Category Archives: Insurance

by | April 9, 2010 · 6:48 am

Hospitality Industry Insurance: Employment Practices Liability Insurance Protects Employers From “Workplace Bullying” Claims

Employers are turning to ’employment practices liability’ insurance to protect against bullying-type claims (harassment, wrongful termination, etc.) for which companies pay $5,000 to $100,000 in annual premiums with deductibles of $10,000 to $25,000. The median compensation in wrongful termination cases topped $200,000 in 1995, up 45% from the year before.

Workplace bullying includes all types of interpersonal harassment and psychological violence. Few are blatantly illegal; most are not. It crosses all organizational levels, from the top down and from the bottom up. Unchallenged bullying poisons the workplace, undermines productivity, and contributes to a skyrocketing exposure to risk.

The anguish of bullied employees forces them to pay with their health–both psychological and physical–that affects them, their co-workers and their families. It undermines a loyal employee’s commitment to the organization, while eroding personal well-being.

Relationships among employees, and between management and staff, are strained more than ever because of time and productivity pressures. Pressure, to some, justifies the mistreatment of others. When mistreatment goes unchallenged, even passive individuals are capable of explosive rage that can result in headline episodes of workplace violence.

http://www.workplacebullying.org/employers.html

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by | April 3, 2010 · 6:42 am

Employment Practices Insurance: Wage And Hour Lawsuits Threaten 80% Of Employers Who Are Not In Compliance With Wage-And-Hour Laws

Now outranking discrimination lawsuits, measured by both number of filings and size of settlements, employment practices lawsuits have become an unforeseen calamity for companies across all industry sectors, the firm said.

Typically, wage-and-hour suits involve allegations that employers have failed to pay wages for time worked, or failed to pay at rates required by law.

According to Advisen, the Department of Labor (DOL) estimates that 80 percent of employers are not in compliance with applicable wage-and-hour laws.

(From a Property-Casualty.com article)  Insurers have been slow to respond with coverage for wage-and-hour lawsuits that have been an escalating threat to companies of all sizes over the past decade, Advisen Ltd. said in a new study.

The 21-page report, “The Threat of Wage-and-Hour Lawsuits,” examines the drivers of these suits and explores recent developments in wage-and-hour litigation. Additionally, it includes a survey of insurers that provide possible coverage.

Typically, wage-and-hour suits involve allegations that employers have failed to pay wages for time worked, or failed to pay at rates required by law.

According to Advisen, the Department of Labor (DOL) estimates that 80 percent of employers are not in compliance with applicable wage-and-hour laws.

Now outranking discrimination lawsuits, measured by both number of filings and size of settlements, employment practices lawsuits have become an unforeseen calamity for companies across all industry sectors, the firm said.

Alterations made to the Federal Labor Standards Act (FLSA) by the DOL in 2004 were originally intended to clarify definitions to make it easier for companies to comply. Instead, it brought focus to the issue and sparked awareness among the plaintiff’s bar, according to the report.

Advisen noted that the DOL and certain state labor departments have stepped up enforcement efforts in recent years, and the DOL has ramped up its Wage-and-Hour Division under the Obama administration.

http://www.property-casualty.com/News/2010/3/Pages/Wage–Hour-Suits-A-Growing-Uninsured-Risk-Advisen-Finds.aspx

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by | April 2, 2010 · 6:48 am

Hospitality Industry Insurance Update: New National Health Law Will Mandate Health Insurance On Hotel And Restaurant Operators With More Than 50 Employees, While Massachussetts Requires Coverage For Businesses With 11 Or More Workers

Don Day is also worried. Day owns eight small businesses in McKinney, Texas, including two restaurants, a boutique hotel and several retail shops.

Although he employs 125 workers, he offers health care for just a few key employees. Just an extra $200 a month per employee for health care could set him back hundreds of thousands of dollars a year — a cost he can’t afford.

“It’s not just me, it’s every small business across this land,” he said. “A lot of small businesses are going to go out of business.”

(From an Associated Press article)   As business owners across the country weigh the new law, they’re looking to Massachusetts for harbingers of things to come.

