Tag Archives: Insurance

by | June 26, 2011 · 5:59 pm

Hospitality Industry Employee Risks: Hotel Management Should Use Employment Contracts Which Are "At Will", Do Not Discriminate And Define Scope Of Employment; Comprehensive Insurance Should Be In Place At All Times

Hotel Management and owners should set up uniform employment contracts, which:

  • Do not discriminate against people based on any of the protected classes as defined by federal or state law;
  • Define the scope of the employment;
  • Say if the employment is for a term or “at will”;
  • Assign the pre-corporate formation intellectual property to the company;
  • Assign all subsequently created intellectual property to the company; and
  • Protect the corporate intellectual property from disclosure.

The last two categories of protecting intellectual property of the company can be accomplished by drafting non-disclosure agreements, and Proprietary Invention Assignment Agreements.

Insurance – Getting insurance for your company is a bet worth taking, given the potential unpleasant surprises of not being prepared. Again, your needs will vary depending on your company, but among the standard offerings are:

  • Comprehensive General Liability Policies (“CGL”) – A CGL policy is usually geared towards protecting a company from personal injury;
  • Directors and Officers (“D&O”) Insurance – D&O insurance may cover the wrongful acts of the officers and directors of a company;
  • Advertising Injury Insurance – Insurance that covers defamation, invasion of privacy, copyright infringement and other intellectual property injuries. (The advertising injury is usually a part of a larger policy, like a CGL, and not a policy onto itself.); and
  • Employment Practices Liability Insurance (“EPLI”) – The EPLI is a specialized insurance policy protecting companies against employment lawsuits.

For more:  http://venturebeat.com/2011/06/27/4-legal-pitfalls-startup-owners-must-face/

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by | June 23, 2011 · 6:54 am

Hospitality Industry Employee Risks: Hotel Management Must Maintain "Employment Practices Liability Insurance" To Protect Against Expensive Litigation Defending "Frivolous" Employee Lawsuits; "Arbitration Agreements As Conditions Of Hiring" Also Helpful

“…based on the new case law, an employer that wins in court can’t even recover attorney fees for frivolous claims, if they overlap with other claims that are viewed as “non-frivolous.”

“…Employment Practices Liability Insurance (“EPLI”) can be purchased, but it often comes with a large deductible (up to $50,000 or more), so it is important to know what you are buying…”

“…Employers can also limit the impact of litigation by requiring new employees to sign arbitration agreements as a condition of being hired..”

That was the ruling last January in a federal court in California. The employer spent $315,000 in attorney fees, and prevailed on each of the ten claims in the lawsuit. The judge found that some of the claims were frivolous, and allocated $85,000 to the employer as reimbursement for the frivolous claims. The 9th Circuit (which also governs federal cases in Oregon) reversed on appeal because the employer didn’t prove that those fees were incurred solely in defense of the frivolous claims. This month, the U.S. Supreme Court made the same ruling in another civil rights case.

So what can employers do to minimize the risk of a devastating loss? Many employers are surprised to learn, after it’s too late to do anything about it, that general liability insurance does not cover discrimination claims. Employment Practices Liability Insurance (“EPLI”) can be purchased, but it often comes with a large deductible (up to $50,000 or more), so it is important to know what you are buying.

Employers can also limit the impact of litigation by requiring new employees to sign arbitration agreements as a condition of being hired. Under these agreements, both sides agree in advance that any employment-related claims will be resolved in arbitration rather than in court. Litigating before an arbitrator tends to be faster and less expensive than court trials. Currently, an Oregon statute requires an employer to tell an applicant about the arbitration agreement 14 days before hiring. A bill is making its way through the Oregon Legislature that would reduce this time period to 72 hours. These agreements need to be carefully drafted to be enforceable.

Read more: Protect against discrimination lawsuits – Oregon Business http://www.oregonbusiness.com/contributed-blogs/5451-changing-rules-for-discrimination-lawsuits#ixzz1Q6ve56Ao

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by | June 21, 2011 · 5:50 am

Hospitality Industry Information Security: "Cyberinsurance" Has Evolved Into A "Must-Have" Insurance Policy For Hotel Management As Coverage Includes "Forensics"

“…some insureds get charged $1,000 an hour by a forensics firm. It’s paying the individual walking by your house burning down with a bucket of water…” 

“…used to really focus our underwriting attention on how well they could prevent the breach, but we’ve added another phase to it,” says Whetstone. “Not only can you prevent it, but if it happens, how quickly can you respond? Do you have a plan in place? Kind of like a disaster recovery plan or a business continuity plan. It’s the same with this incident response plan.”

