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Tag Archives: Insurance
“Hospitality Lawyer” January-February 2013 Online Issue Features “Insurance Coverage For Food Service Industry Losses And Business Interruption”
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Filed under Business Interruption Insurance, Insurance, Labor Issues, Liability, Magazines, Management And Ownership, Risk Management
Hospitality Industry Insurance Risks: California Restaurant Owners Charged With “Felony Worker’s Compensation Fraud” For Failing To Insure Twelve Employees; Fines Totalling $18,000
“…an anonymous complaint (alleged) that the restaurant did not have workers’ comp insurance as required by law…following a visit to the restaurant, a civil citation (was issued) with penalties totaling $18,000 for failing 
to insure their 12 employees…businesses not carrying valid workers’ compensation coverage are considered uninsured and face a “Stop Notice and Penalty Assessment†from the Labor Commissioner and fines of $1,500 per employee, up to $100,000. If an injury occurs, the fine increases to $10,000 per employee. A worker injured while working for an uninsured employer can sue for damages and the employer is presumed negligent in such cases…”
The owners of a restaurant in San Marcos, Calif. have been charged with felony counts of workers’ compensation fraud and forgery following a referral by the California Labor Commissioner Julie A. Su’s criminal investigation unit to the San Diego District Attorney’s Office.
The district attorney’s charges, filed in San Diego Superior Court on Jan. 29, allege that Rhythm City Grill owners John Fletcher Johnson and Annette Lucille Thomas each committed two felony counts of forgery of a workers comp insurance policy and a misdemeanor charge of conducting business without workers’ compe insurance. Johnson was also charged with an additional felony for submitting a false document to a government agency. He and Thomas were arraigned Feb. 14.
If convicted, Johnson and Thomas face up to 16 years in prison for the felony charges. The failure to secure workers’ comp insurance carries a misdemeanor charge of 1 year and a fine.
For more: http://www.insurancejournal.com/news/west/2013/02/19/281769.htm
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Filed under Crime, Injuries, Insurance, Labor Issues, Liability, Management And Ownership, Risk Management
Hospitality Industry Property Risks: New York Hotel And Restaurant Suffers “Significant Water Damage” After Frozen Pipe Bursts; $200,000 Damage From Third Floor To Basement
“…A water pipe had frozen and burst early Wednesday morning…the pipe was connected to the facility’s sprinkler system and the malfunction triggered a response from the Geneseo Fire Department…The pipe burst 
on the third floor, pouring water into a guest room and working its way down to the basement. There was “significant damage†in several parts of the building including two parlors, dining rooms and guest rooms and spaces above and below the rooms…”
The Big Tree Inn, 46 Main St., remains closed after a water pipe burst on Wednesday, flooding several areas of the landmark building and causing significant damage from the third floor to the basement. Big Tree Inn will remain closed through Friday, but Scott is hopeful that at least part of the facility will be able to open some time during the weekend.
Scott estimated repairing the damage will cost $200,000 or more. The restaurant does have insurance.
Facility managers were alerted to a problem by a guest who reported hearing what was believed to be a small leak. An investigation revealed the bigger problem.
For more:Â http://thelcn.com/2013/01/24/burst-water-pipe-causes-significant-damage-at-big-tree-inn/
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Filed under Claims, Insurance, Liability, Maintenance, Management And Ownership, Risk Management
Hospitality Industry Workers' Compensation Insurance Risks: Tennessee Supreme Court Awards Restaurant Manager Benefits At "Six Times His Medical Impairment" From Electrocution Injuries
“…The Tennessee Supreme Court held that a manager was entitled to benefits at the statutory maximum of six times his medical impairment…the manager was denied a meaningful return to work when he was terminated in retaliation for filing his claim. The 
manager’s age, education, training, work experience, and limitations warranted the six-times multiplier…”
A co-manager for a fast food restaurant was repairing a heating element used to keep food warm. Someone plugged the heating element into an electrical outlet. An electrical shock caused the manager to lose consciousness. He suffered from burns on his hands, chest pains, headaches, and memory loss. He repeatedly asked his supervisor to pay his medical expenses and authorize medical care for his symptoms. The district manager said he would “take care of it,” but the bills remained unpaid. The manager filed a workers’ compensation claim, and the restaurant was fined for failing to timely report the incident. Days after the claim was filed, his supervisor “vulgarly expressed his anger” about the claim. Within weeks, the manager, who had never received a reprimand, received two reprimands and was later terminated.