Massachusetts’ law, which mandates near-universal coverage and requires that businesses with 11 or more workers offer insurance, provided the blueprint for the health law signed by President Barack Obama. Massachusetts employers who don’t comply face annual fines of $295 per worker.

While there’s been plenty of grumbling among business owners that the state law has squeezed them financially during a tough recession, there’s little evidence the law is forcing employers to close or sending them fleeing for the border. Other businesses have welcomed the law and business leaders helped guarantee its passage.

Drawing parallels between the state and national laws is tricky. While both share many of the same tenets — requiring businesses to shoulder more of the burden of health coverage — there are major differences.

The national law doesn’t require businesses offer insurance but hits employers with 50 or more workers with an annual $2,000-per-employee fee if the company doesn’t insure them and the government ends up subsidizing their workers’ coverage.

The national law also grants tax credits for businesses with 25 or fewer workers with average annual wages below $50,000, which Democrats say that will benefit 3.6 million business nationwide. And beginning in 2014, businesses with up to 100 employees will be able to pool their employees in state-created insurance exchanges to increase their negotiating clout with insurance companies — a move supporters say could aid 29 million businesses.

http://www.google.com/hostednews/ap/article/ALeqM5g0ZR7xK3OfnUMkC7pOMMHB6Kl38gD9EPFRI80

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by | March 26, 2010 · 6:06 am

Workers’ Comp Fraud Prevention: State Of Colorado Amends Bill That Would Restrict Video Surveillance That Is Deemed “Intrusive Or Harassing”

The original intent of the bill was to restrict workers’ comp insurers’ use of video surveillance to only cases where the insurer has a reasonable basis to suspect fraud. It also would have imposed a significant fine on insurers that violated the rule. However, the legislation was amended after lawmakers raised concerns that it would seriously hinder insurers’ efforts to prevent fraud.

The amended version prohibits evidence from being introduced at workers’ comp administrative hearings if it is deemed that the surveillance was intrusive, intimidating or harassing. In addition, the evidence would not be permitted if the administrative law judge finds that the investigator, if questioned, misrepresented himself to the claimant and did not disclose on whose behalf he was conducting the surveillance. The legislation would also require insurers to present the surveillance videos to the claimant’s treating physician for review.

http://www.riskandinsurance.com/story.jsp?storyId=375682191

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by | March 25, 2010 · 5:21 am

Hospitality Industry Workplace Safety: Assistant Secretary Of Labor Stresses Need To Increase OSHA Penalties Against Employers Who Do Not Comply With OSHA Standards

Dr. David Michaels, Assistant Secretary of Labor for the Occupational Safety and Health Administration, who emphasized that current OSHA penalties must be increased in order to motivate employers to increase their compliance with the OSHA standards. Michaels stated that environmental laws currently carry much heavier penalties than penalties under the OSH Act, especially where loss of human life is involved.

(From and Hr.cch.com article)    The Workforce Protections Subcommittee of the House Education and Labor Committee held a hearing Tuesday on the “Protecting America’s Workers Act (PAWA) (H.R. 2067).” The bill, introduced by Rep. Lynn Woolsey (D-CA), chair of the subcommittee, addresses three major weaknesses in the Occupational Safety and Health (OSH) Act:

  • It would expand OSHA coverage to more than 8.5 million state and local public employees who currently have limited or no protection from safety and health hazards at work.
  • It also would amend OSHA’s whistleblower provisions to expedite the process because the current delays in decision-making deprives workers of due process.
  • Finally, the bill would update civil and criminal penalties.

http://hr.cch.com/news/safety/032410a.asp

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by | March 23, 2010 · 5:35 am

Hotel Health And Safety Issues: Education On The “Risks For Infestation” Of Bed Bugs May Help Keep Treatment And Legal Costs Down

“Based on the traveling behavior of bed bugs, any industry or travel destination with a high visitor turn over is particularly at-risk for infestation,” said White. “It will be especially important for the hospitality industry to be educated on this matter so they can respond competently to a situation where treatment and legal costs can spike quickly.”

