Category Archives: Insurance

by | August 18, 2010 · 7:28 am

Hospitality Industry Health Care: Smaller Hotel Owners Will Struggle With “Medical Loss Ratio” And Must Find Hospitality Industry Health Care Insurance Specialist

The Affordable Care Act sets a minimum threshold for what’s known as the “medical loss ratio” — the percentage of premium dollars that go into medical care (a “loss” from Wall Street’s view) rather than into overhead or profits. For plans sold to small businesses or directly to individuals, that ratio must be at least 80 percent; for plans sold to large groups, it must be at least 85 percent.

For big insurance companies that sell predominantly to big employers, the medical loss ratio shouldn’t be hard to meet. With their economies of scale, these insurers and employers together provide coverage at relatively low administrative cost (although, it should be noted, Medicare’s overhead is even lower). But smaller insurers that deal primarily with individuals or small businesses will have a tougher time. Among other things, they typically lose 8 percent of premiums on commissions to agents and brokers who sell policies on their behalf. (Once the insurance exchanges exist, much of that cost will disappear.) These are also the insurers most likely to bilk consumers, since individuals buying coverage on their own typically lack the knowledge — or ability — to bargain as shrewdly as corporate benefits managers do. (The exchanges should also help with improved information and bargaining leverage.)

There’s leeway in the rule in two key places. The law doesn’t dictate a precise formula for calculating the medical-loss ratio. It’s up to the administration which “care management” activities count as medical care, whether taxes should be part of the calculation, and the extent to which carriers can average out the ratio among different plans. And while the law calls for the requirement to take effect starting in January 2011, the Department of Health and Human Services has the authority to phase it in; Sebelius could, for instance, set the floor at 70 percent for 2011 and then gradually ratchet it up until 2014. Some insurance and employer lobbyists have urged the administration to move slowly, lest insurers unable to meet those requirements go out of business. Then again, insurers that can’t meet those requirements are, by definition, less efficient.

For more:   http://www.tnr.com/blog/jonathan-cohn/77080/get-ready-sebelilus-v-insurers

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by | August 16, 2010 · 8:28 am

Hospitality Industry Insurance Risk Management: Las Vegas Hotel Has Insurance Policy That Fails To Name Hotel As “Additional Insured”, Complicating Payment Of A Submitted Claim For Structural Damage

The floor collapsed and dropped almost a foot, resulting in damage to the structures of both the lounge and the hotel.

The Luxor also sought compensation as an “additional insured.” The lease between the casino and developer required the latter to name Luxor as an additional insured on all policies. No doubt the Luxor assumed (that dangerous word!) that this language covered its exposure to loss.

However, the developer’s insurance policy restricted the coverage of an additional insured. Luxor’s entitlement was limited to indemnification for money it paid to people injured by the developer’s acts or omissions. The casino was not entitled to compensation for its own losses…

The casino invoked the Unfair Insurance Claims Practices Statute, a law adopted by numerous state legislatures.

The Luxor Hotel & Casino Hotel contracted with a developer to construct and operate a restaurant called the Cathouse Lounge (nothing is subtle in Vegas) on the mezzanine level. The developer gutted the space, made structural modifications and installed new fixtures and equipment.

One night during Cathouse’s third month in operation, while a large crowd was enjoying good food and fun ambiance, a portion of the structure began to buckle. The floor collapsed and dropped almost a foot, resulting in damage to the structures of both the lounge and the hotel. The lounge was evacuated immediately. Thereafter the county Department of Building Services ordered Luxor to close both the Cathouse and damaged portions of the hotel pending repairs. Luxor hired an expert to determine the cause of the floor’s failure. Turns out the renovations were insufficient to support the sizeable number of people the lounge attracted.

Both Luxor and the developer paid to repair the structural deficiencies and for damage to their respective property. The Cathouse reopened in three weeks and submitted a claim to its insurance company. The Luxor also sought compensation as an “additional insured.” The lease between the casino and developer required the latter to name Luxor as an additional insured on all policies. No doubt the Luxor assumed (that dangerous word!) that this language covered its exposure to loss.

