Tag Archives: Claims

by | December 2, 2014 · 9:37 am

Hospitality Industry Insurance Update: “Think Your Workers’ Compensation Covers Everything? Think Again!”

Consider the risks involved when an employee travels overseas for work. Courts have often ruled that an injury or illness that an employee suffers while on short term assignment away from home—even if he or she is not working when it occurs—is work-related.workers comp But a basic workers’ compensation policy will probably not cover this type of claim. A foreign workers’ compensation policy will. Although no law requires employers to provide this coverage, you risk paying medical and lost-time costs out of pocket if you do not have coverage and a traveling employee becomes injured.

You might think your workers’ compensation covers all work-related injuries and illnesses. This could prove a costly mistake.

In most cases, workers’ compensation will cover work-related injuries and illnesses. But in certain special circumstances—which might apply to your company—the basic workers’ compensation policy will not provide coverage. This could leave your company on the hook for a costly workers’ compensation claim.

For more: http://bit.ly/1ycd3fF

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by | November 3, 2014 · 9:09 am

Hospitality Industry Legal Update: “California Ranks Highest For Workers’ Compensation Costs”

California employers are required by law to have workers’ comp insurance, even if they have only one employee.Workers Comp (NO LOGO) The California Department of Industrial Relations (DIR) imposes assessments on employers to cover the cost of potential workers comp claims. The amount a business pays into the system depends on how many employees a business has and what its total payroll is.

California has been ranked as the most expensive state for workers’ compensation costs, according to a newly released report.

The Workers’ Compensation Premium Rate Ranking Summary from Oregon’s Department of Consumer and Business Services shows that California businesses spend $3.48 for every $100 of payroll issued.

That’s 188 percent of the median cost of $1.85 for all 50 states. California was the third most expensive state in 2012 and the fifth most expensive in 2010.

“California’s workers’ compensation system is incredibly inefficient,” said Jerry Azevedo, a spokesman for the California-based Workers’ Compensation Action Network, which seeks to reduce costs for employers and improve services to injured workers. “It does not do a good job of achieving its goal. For as much as employers pay, they don’t get a lot out of it.”

For more: http://bit.ly/1pgVFZb

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by | April 16, 2014 · 9:06 am

Hospitality Industry Insurance Update: “Insurance Recovery for Business Interruption & Slowdown”

“…When claims arise, insurance companies will often look for ways to deny coverage or diminish their exposure to the loss. After charging you premiums based on the entirety of your business operations, these insurance companies should not be so quick to deny coverage to you on the grounds that Image you merely suffered a slowdown or partial interruption. If your insurance company is not fully cooperating, you should engage the services of an insurance recovery attorney who can assist you in getting the insurance company to honor its obligations under the policy…”

What happens when a hotel suffers property damage, whether by natural disaster or man-made accident, and is forced to close some or all of its rooms, amenities or services? It is important to understand how insurance can protect you from the resulting financial loss. In addition to potential recovery for property damage from your property/casualty policy, you may be able to recover lost revenue from your business interruption coverage. If your operations are disrupted, whether completely or partially, the language of your policy will determine if, and for how long, your insurance company will cover such loss.

For more: http://hlconverge.com/index.php/component/k2/item/825-insurance-recovery-for-business-interruption-slowdown

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by | March 25, 2012 · 9:43 am

Hospitality Industry Property Risks: Minnesota Hotel Kitchen "Oil Fryer Fire" Causes $100,000 In Damage

“The oil in the fryer reached its ignition temperature; the employees tried to extinguish the fire with a fire extinguisher, which was ineffective against the burning oil.”  

A fire in a Pannekoeken restaurant fryer at the Days Inn Hotel in downtown Rochester on Saturday morning caused an estimated $100,000 in damage.  Firefighters were called to the hotel, located at 6 First Ave. N.W., at 6:17 a.m., said Rochester Deputy Fire Chief Steve Belau. Employees had been opening the kitchen for the day, and had started the fryer when the mishap happened.
“After a time the fryer was noted to be boiling excessively (and) efforts by employees to shut down the fryer were unsuccessful,” Belau said.

The built-in fire extinguisher system slowed the fire, but was overcome when the fire became too large, Belau said. When firefighters arrived, there was smoke in the main floor and fire in the exhaust hood area of the kitchen. Fire was coming out of the exhaust vent on the outside.
Firefighters used two large portable fire extinguishers. At first, each time they knocked it down, it came back, Belau said. Also, it was unusually hot and smoky inside the kitchen. “Oil fires are very difficult to extinguish due to the unusually high temperatures associated with them,” he said.

For more:  http://www.postbulletin.com/news/stories/display.php?id=1491004

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by | February 4, 2012 · 6:49 am

Hospitality Industry Legal Risks: Appeals Court Allows "Facebook Photos" As Evidence In Denying Man's Claim For Additional Compensation In Workers' Compensation Claim

“…the appeals court agreed with previous rulings, which denied a request for additional treatment after diagnostic tests showed “no recurrent hernia and surgery to explore the scrotum” and saw no abuse by the courts in allowing the photos…In denying Clement’s request for additional compensation and treatment, the court ruled in favor of the use of Facebook photos as a evidence…”

An appeals court  has ruled that photos on Facebook and Myspace of a man “drinking and partying” can be used as evidence to deny him further workers compensation claims.