(From a PCTOnline.com article)   Pennsylvania’s hospitality sector has recognized the risks bed bugs pose to their industry and will gather March 25 to attend a bed bug seminar hosted by the Greater Philadelphia Hotel Association (GPHA) to learn how to combat this emerging issue.

GPHA is an association that represents the interests of the hospitality industry throughout Pennsylvania and southern New Jersey. Their activities include civic representation, community partnerships and industry education.

The association’s statewide seminar titled, “Bed Bugs and the Hospitality Industry: Little Bugs, Big Problem” will be held at the downtown Marriott Hotel in Philadelphia, PA, March 25 at 8:30 a.m. The event will address the latest information on bed bugs and the most recent treatment breakthroughs to minimize cost. The seminar will also tackle the problems this pest represents that are unique to the hospitality industry.

Suzanne Geyer, an associate director with GPHA acknowledged that the bed bug seminar would present important information to industry management regarding the correct procedures needed to effectively approach dealing with bed bugs.

“This seminar will be especially important for practitioners because the information provided here is specific to hospitality and will provide a deeper understanding of bed bugs and some of the strategies needed to minimize the operational impact these pests can inflict,” said Geyer.

http://www.pctonline.com/Philadelphia-bed-bug-seminar.aspx

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by | March 20, 2010 · 7:01 am

Hospitality Industry Risk: Smaller Hotels Reporting An “Epidemic” In Theft Of Flat Screen TV’s From Rooms Prompting Many Operators To Install Camera Systems

The theft prompted him to take action, investing in a $1,500 camera system to monitor the walkways outside rooms and, hopefully, he said, act as a deterrent to other would-be thieves.

(From a ReporterNews.com article)   Theft is “frequent enough we have to make a large order every month for linens and supplies we shouldn’t have to,” said Jo Ann Schibi, manager of the MCM Elegante Hotel. “It’s the hotel business. It’s been like this forever.”

Perhaps, but missing televisions have upped the ante for some victimized hotels in Abilene.

Dasi Reddy, owner of the Knights Inn Civic Plaza Hotel downtown, said he’s had six or seven televisions taken from rooms in the past 14 months.

At Motel 6 just west of town and near Interstate 20, eight flat-screen televisions were reported stolen March 7 from an unoccupied room, just two days after a 32-inch television had been reported stolen from a hotel room.

Local staff at the Motel 6 declined to comment, and police were unavailable Friday to discuss the case.

But TV thefts were described as “a new epidemic for us” by Laura Rojo-Eddy, director of corporate communications for Accor North America, the parent company of Motel 6.

The chain began renovations in the second-half of 2008 that included the addition of flat-screen televisions to rooms. With the flat-screen televisions, however, more thefts have followed, said Rojo-Eddy.

“I guess they’re smaller and easier to carry,” said Rojo-Eddy. “The industry kind of has had a problem to take care of them.”

For hotel operators, the losses hurt the bottom line during an economic recession that has included a sharp decrease in travel spending.

With an insurance deductible that doesn’t cover a $200 loss, Reddy said he mainly has paid for the replacement televisions himself.

Several items — including a television, microwave and ice machine — turned up missing March 12 after the departure of guests staying through a church outreach program, Reddy said.

“We want to help them,” said Reddy, who charges churches a reduced rate when they are helping house homeless or other displaced people. The church sponsoring the stay has been able to return some of the missing items to the hotel, he noted.

http://www.reporternews.com/news/2010/mar/19/stolen-tvs-trouble-hotels/

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by | March 18, 2010 · 2:14 pm

Hotel Industry Safety And Surveillance: New Technology From 3VR Security Increases Safety For Hotel Guests

“The system will also allow us to do things we never thought about.” Just some of the uses that are being tested at Hilton Americas-Houston include counting arriving vehicles to determine peak times for staffing and monitoring any vehicle accidents in the garage area to provide guests with needed information for their insurance purposes. Ltd.

(From SecurityInfoWatch.com article)  In order to provide guests with the ultimate in security and customer service, Hilton Americas-Houston, the city’s largest hotel, has enhanced their surveillance systems with cutting edge technology from 3VR Security, Inc. The 3VR platform makes it possible for the property to find relevant surveillance footage in seconds, rather than hours, allowing the hotel to utilize the technology for multiple purposes.

