Category Archives: Insurance

by | November 6, 2012 · 6:56 am

Hospitality Industry Property Risks: Indiana Hotel Fire Caused By "Electrical Malfunction Of Room's Heating Unit"

“…investigators discovered an electrical malfunction in the room’s heating unit…the sprinkler system put the fire out, saving a large portion of the building from catching fire…”

An electrical malfunction forced several occupants of the Fort Wayne Marriott to evacuate after a fire broke out in a second floor room. Fort Wayne firefighters were called to the hotel on East Washington Center Road just after 11:30 Monday night.

According to Fort Wayne Fire Department Battalion Chief Mike Pinkham, the fire was confined to a second floor room on the hotel’s west side.

Fire officials and hotel management didn’t know how many occupants were in that wing of the building, but 12 to 14 rooms were occupied. No one was inside the room where the fire started.

Heavy smoke filled the entire wing on the second floor. Fire alarms sent most occupants outside into frigid temperatures. Pinkham said officers with the Fort Wayne Police Department helped evacuate several occupants while fire crews were arriving.

For more:  http://www.wane.com/dpp/news/local/marriott-hotel-evacuated-after-electrical-fire

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by | November 5, 2012 · 7:10 am

Hospitality Industry Employment Risks: Hotels And Restaurant Groups Begin Limiting Employee Hours To Below 30 Hours Per Week To Avoid Health-Care Law Requirements

Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week. That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker.

The shift is one of the first significant steps by employers to avoid requirements under the health-care law, and whether the trend continues hinges on Tuesday’s election results. Republican presidential nominee Mitt Romney has pledged to overturn the Affordable Care Act, although he would face obstacles doing so.

Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul, said Chief Executive Chris Russell. The company has 210 franchise hotels, under the Sheraton, Fairfield Inns, Hampton Inns and Holiday Inns brands.

“The tendency is to say, ‘Let me fill this position with a 40-hour-a-week employee.’ “Mr. Russell said. “I think we have to think differently.”

Pillar offers health insurance to employees who work 32 hours a week or more, but only half take it, and Mr. Russell wants to limit his exposure to rising health-care costs. He said he planned to pursue new segments of the population, such as senior citizens, to find workers willing to accept part-time employment.

He described the shift as a “cultural change” toward hiring more part-timers and not a prohibition against hiring full-timers.

CKE Restaurants Inc., parent of the Carl’s Jr. and Hardee’s burger chains, began two months ago to hire part-time workers to replace full-time employees who left, said Andy Puzder, CEO of the Carpinteria, Calif., company. CKE, which is owned by private-equity firm Apollo Management LP,  offers limited-benefit plans to all restaurant employees, but the federal government won’t allow those policies to be sold starting in 2014 because of low caps on payouts. Mr. Puzder said he has advised Mr. Romney’s campaign on economic issues in an unpaid capacity.

For more:  http://online.wsj.com/article/SB10001424052970204707104578094941709047834.html

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by | November 3, 2012 · 7:30 am

Hospitality Industry Employment Risks: Hawaiian Restaurant Group Sued By EEOC For "Rampant Sexual Harassment Of Female Employees"

In its lawsuit, the EEOC asserts that a class of at least nine female servers and bartenders were repeatedly bombarded with sexual propositions, explicit sexual remarks, groping, grabbing, and exposure of genital areas by male managers, and even ordered to perform sexual favors for high-level Señor Frog officials. 

Señor Frog’s, a popular chain of Mexican-themed restaurants and bars, violated federal law by allowing the rampant sexual harassment of its female employees in Honolulu by high-level officials including the company owner, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it filed today against both Señor Frog’s and Altres, Inc.  Altres, a Hawaiian staffing company, was contracted by Señor Frog’s to provide human resources services and oversee the company’s non-management staff at the Señor Frog’s restaurant & bar in Honolulu.

The widespread sexual harassment was out of control, stemming from Señor Frog’s owner himself, who permitted other Honolulu restaurant managers and supervisors to do the same, according to the EEOC.  Women were also treated differently with respect to being passed over for promotions, obtaining less favorable shifts and earning less than their male counterparts.