At the center of the suit is  Zackery Clement, who suffered a hernia  March 12, 2009 after a refrigerator fell on him while on the job at Johnson’s Warehouse Showroom in Pine Bluff,  Ark.  Clement, who was compensated for medical expenses and received temporary total-disability benefits for more than a year, was seeking an extension of benefits following three surgeries as a result of the injury.

An administrative law judge and the Arkansas Compensation Commission denied Clement’s application for additional benefits, and Clement, 27, was hoping the Arkansas Court of Appeals would reverse the ruling. He argued that he needed further medical treatment and disability payments because of “excruciating pain.”

For more:  http://abcnews.go.com/blogs/business/2012/02/court-okays-facebook-party-photos-in-workers-comp-claim/

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by | August 5, 2011 · 6:38 am

Hospitality Industry Information Security Risks: "Cyber Attack Claims" Increase 56% Mainly Through "Rogue Employees, Malicious Attacks, And Mistakes By Outsourcing Firms"

“…The vast quantities of personal, identifiable information collected by the leisure and hospitality industry have made the sector a chief target for cyber attacks, according to Willis…with reports of a 56% rise in cyber claims over the past year….”

“…Rogue employees, malicious attacks, and mistakes by outsourcing firms appear to be the main culprits, with hackers getting ever-more sophisticated in their attempts to drain corporate databases of customers’ personal details…”

Willis warns that some breaches can cost in excess of $100 million and with more stringent data protection legislation coming into force, companies’ financial exposure to this type of crime will increase further.

“Recent breakthroughs include the introduction of identity theft solutions and Payment Card Industry fines coverage, which helps to protect companies from penalties linked to the mismanagement of credit card data.”

For more:  http://www.insurancedaily.co.uk/2011/08/03/hospitality-and-leisure-attract-cyber-attacks/

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

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by | June 28, 2011 · 1:15 pm

Hospitality Industry Insurance Risks: "Employment Practices Liability Insurance" May Contain "Exclusions For Intentional Acts" That May Deny Coverage To Hotel Executives In "Disparated Treatment And Sexual Harassment" Cases

“…a panel of arbitrators found that (the executive)  “was well acquainted with the company’s policy on sexual harassment and other acts of inappropriate conduct.”  They further found that (the executive)  “did not comply with the policy on sexual harassment and that his refusal was willful.” 

“…attorneys should remind their clients to carefully review their existing EPLI policies and to understand all exclusions that may apply, as well as to be mindful of such exclusions when negotiating the purchase of a new EPLI policy…”

Exclusions typically found in EPLI policies include exclusions for Fair Labor Standards Act claims, National Labor Relations Board decisions, ERISA matters, costs of complying with accommodations mandated by the Americans with Disabilities Act, and claims arising out of facts or circumstances known to the employer before the effective date of the policy.  Another possible exclusion is for intentional acts.  This exclusion generally is intended to eliminate coverage if an employer acts with “wonton, willful, reckless, or intentional disregard for any laws.” This exclusion is a carryover from other policies traditionally offered, including commercial general liability policies and workers compensation policies.

The question that arises is whether an intentional acts exclusion precludes coverage for disparate treatment or sexual harassment claims.  By their very nature, disparate treatment and sexual harassment require some type of intentional conduct.  If the intentional acts exclusion is interpreted broadly enough, an allegation of disparate treatment or sexual harassment may provide the insurer grounds for denying coverage under the policy.

For more:  http://www.lexology.com/library/detail.aspx?g=54d3b2ac-48f1-497b-ac65-ee0e32826815

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by | October 18, 2010 · 9:38 am

Hospitality Industry Health And Safety: Use Of “Improved Safety Practices” And “Older Workers” Contribute To A Decrease In Workers Comp Claims

“Indemnity and medical severity for workers compensation claims continued to rise in 2009…

“…the frequency of workers comp claims dropped 4% in 2009 following a 3.4% decrease in 2008. A downward trend in claims frequency that started in 1991 likely will continue through this year, NCCI said…”

Factors such as increased use of robotics, improved safety practices and an aging workforce have contributed to the continuing frequency decrease, NCCI said.

Complex claims, such as those related to carpal tunnel syndrome and lower-back issues, declined more than average during the past five years, NCCI added.

Increasing claim costs, however, have partially offset the decline in frequency. Average indemnity costs increased about 4.5% in 2009 despite a decline in average weekly wages.

“It remains to be seen whether changes in average wage and indemnity cost per claim will begin to converge in 2010,” NCCI said in the research brief.

Average medical costs for workers comp claims rose 5% last year, the lowest increase in the past 15 years, NCCI said.

For more:  http://www.businessinsurance.com/article/20101018/NEWS/101019945

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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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