As the number-one convention hotel in the city, Hilton Americas-Houston is the first hotel to utilize 3VR’s facial recognition, license plate recognition and advanced motion analytics to provide the ultimate in guest security. In the hotel security business since 1990, John Alan Moore, director of security and life safety for Hilton Americas-Houston says “I’ve never seen anything that is able to do the things this technology does; it’s light-years ahead of the system we previously used.” In addition to providing the ultimate in security for their guests, the hotel is also able to utilize the 3VR system to ensure the best possible customer service. Hilton Americas-Houston is now able to help guests locate lost possessions with the system’s color, directional and object search capabilities. A guest’s misplaced suitcase can be found almost instantly by following the piece using a search based on color and object, from the time it enters the hotel all along its path throughout the building. With over 7,000 lost guest items per year in lost and found, the system will significantly increase the hotel’s ability to satisfy the customer on even higher levels. Another use for the system that Hilton Americas-Houston has found useful is recognizing repeat customers. According to Moore, “We will be able to tie in with front office systems to flag our Gold Card members in order to be able to blow them away with service. This is another tool to be used to keep Hilton as the leader in the industry.” With 90% accuracy, the system registers few false positives, even picking up good facial info on cameras not specifically designated as facial-recognition. On a humorous note, the system is so sensitive that it has recognized faces that were not actually guests; they were photos of the t-shirts of guests. Moore said “President Obama made an appearance on our skywalk, on a guest’s clothing. That’s how bad the system wants to recognize a face.” This high-sensitivity makes the system a most useful tool for the property, providing the ultimate in guest safety and security.

Moore stated, “The system will also allow us to do things we never thought about.” Just some of the uses that are being tested at Hilton Americas-Houston include counting arriving vehicles to determine peak times for staffing and monitoring any vehicle accidents in the garage area to provide guests with needed information for their insurance purposes. Ltd.

http://www.securityinfowatch.com/node/1315210

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by | March 17, 2010 · 10:04 am

Restaurant Risk Management: Employment Practices Insurance For Workplace “Sexual Harassment” Suits Can Be Rescinded For “Failure To Disclose”

 Applying California law, the United States District Court for the Northern District of California, has held that an insurer was entitled to rescind an employment practices liability policy and to recover the payments made under that policy based on the insured’s failure to disclose on the application for coverage that an employee had resigned after alleging sexual harassment. Carolina Casualty Co. v. RDD, Inc., 2010 WL 597097 (N.D. Cal. Feb. 17, 2010).    

(From a Lexology.com article) The insured, a restaurant owner, received a letter from one of its waitresses on April 28, 2008, advising that she was quitting immediately. The waitress asserted in the letter that she had been sexually harassed by the owner and the managers on weekly basis for the past year, that her complaints about the harassment were met with retaliation in the form of unwanted shift changes and that her mental and physical health was suffering as a result of the events.

The next day, the restaurant contacted its insurance broker to obtain employment practices liability coverage. On behalf of the restaurant, the broker completed and submitted to the insurer an application. Questions 21 and 22 on the application asked: (a) whether, during the past five years, any current or former employee had made any claim or otherwise alleged discrimination or harassment or other Wrongful Acts against any insured; and (b) whether any insured was aware of any fact, circumstance or situation involving any insured that might reasonably be expected to result in a claim. Both questions were answered “no.” The application included notice that if certain key officers of the entity proposed for coverage knew, as of the policy inception date, that the statements in the application were untrue, inaccurate or incomplete, the policy would be void as to those individuals and the entity itself.

On April 30, 2008, the broker sent an e-mail to the insurer stating that a former employee of the restaurant had hired counsel but that no other details were known. The same day, the insurer quoted a price for coverage. The broker then advised the insurer that the number employees had been incorrectly stated on the application submitted, and the insurer issued a revised quote based on the correct number. The insured’s president signed the application the next day, and the policy was issued on July 15, 2008 for the claims-made period of May 5, 2008 to May 5, 2009.

