as also having its locks updated.

The hacking tool, according to Petra’s alert, could be made for about $50 in easy-to-acquire electronic parts.

“Please train and notify your hotel staff that these burglaries are spreading across the country,” Petra’s alert cautioned hoteliers. “Hotel staff should be vigilant while they are on the guest floors and paying attention to guests walking through hallways…Take time to watch guests walking through your hallways to ensure they are going to a room and entering it. Be very suspicious of someone carrying a laptop or small bag wandering the hallways. Greet guests and ask them if they need assistance.”

Onity did not immediately return an e-mail seeking comment about the issue. But in a statement updated for December on its website, Onity says that as of Nov. 30, it has shipped hardware to fix 1.4 million hotel door locks. The hardware includes mechanical caps and security screws that “block physical access to the lock ports that hackers use to illegally break into hotel rooms.”

For more:  http://www.usatoday.com/story/hotelcheckin/2012/12/14/hotels-fixing-flaw-that-made-room-locks-vulnerable-to-hackers/1769081/

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Filed under Crime, Guest Issues, Liability, Maintenance, Management And Ownership, Risk Management, Technology, Theft

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by | December 13, 2012 · 7:42 am

Hospitality Industry Employment Risks: California Restaurants In "Well-Known Tourist Areas" Investigated By U.S. Dept. Of Labor Agree To Pay $670,000 In "Unpaid Minimum Wages And Overtime"

“…(Wage and Hour Division investigators)…found widespread labor violations among restaurants in well-known tourist areas in San Francisco and throughout Los Angeles County…culture of noncompliance Hospitality Industry Wage and Hour Litigationadversely impacts the wages and working conditions of many low-wage, vulnerable workers…”

Wage and Hour Division investigators with the U.S. Department of Labor conducted comprehensive reviews of payroll records and employment practices in both San Francisco and Los Angeles, in addition to employee interviews, and found that restaurants were violating minimum wage, overtime and record-keeping provisions.

As a result, 273 restaurant workers will divvy up $672,333 in unpaid minimum wages and overtime compensation, according to the feds.

The Fair Labor Standards Act requires that covered employees be paid at least the federal minimum wage of $7.25 per hour, as well as time-and-a-half of their regular rates for hours worked over 40 per week. The law also says employers must keep accurate records of employees’ wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. If employers don’t abide by these rules, they are liable to pay back wages and an equal amount in liquidated damages to employees.

For more:  http://blogs.sfweekly.com/thesnitch/2012/12/restuarant_workers_wage_and_hour_division.php

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by | December 12, 2012 · 7:22 am

Hospitality Industry Theft Risks: Illinois Restaurant Manager Charged With Stealing Over $10,000 In Employee Paycheck Scam; Forged Names On Bogus Paychecks

“…she allegedly used information records of at least four former workers to pull off the scam, which came to light only after one of those former workers took concerns to the restaurant’s owner…created the accounts, employee theft“clocked in” workers to show they worked certain hours and then forged their names on the resulting paychecks…”

The manager of the Jerseyville McDonald’s restaurant was charged this week, accused of theft for allegedly using former workers’ information to create bogus paychecks that she cashed for herself.

The amount of money involved is likely in the tens of thousands of dollars, although Jersey County State’s Attorney Ben Goetten said the case still is being investigated.

“This should be a wake-up call to other business owners out there,” he told The Telegraph.

Officially, the amount of money taken is listed in the charge as between $10,000 and $100,000.

The alleged victim, Lora Dover of Carrollton, said she became alarmed after being told by Medicaid that she was not eligible for her latest disability check because of unreported income from 2012. Turns out, she had not worked at the McDonald’s in 2012.

For more:  http://www.thetelegraph.com/news/local/article_8692a192-43e5-11e2-b4f6-001a4bcf6878.html

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