A neurologist diagnosed the manager with a migraine condition and epilepsy and opined that the conditions were caused by the electrical shock. The neurologist found that he reached maximum medical improvement with a 10 percent impairment to the body as a whole. A vocational expert opined that the manager suffered a 65 percent vocational disability based on his age, limitations, work history, and the local labor market. The manager was unable to find gainful employment other than occasional “odd jobs.” The Tennessee Supreme Court held that he was entitled to benefits at the statutory maximum of six times his medical impairment.
The court rejected the restaurant’s argument that the maximum multiplier possible was meant to punish it for mishandling the claim rather than an assessment of disability.
For more:Â http://www.riskandinsurance.com/story.jsp?storyId=533352818
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Filed under Claims, Injuries, Insurance, Labor Issues, Liability, Management And Ownership, Risk Management
Hospitality Industry Property Risks: Superstorm Sandy Increases Interest In Commercial Flood Insurance; 40% Of Small Businesses Never Reopen After Water Damage From Disasters
Under the NFIP, non-residential businesses can purchase up to $500,000 in building and $500,000 in content coverage, while residential businesses can purchase up to $250,000 in building and $100,000 in content 
coverage. Marsh’s Flood Service Center can place up to $30 million in excess of NFIP flood insurance, including business interruption, with A-rated insurance capacity.
According to NFIP, almost 40 percent of small businesses never reopen following a disaster because of water damage. Over the past five years, the average commercial flood claim has been about $75,000.
Interest among businesses in purchasing flood insurance coverage from the National Flood Insurance Program (NFIP) is increasing in the wake of Superstorm Sandy’s heavy rain, record storm surge, and resulting widespread flood damage, according to insurance broker Marsh.
Although most companies purchase commercial flood insurance through the private market, more are now inquiring about purchasing additional coverage through the NFIP. When used in tandem, NFIP coverage can mitigate or “buy down†large deductibles associated with commercial flood policies or simply provide additional coverage.
For more:Â http://www.claimsjournal.com/news/national/2012/11/18/217658.htm
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Filed under Flood Insurance, Insurance, Liability, Maintenance, Management And Ownership, Risk Management
Hospitality Industry Property Risks: Indiana Restaurant Suffers "Severe Structural Damage" As Car Crashes Into Dining Room; Customer Hospitalized In Serious Condition
“…the building suffered severe structural damage…the Indianapolis Fire Department’s Structural Collapse Rescue Team was called in to secure the building and prevent it from further collapse…the female customer 
was taken to (the hospital) in serious condition…”
Wayne Township Fire crews responded to an accident near West Washington Street and Lynhurst Saturday after an SUV crashed into the dining room of a restaurant – pinning a customer between the car and the counter.
A passenger inside the SUV said she and her daughter-in-law, who was driving, were headed east on Washington when a van pulled out in front of them. She said her daughter-in-law swerved to avoid it, but lost control and crashed into the building.
Mariah Taylor was working at a fast food restaurant next door when she heard the crash, ran over to help along with a co-worker, and saw the woman who was pinned.
The passenger in the SUV suffered only a scratch. She said her daughter-in-law was able to get out of the vehicle on her own.
Wayne Township Fire officials said they haven’t been able to confirm the number of employees in the business at the time of the accident. There were no other injuries reported.
For more:Â http://www.wishtv.com/dpp/news/local/marion_county/suv-crashes-into-restaurant
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Filed under Claims, Guest Issues, Injuries, Insurance, Management And Ownership
Hospitality Industry Property Risks: New York Restaurant "Broiler" Fire Spreads Through Walls Into Third Floor Attic
“…the building did sustain serious damage but it won’t be a total loss. The restaurant will remain closed while the repairs are underway, but the hotel next door will remain open…”
Several customers and employees were inside Fred’s Inn Sunday afternoon as a fire broke out inside the broiler. But for a short time, no one knew. “It was really only a few minutes probably by the time they discovered it, but it had gone up through a wall into an attic,” said A. Wesley Jones, the Public Information Officer for the Norwich Fire Department.
Staff immediately cleared the restaurant. No one was injured. Meanwhile the flames were quickly spreading through the historic building, built in 1933.
“There’s a full attic in there, a third floor of the structure, the fire had kinda gotten up into there, there’s also a couple additions onto the structure, which made it difficult to fight,” said Jones.
That’s why it took nearly an hour and a half to get the flames under control. The restaurant is an local landmark. As news of the fire spread, customers began gathering at the scene, like Bill Strong.