The week before the policy was issued, the former employee filed suit against the restaurant. The insured tendered the action to the insurer under the policy. The insurer defended the action and, ultimately, paid $50,000 to settle it on April 1, 2009. Meanwhile, the insurer first learned of the April 28, 2008 resignation letter on February 2, 2009, and filed suit to rescind the policy three weeks later.

http://www.lexology.com/library/detail.aspx?g=ba82600c-4404-48d8-a65c-853167a52c57

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by | March 15, 2010 · 6:43 am

Hotel Theft Prevention: Flat Screen TV Theft From Hotel Rooms Can Be Minimized By Simple Inventory And Anti-Theft Procedures

We are getting reports of more and more flat panel television thefts from hotels. Here is some theft prevention suggestions that I have found that are working for various hotels.

The majority of flat screen thefts are from in-hotel gyms and workout rooms. The gyms have larger screen TVs than the guestrooms, and they are often unoccupied. It appears that these thefts are probably “inside jobs” by current or former hotel employees, or by outsiders that have colluded with current employees. Employees know the staffing levels, how to sneak in and out of the hotel, and what the security cameras cover. So don’t overlook employees when you investigate these thefts.

Other TV thefts are stolen from common areas of the hotel, such as function rooms, breakfast rooms, etc. There are thefts of TVs from guestrooms, but they are minimal at the time of this writing.

So, what can you do to prevent these thefts? Consider these four simple steps:

  1. Inventory ALL of your flat screen televisions and write down their serial numbers. Prepare a spreadsheet of all the televisions’ serial number, make, screen size and exact location inside the hotel. If the TV is stolen, you will have the exact serial number of that television to report to the Police.
           
  2. Report all thefts to the Police, including the serial number. Take the time to report the theft. Once it is “officially” reported as stolen, it now becomes a felony crime to sell the TV or to be in possession of it. These TVs show up in police raids, pawn shops, and even at other hotels. Courts and District Attorneys often do not file charges against someone found with a TV, if it was never reported stolen in the first place. Protect your right to prosecute the thief, who may turn out to be an employee.
           
  3. Write or paint your hotel name on the back of each TV. Thieves hate this, as they have to clean it off before they can sell them, and it often looks like they altered or removed something from the TV; so people buying the TV get nervous about the purchase. You can buy felt tip pens that contain and write in paint, not regular ink. It is an easy way to inscribe your hotel’s name on each television. Guests won’t see the writing on the back of the television. This also leads Police back to your hotel if someone is stopped and has the TV in their back seat.
           
  4. Install an anti-theft alarm to each high risk flat panel televisions. These alarm boxes are typically glued with epoxy onto the back of the TVs. If someone removes the TV, a loud audible alarm is triggered and can run for hours on a small battery. The alarm can be deactivated by Management using a special key when there is a need to move or service the television. Many hotels have used this device and have had good luck with it. It is a reasonably priced anti-theft device for your high risk flat panel TVs.

 One such anti-theft alarm that many hotels use is Sonic Shock. It can be used to safeguard televisions, computers, laptops, LCD projectors, and other high-value theft prone equipment. Audible alarms are widely by colleges, universities, and businesses worldwide who wish to keep high-value electronic assts in the open and accessible without the worry of them “walking off”. Designed to emit an ear-piercing audible noise if the equipment is moved, the devices rob thieves of stealth and anonymity. They either have to spend time trying to deal with the alarm, take the alarm with them, or leave empty handed. It is sort of like the red-dye packets that bank insert into the bags of money they are forced to hand over to bank robbers, making it pretty easy to ascertain when a theft occurs. As always, please evaluate the product for yourself, as The Rooms Chronicle® and Petra does not guarantee this product, its use or reliability. Neither TRC nor Petra makes money from the sales or recommendation of this product.

(Todd Seiders, CLSD, is a regular contributing author for The Rooms Chronicle® and director of risk management for Petra Risk Solutions, which provides a full-range of risk management and insurance services for hospitality owners and operators. Their website is: www.petrarisksolutions.com. Todd can be reached at 800-466-8951 or via e-mail at: todds@petrarisksolutions.com.)  

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