The EEOC contends that at least one of the victims was compelled to quit as a result, while others were disciplined or had their hours cut in retaliation for complaining of the harassment and discrimination.  As the joint employer, the EEOC claims that Altres is also liable for the hostile work environment endured by the Señor Frog’s staff, many of whom were employed by Altres on paper, according to company records.

Such alleged conduct violates Title VII of the Civil Rights Act of 1964.  The EEOC filed suit (EEOC v. La Rana Hawaii, LLC dba Señor Frog’s & Altres, Inc., Case No. CV-11-00799 LEK BMK) after first attempting to reach a pre-litigation settlement through its conciliation process.  The EEOC’s suit seeks all available relief, including lost wages, front pay and compensatory and punitive damages for the class of women.  Substantial remedies, including policy changes and staff training, are also being sought by the EEOC in order to prevent and appropriately address future instances of sexual harassment, discrimination and retaliation.

For more:  http://www.eeoc.gov/eeoc/newsroom/release/11-2-12.cfm

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by | November 2, 2012 · 6:48 am

Hospitality Industry Legal Risks: "Data Breach Class-Action Lawsuits" Are Increasing As Judges Widen View To Include "Future Damages"; Average Settlements Of $2500 Per Plaintiff

“…Until a couple of years ago, courts would routinely dismiss lawsuits stemming from data breaches, such as the latest in South Carolina, unless the victims could show specific damages. Judges have since widened their view and are awarding class-action status to lawsuits that can show actual damages or a real possibility of future damages…”

The payout for companies on the losing side of a class-action suit can be substantial. A recent survey of data breach litigation found the average settlement award of $2,500 per plaintiff, with mean attorney fees reaching $1.2 million, according to a study by Temple University Beasley School of Law.

How federal courts define the damages people suffer from data breaches is broadening dramatically, leaving unprepared companies at greater risk of big payouts in class-action lawsuits, lawyers from a prominent law firm say.

Jeffrey Vagle, a lawyer with Pepper Hamilton, described as a “sea change” judges’ thinking. “Courts are starting to pick up on the fact that the data that can get out there can cause serious harm, maybe not immediately, but sometime in the near future,” Vagle said.

Examples include a case in which a laptop containing unencrypted personal data of Starbucks employees was stolen. While there was no evidence that the data was misused, the Ninth Circuit Court ruled in 2010 that the risk alone was enough to warrant a lawsuit, Vagle and colleague Sharon Klein said in a Client Alert published on the law firm’s website.

Data breaches have become a fairly common occurrence among companies of all sizes. Last year, 174 million data records were loss in 855 separate incidents, according to a recent report from Verizon. A 2011 Ponemon Institute survey of 583 IT and IT security professionals in the U.S. found that 90 percent of the organizations they represented had suffered at least one data breach.

To lessen potential damages, Pepper Hamilton recommends beefing up technical and physical security wherever possible. While no technology is 100% hacker proof, courts tend to compare what a company has in place to what is considered best practices for businesses of the same size and in the same industry. Taking all reasonable steps to prevent data theft can lessen damages.

Also, information shouldn’t be linked to individuals, unless absolutely necessary, and a notification policy needs to be in place, so people affected by data breaches are warned as quickly as possible.

A bill pending in Congress would set a national standard for data breach notification, replacing the variety of state laws that exist today. Introduced in June, the Data Security and Breach Notification Act would also set maximum damages and define what is considered a breach.

Irrespective of the bill’s fate, companies need to establish clear policies and procedures for handling data breaches when they occur. Klein recommends a dry run to ensure that everyone understands the steps that need to be taken.

“Many companies still believe that it only happens to the other guy,” Klein said. “And because of that, [they] have not done the blocking and tackling and preventative work upfront.”

For more:  http://m.csoonline.com/article/720128/courts-widening-view-of-data-breach-damages-lawyers-say?goback=.gde_922967_member_180838402

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Filed under Claims, Crime, Guest Issues, Insurance, Liability, Management And Ownership, Risk Management, Theft

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by | November 1, 2012 · 9:21 am

Hospitality Industry Property Risks: Hotels Suffer Extensive "Water Damage" From Hurricane Sandy, Requiring An "Extraordinarily Complicated Repair Process"

“…when it comes to water damage, trust the experts…hotels in New Orleans made it through Katrina and Gustav with clear emergency plans in place. And where there is water, there’s potential for mold.”