However, the developer’s insurance policy restricted the coverage of an additional insured. Luxor’s entitlement was limited to indemnification for money it paid to people injured by the developer’s acts or omissions. The casino was not entitled to compensation for its own losses. Yikes!

This is a very significant limitation. Luxor was seeking compensation for costs of repairing structural damage to its own facility, replacing its own destroyed property and interruption of its business. The insurance company denied the claim based on the indemnification-only coverage, and the court upheld the denial. This was not the plan Luxor had in mind when it included the requirement that the casino be listed as an additional insured in the developer’s lease.

But lawyers are clever folks and Luxor was well-represented. The casino invoked the Unfair Insurance Claims Practices Statute, a law adopted by numerous state legislatures. This act requires, among other consumer protection provisions, that insurance companies respond to claim letters within 30 days of receipt. The insurance company in the Luxor case waited months before acknowledging the hotel’s claim. The penalty for violation is mandatory payment of the claim. This is true even though the policy does not otherwise cover the claim. So the court awarded Luxor the money it sought. Sometimes the back door can be a great alternative.

For more:   http://www.hotelworldnetwork.com/legal/read-your-insurance-contract-closely-then-read-it-again

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by | August 12, 2010 · 6:41 pm

Hospitality Industry Foodborne Illnesses: Poultry (17%), Beef (16%) And Leafy Vegetables Cause Most Illnesses Reported That Included 18 Deaths In 2007 In U.S.

Among the 497 foodborne outbreaks with a laboratory-confirmed single etiologic agent reported, norovirus was the most common cause, followed by Salmonella. Among the 18 reported deaths, 11 were attributed to bacterial etiologies (five Salmonella, three Listeria monocytogenes, two Escherichia coli O157:H7, and one Clostridium botulinum), two to viral etiologies (norovirus), and one to a chemical (mushroom toxin).

Foodborne agents cause an estimated 76 million illnesses annually in the United States (1). Outbreak surveillance provides insights into the causes of foodborne illness, types of implicated foods, and settings of foodborne infections that can be used in food safety strategies to prevent and control foodborne disease. CDC collects data on foodborne disease outbreaks submitted from all states and territories. This report summarizes epidemiologic data for the 1,097 reported outbreaks occurring during 2007 (the most recent finalized data), which resulted in 21,244 cases of foodborne illness and 18 deaths. Among the 497 foodborne outbreaks with a laboratory-confirmed single etiologic agent reported, norovirus was the most common cause, followed by Salmonella. Among the 18 reported deaths, 11 were attributed to bacterial etiologies (five Salmonella, three Listeria monocytogenes, two Escherichia coli O157:H7, and one Clostridium botulinum), two to viral etiologies (norovirus), and one to a chemical (mushroom toxin). Four deaths occurred in outbreaks with unknown etiologies. Among the 235 outbreaks attributed to a single food commodity, poultry (17%), beef (16%), and leafy vegetables (14%) were most often the cause of illness.

For more:   http://www.foodconsumer.org/newsite/Non-food/Disease/foodborne_illness_1208100621.html

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by | August 11, 2010 · 7:24 pm

Hospitality Industry Safety Risks: OSHA Inspectors Can Cite “Willful Violations” If Management Ignores Employee Complaints

A “willful” violation can occur if the employer knew that he was violating a standard or if he was reckless. A good way to convince an OSHA inspector of recklessness (and thus willfulness) is to ignore employee complaints of danger, or worse, accident reports.

A lawyer knowledgeable on OSHA issues will serve as a buffer between the agency and the company’s management. He can make sure that responses to document requests are neither too broad nor too narrow.

A careful employer will review employee complaints, accident reports and minutes of safety meetings, and make sure that every item properly is evaluated and if found to be a problem, either fixed or scheduled for fixing with alternative protective measures implemented in the interim. Employers should not allow unaddressed items in such documents to smolder in their files, ready to be fanned into willfulness by an OSHA inspector.