“I’m a life long resident of the area, it’s always been a staple of the area, and we were just here recently and we were very impressed with the service and the food…and we had to come check it out,” said Strong.
Now firefighters say this could have been a lot worse. “An evening, even this evening this place would have been packed with dozens if not a couple hundred people in here dining and it certainly could’ve caused a problem,” said Jones.
For more:Â http://centralny.ynn.com/content/top_stories/604375/fire-damages-historic-chenango-county-restaurant/
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Filed under Fire, Insurance, Management And Ownership, Risk Management
Hospitality Industry Property Risks: Texas Restaurant Rebuilds After Electrical Fire Causes More Than $40,000 In Damage; Insurance Policy Covers Employee Payroll
“…a fire struck the backside of the building. It is still undetermined as to what exactly caused the one-alarm fire, which left approximately $40,000 in electrical damage…thanks to the preservation of its original pits and an 
insurance policy that has kept their employees on the payroll since the incident… it will feel as if Hutchins BBQ never closed…”
At first, a hopeful Tim believed the restaurant would be up and running in a couple of weeks. But with more planning and red tape to navigate than originally expected, he and his father, Roy, recovering a business from fire entailed much more than he anticipated.
The fire originated in the rear of the building and destroyed its back wall and pit room, which housed two wood-burning rotisserie pits, a trademark of the family namesake.
“It was devastating,,” Roy said. “We’ve put in 14 restaurants since 1975, and this is the first fire we’ve ever had.”
With the damages being more expensive than he originally thought, Tim believes the worst is behind them, and said he and his father are resting easier now that they can see the progress taking shape.
“A lot of times with a lot of restaurants, this could put you under,” Tim said. “Thankfully, this is something I’ve been able to do.”
The restaurant, which has been at that location since 1991, will look very similar to way it was before the fire, except for a completely new pit room constructed of steel and cement, no wood, Roy said.
For more:Â http://www.scntx.com/articles/2012/09/19/mckinney_courier-gazette/news/8971.txt
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Filed under Business Interruption Insurance, Claims, Fire, Insurance, Labor Issues, Management And Ownership, Risk Management
Hospitality Industry Property Risks: Washington Restaurant Fire Caused By "Combustible Items Near Water Heater"; Over $1,000,000 In Damage
 “…the fire was most likely caused by combustible items being stored too close to the water heater…resulting in over $1,000,000 in damage…”
Investigators believe a fire at a Lynnwood restaurant this week started near a water heater, officials said Friday.
The fire broke out about 2 p.m. Wednesday at The Local Yolk at 4025 196th Street SW.
Diners and staffers got out safely, but the fire caused up to $1 million in damage, according to the Lynnwood Fire Department.
Investigators were unable to pinpoint what exactly started the fire. Most likely, it was caused by combustible items being stored too close to the water heater.
For more:Â http://heraldnet.com/article/20120831/NEWS01/708319851/-1/NEWS01
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Filed under Claims, Fire, Insurance, Maintenance, Management And Ownership
Hospitality Industry Legal Risks: Hotel And Restaurant Owners Should Maintain "Employment Practices Liability Insurance" And Institute Complaint Procedures To Reduce Employee Lawsuits
 “…these suits catch employers by surprise since, even if they terminate an employee for a business reason, every 
separated employee can claim discrimination on the basis of a protected class such as race, gender or sexual orientation…”
Employers who can afford it purchase Employment Practices Liability Insurance (EPLI) to protect their businesses.
In the last three to four years, HR lawsuits have been on the rise, and unfortunately, there does not seem to be any end in sight. The U.S. Department of Labor reports the number of lawsuits related to the Fair Labor Standards Act, alone, increased 35 percent in three years. And this is only one small area that an employer can be sued. The following steps can be taken to minimize lawsuits:
- Your employee handbook must contain broad and multi-tiered complaint procedures so employees have sufficient recourse when they feel victimized by harassing or discriminating behavior.
- Provide annual employment law training to all of your supervisors and require them to sign acknowledgments.
- Educate your employees at the time of hire – during orientation, for instance – about the avenues open to them should they have a problem and need to complain.
- Most critically, take prompt remedial action when someone complains. In other words, do something about it within 48 hours or less of receiving the complaint. It is best to seek legal advice when such a complaint occurs.
For more:Â http://www.floridatrend.com/article/14575/more-employees-are-suing-employers
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Filed under Claims, Insurance, Labor Issues, Liability, Maintenance, Risk Management