“Mold and water damage may be confounding to many hotel managers because it is not something one customarily knows a lot about,”

Hotels in the affected areas felt Hurricane Sandy’s hardest punch Monday night, but as properties from the East Coast to the Midwest deal with storm damage and after-effects, it’s worth it to revisit safety and security procedures for everything from water damage to dealing with irate guests. Here’s a quick roundup of articles from current sources and Hotel Management’s archives to help navigate the storm:

CRISIS COMMUNICATIONS
First off, Eblin Group’s Scott Eblin shares the five tips leaders can glean from New York City’s Mayor Michael Bloomberg about crisis communications. The gist: project quiet confidence, be consistent and frequent, be relevant, make specific requests, and put the team front and center.

Next check out “Crisis situations call for clear communication plans” from the Hotel Management archive.

CLEANING UP
Learn from hoteliers who dealt firsthand with Hurricane Katrina; when it comes to water damage, trust the experts. From “Lessons learned in the Big Easy,” (Hotel Management, 2009) see how hotels in New Orleans made it through Katrina and Gustav with clear emergency plans in place.

And where there is water, there’s potential for mold. Check out the EPA’s list of ten things to know about mold here, as well as resources for flooding and mold remediation. (Scroll to the bottom of the article).

It will take some time to assess flood damage following Hurricane Sandy, but one lesson hoteliers have learned over the years is to hire the experts when it comes to mold damage. As Colin Reed, Gaylord Entertainment’s chairman and CEO, said following the extensive Gaylord Opryland flooding in 2010, “flood damage requires an extraordinarily complicated repair process.”

Not only is the repair process something best left to experts, the legal issues also may be too murky to handle on your own. “Mold and water damage may be confounding to many hotel managers because it is not something one customarily knows a lot about,” said Karen Morris, a lawyer specializing in hotel litigation and Hotel Management’s legal columnist. “The good news is that managers do not need to be even semi-experts in this field. Rather, hire an expert and follow his/her advice concerning frequency of inspections, methods of inspection, and necessary clean up.”

So what about insurance claims? Check out Hotel Management archived articles about contingent business interruption coverage and steps for handling an insurance claim.

For more:  http://www.hotelmanagement.net/property-security-and-safety/what-you-need-to-know-about-cleaning-up-after-sandy

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by | · 6:30 am

Hospitality Industry Legal Risks: Restaurants And Bars Are Being Sued For "Illegally Playing Licensed Music" By Major Protective-Rights Organizations; "Thousands Of Dollars Per Violated Song"

“…Broadcast Music, Inc. has sued hundreds of establishments across the country, including bars and restaurants in southwest Ohio, for playing BMI-licensed songs without a proper license…a search of civil court records shows that BMI Inc. — one of three main protective-rights organizations — usually settles out of court or gets a summary judgement and, in either case, collects thousands of dollars per violated song…”

Dozens of Ohio businesses have been sued and made to pay tens of thousands of dollars for playing music without proper licensing. The lawsuits are part of a concerted effort by such organizations to enforce copyrights and could serve as a warning to other businesses illegally playing licensed music.

“The entertainment industry is in a frenzy not knowing how to protect – put fences around — their copyrights in the digital age, because there’s nothing really that can preclude a perfect digital copy,” said University of Dayton law professor Tracy Reilly, who teaches courses about real property and intellectual property.

The Pub at The Greene in Beavercreek paid more than $30,000 to BMI after a Southern Ohio United States District Court civil case for playing four BMI-licensed songs such as Van Morrison’s Brown Eyed Girl and Johnny Cash’s I Walk The Line.

“How many times do you go into a restaurant and hear them playing a radio station, for example,” said attorney David Rickert, who represented The Pub but could not speak directly about the case due to a confidentiality clause. “Technically, you need a license for that. I think it’s something people just aren’t aware of. Now they’re starting to crack down a little bit on it.”

For more:  http://www.daytondailynews.com/news/news/crime-law/area-bars-sued-for-lack-of-music-licenses/nSsqX/

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by | October 31, 2012 · 6:07 am

Hospitality Industry Safety Risks: Hotel Fined $70,000 After Employee Loses Fingers During "Routine Test Of Emergency Generator Equipment"

“…a Toronto Hilton employee saw a leak during a routine test on the hotel’s emergency generator equipment. As he leaned in to get a better look, his hand slipped into a fan. The fan’s blades cut off his fingers…”

A hotel company has been fined $70,000 after one of its workers lost some of his fingers on the job.