For more:   http://ehstoday.com/standards/target-new-osha-sheriff-1339/index1.html

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by | August 10, 2010 · 3:27 pm

Hotel Industry Employee Injury Risk Management: Hotel Management Must Increase Training To Reduce Repetitive-Stress Injuries To Housekeepers

“Anybody who runs a hotel has to be crazy,” Davis said, not to address any problems that can lead to injuries among employees because of the implication for worker’s compensation.

Hyatt housekeepers had the highest risk of injury, according to the study. The lowest risk were with the Hilton chain. The problem is housekeepers are prone to repetitive-stress injuries from continually doing such things as changing sheets, washing bathroom floors and vacuuming.

Service workers, especially hotel housekeepers, have higher rates of on-the-job injuries, according to a report in the American Journal of Industrial Medicine.

The 2009 study analyzed injury records from 2003-05 at 50 hotels operated by the top-five hotel companies. Jobs studied included housekeepers, dishwashers, kitchen workers and banquet servers, representing 46 percent of the study population.

Since the study came out, the hotel industry nationwide has been looking at new ways to reduce injuries. Some properties have added extra employees for housekeepers don’t have to do heavy lifting.

For more:  http://www.news-journalonline.com/business/local-business/2010/08/07/hotels-seek-methods-to-reduce-worker-injuries.html

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by | August 9, 2010 · 2:10 pm

Hospitality Industry Employee Safety Training: OSHA Training Provisions Require That Management “Ensure That Employees Are Comprehending Instruction”, Specifically Lockout, Respiratory Protection And Bloodborne Pathogens

“If a reasonable person would conclude that the employer had not conveyed the training to its employees in a manner they were capable of understanding, then the violation may be cited as serious.”

OSHA’s general policy is that if an employee receives job instructions in a language other than English, training and information must also be conveyed in that language. Similarly, if employees are not literate, telling them to read training materials will not satisfy the employer’s training obligation.

OSHA adds that its training provisions contain a variety of specific requirements to ensure that employees are comprehending instruction. For example, standards covering lockout/tagout, respiratory protection, and bloodborne pathogens each require that employers take measures to ascertain the level to which the employee has comprehended the safety provisions.

For more:   http://enviro.blr.com/environmental-news/EHS-management/industrial-facility-compliance-training/Workers-Must-Understand-Training-118317/

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by | August 7, 2010 · 6:55 am

Hospitality Industry Data Theft: Hotel Owners Must Prevent Breaches Of Credit Card Processing Systems By “Cyber-Criminals” Who Install “Malicious Programs” To Steal Data

“… remote attackers installed a malicious program into the card processing system of Englewood, Colo.-based hotel chain Destination Hotels & Resorts. Guests at 21 Destination properties may have been subjected to credit card theft…”

“..the Westin Bonaventure Hotel & Suites in Los Angeles disclosed a possible data breach of its POS systems dating back to 2009. Also, between November 2008 and May 2009, the computer systems of some Radisson hotels in the United States and Canada were illegally accessed. And the computer systems of Wyndham Hotels & Resorts were accessed on two separate occasions by cybercriminals who stole customers’ card numbers, expiration dates and other data…”

Cybercriminals last year targeted hotels more than any other industry for credit card theft, according to a recent report by data security company Trustwave. Hotels are being targeted because they have large amounts of credit card data and frequently neglect to implement the most basic security precautions, such as changing default passwords or ensuring programs are up to date, said Nicholas Percoco, senior vice president of Trustwave’s SpiderLabs.

As a result, attackers commonly gain entry into a hotel’s network by exploiting default passwords on point-of-sale (POS) applications, added Dave Ostertag, manager of investigative response at Verizon Business. From there, customized malware is loaded onto the hotel’s transaction server that steals credit card information as a transaction occurs.

In March, the Westin Bonaventure Hotel & Suites in Los Angeles disclosed a possible data breach of its POS systems dating back to 2009. Also, between November 2008 and May 2009, the computer systems of some Radisson hotels in the United States and Canada were illegally accessed. And the computer systems of Wyndham Hotels & Resorts were accessed on two separate occasions by cybercriminals who stole customers’ card numbers, expiration dates and other data.

For more:  http://www.scmagazineus.com/rampant-hotel-data-theft/article/174579/

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by | August 4, 2010 · 3:25 am

Hospitality Industry Alcohol Sales Liability: Hotel And Restaurant Bar Owners Can Face Huge Damages From Lawsuits Resulting From Drunk Patrons Car Accidents

Make sure you have liquor liability insurance and that there’s plenty of financial space between you and your business.

“These types of cases can put a bar, a grocery store, convenience store, hotel or restaurant out of business and if they’re not careful, the people that are behind the ownership could see their houses or bank accounts put at risk,”

A recent Supreme Court ruling is going to put more pressure on businesses that sell alcohol.

Bars, restaurants, and even convenience stores could face stiffer penalties for selling alcohol to someone who ends up injuring someone else in a car accident.

On Monday, the Supreme Court of South Carolina upheld a 2003 ruling that awarded $10 million to a man who sued a bar after one of its patrons ran into him on a Greenwood highway.

“These types of cases can put a bar, a grocery store, convenience store, hotel or restaurant out of business and if they’re not careful, the people that are behind the ownership could see their houses or bank accounts put at risk,” said Christian Stegmaier, a retail and hospitality specialist at Collins and Lacy in Columbia.

For more:  http://www.live5news.com/Global/story.asp?S=12900444

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by | August 2, 2010 · 7:18 am

Hospitality Industry Health And Safety Risks: Hotel Owners Found Liable For $34 Million Resulting From Carbon Monoxide Leak Injuring 23 Employees At Hotel Restaurant

A Baltimore jury has awarded $34.3 million to 23 employees of an Inner Harbor steakhouse who suffered brain damage as a result of carbon monoxide poisoning.

The plaintiffs worked for the Ruth’s Chris Steak House at the Pier V Hotel. The restaurant was evacuated on Feb. 2, 2008, after employees complained of dizziness and nausea. Carbon monoxide in the air was measured at potentially fatal levels.

Attorney Billy Murphy, who represented the plaintiffs, said Wednesday that the leak went on for weeks before the evacuation and that the hotel had removed a safety device that would have detected the problem.

The lawsuit named the hotel’s operator and owner. Murphy says Ruth’s Chris was not at fault.

Attorneys for the defendants could not immediately be reached for comment.

For more:   http://www.businessweek.com/ap/financialnews/D9H8A21O0.htm

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by | August 1, 2010 · 6:59 pm

Hotel Pool Liability Insurance: Hotel Owners Must Carry Umbrella Liability Insurance

“…especially with huge pools, umbrella liability insurance over and above your standard homeowners coverage is a must. Drownings, he says, can trigger court verdicts in excess of $1 million…”

Having a heart attack in a commercial pool is no exception when it comes to swimming pool liability. Goldenfarb says he just won a case in Orlando in which a drowning victim had a heart attack. Problem: The hotel pool lacked a defibrillator.

Hospital admission charges for Florida non-fatal drowning hospitalizations in 2008 tallied $16 million, according to the Florida Health Department. Commercial insurance paid just 34 percent of that.

â–  Limit alcoholic beverages around the pool. The Centers for Disease Control says alcohol use is involved in up to half of adolescent and adult deaths associated with water recreation.

â–  Be sure life saving devices are nearby and in good condition.

■ Never rely exclusively on flotation devices or posted warning signs. They won’t deter lawyers.

â–  Keep children away from pool filters and other mechanical devices that may injure them. In case of emergency, know how to shut off these devices and clearly post the information.

For more:  http://www.palmbeachdailynews.com/business/pool-owners-have-added-liability-834122.html?cxtype=rss_columnists_300796

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