Justice of the Peace Kevin Madigan fined Northstar Hospitality GP Inc., which owns the Hilton hotel, for violating the Occupational Health and Safety Act. Northstar Hospitality pleaded guilty for failing to ensure the generator’s parts were guarded.

The court added a 25 per cent surcharge to the fine, which goes toward a provincial government fund for victims of crimes.

For more:  http://www.thestar.com/news/gta/article/1279358–hotel-owner-fined-70-000-after-worker-loses-fingers

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by | October 30, 2012 · 6:12 am

Hospitality Industry Property Risks: Massachusetts Hotel Roof Detaches During Storm Causing Water Damage

“…about 25 percent of the roof had become separated, and he said it is a possibility that more could become detached as the storm progresses…”

Earlier this evening, high winds damaged the membrane roof of the DoubleTree Hilton Hotel in Middleton and Danvers. Some of the roof started to separate, and the hotel is experiencing water damage as a result.

The Fire Dept. has notified the Middleton building inspector and electrical inspector, as well as the Danvers electrical inspector of the damage.

A few hotel guests staying on the recently renovated 8th floor were moved because of the water damage.

“The hotel staff is working to mitigate any water problems inside the rooms but as far as the actual roof repair that cannot be undertaken until the storm is over,” said Twiss, who said it would be too dangerous at this time.

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by | October 29, 2012 · 7:00 am

Hospitality Industry Information Security Risks: Report Shows "Computer Password Theft" Has Increased Dramatically As Users Fail To Make Complex Passwords; Cybercrime Now Totals $110 Billion Annually

“…Only about half of computer users make complex passwords for themselves…In the first six months of 2012 alone, hackers stole over 30 million passwords on hacks of just three online services: eHarmony, Zappos and lawyer-friendly LinkedIn. Another recent survey, unconnected to the Norton survey, concurrently found that password theft is up 300 percent in 2012…”

The 2012 Norton Cybercrime Report is now out and it points to an incomprehensible laziness on the part of American computer users when it comes to using passwords.

According to this report, nearly three-quarters of adults have been the victim of a cybercrime (averaging a little under $300 per incident), totaling over 70 million people. The worldwide annual total of cybercrime is estimated at $110 billion.

That is coupled with two other problems: people use the same password for multiple functions, and people use passwords that are, in and of themselves, too simple.

The Norton survey was conducted with 13,000 adults in 24 countries. It found that nearly half of those responding do not use a password that combines phrases, letters, numbers, capitalized letters, lower case letters and symbols, which create complex passwords that are far more difficult to hack than passwords that do not have those things.

The survey showed that nearly a third of all respondents have been notified by an email service, social network, or bank to change their passwords. The bank figure—13 percent––is particularly alarming, implying that nearly one in eight people have had their bank account passwords compromised.

Seventeen percent of people store passwords to other accounts inside another password-protected account. Once one password is stolen, the keys to those other accounts are included.

More? A report out the last week of September found that one in 10 people had “1-2-3-4” as their four digit password. My guess is that a substantial number also have “1-1-1-1” and “0-0-0-0” as well.

For more:  http://www.akronlegalnews.com/editorial/5202

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by | October 27, 2012 · 6:13 am

Hospitality Industry Property Risks: Nevada Restaurant Fire Caused By "Overheated Commercial Stove" That Led To Wood In Attic Catching Fire; $75,000 In Damage

“…Investigators say over the last year or so, overheating from a commercial stove led heat to creep up a wall and into the attic of the building, getting wood hot enough to finally catch fire…”

An overheated stove led to the fire that caused $75,000 in damages to a Genoa restaurant Friday morning.

Douglas County investigators say shortly before 9AM, they got the call about the fire at the Genoa Station Grill and Bar, a business about 18 months old near Genoa Town Hall.

The fire broke out in the kitchen area and was contained to the kitchen and attic area. SR 206, which runs through Genoa , was closed for about two hours. No one was hurt.

For more:  http://www.kolotv.com/home/headlines/Fire-Damages-Genoa-Restaurant-176039641.html

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