“…cyberinsurance is a “must-have” for most firms today…”

Demand for cyberinsurance was rising even before the most recent highly-publicized parade of breaches at major corporations and organizations. After the news of the first major Sony hack but before the subsequent reports involving Sony, Citicorp, the International Monetary Fund and others, Insurance Journal spoke with an expert to gauge how the insurance market for this coverage is doing.

James Whetstone, senior vice president and U.S. technology and privacy manager for insurer Hiscox Specialty, is a former technology geek and broker turned underwriter.

Hiscox is one of the original underwriters of the coverage. Whetstone says there are almost 30 carriers now offering cyber liability coverage, some more seriously than others. He says these times of claims are when an insurer’s commitment to a market can be tested, citing what he calls the “naive” capacity that exists.

The coverage has evolved quickly– Whetstone compares the product’s acceptance to that of employment practices liability (EPL) coverage– to where cyberinsurance is a “must-have” for most firms today.

The underwriting has also changed. “We used to really focus our underwriting attention on how well they could prevent the breach, but we’ve added another phase to it,” says Whetstone. “Not only can you prevent it, but if it happens, how quickly can you respond? Do you have a plan in place? Kind of like a disaster recovery plan or a business continuity plan. It’s the same with this incident response plan.”

For more:  http://www.insurancejournal.com/news/national/2011/06/20/203166.htm

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by | June 14, 2011 · 6:46 am

Hospitality Industry Health Risks: Hotel Owners Can Now Obtain "Bed Bug" Insurance Policies That Combine Insurance For Pest Control And "Lost Revenue"

“…In the past, the cost of treating bedbugs was seen as an unplanned expense that had to be paid out of pocket by the landlord…”

“…Treatment of bedbug problems and replacement of any property was excluded from property insurance policies. In recent months, some hotels have obtained loss of attraction coverage that covers losses if rooms have to be taken out of service because of bed-bug infestations…”

Aon Risk Solutions, the risk management arm of giant insurance broker Aon Corp., has teamed with Global Excess Partners, a Manhattan-based commercial property insurance company, and Terminix, the nation’s largest pest-control company, to offer the first-ever bedbug-specific insurance policy for hotels, landlords and corporations.

The new insurance plan, announced Monday, will not only cover the cost of bedbug termination, but also covers lost revenue during the time the creatures are still running riot before succumbing to pest eradication techniques that range from a new non-toxic treatment that can clean a room in five days or less, to mattress encasements.

In an effort to quell a chance of an outbreak, many companies have been hiring exterminators like M&M to conduct monthly preventive visits, which cost anywhere from $100 to several thousand dollars. Mr. Wong said his company recently conducted a $25,000 job that came as a result of bedbug infestation.

For more:  http://www.crainsnewyork.com/article/20110613/REAL_ESTATE/110619964

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by | June 5, 2011 · 9:50 am

Hospitality Industry Legal Risks: Amended "Americans With Disabilities Act" (ADA) Became Law On May 24 With Potential For "Increased Frequency Of Litigation Losses"; Management Must Improve Accomodation Efforts

“…under the amended act, an employee who suffers from depression may be able to function quite normally with the aid of medication but will still be considered to be disabled and will need to receive accommodation….”

“…the frequency of discrimination claims will likely increase — as will the frequency of litigation losses — but she says the severity of individual claims will likely not change all that much, with class actions in this field being a rarity…”

Existing employment-practices liability insurance policies shouldn’t have to be rewritten or modified, she says. “We would push back on any attempt to limit coverage just because the act has been expanded.”

Employers, however, should be integrating their disability-management programs to include non-occupationally injured and ill employees, and not just workers’ compensation cases, according to Pimentel.

“That is the big trend, and by the way, from an ADA-compliance standpoint, I recommend employers take a close look at doing that,” Pimentel says.

Employers should also be revisiting how much training they are doing among their supervisors on employee etiquette, language and comfort levels in communicating with disabled employees, he advises.

“Talking to them about their needs for accommodation is … an enforced requirement under the law,” Pimentel says.

For more:  http://www.hreonline.com/HRE/story.jsp?storyId=533338925

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by | May 6, 2011 · 6:15 am

Hospitality Industry Fire Risks: South Carolina Hotel Completes Major Renovations After "Dry-Storage Area" Fire Breaks Out In Restaurant

“…The Surfside Beach Resort has been undergoing major renovations to the 160-room building since October, when a fire broke out in a dry-storage area in the resort’s restaurant…”

“…The fire caused smoke and structural damage, prompting hotel management to move forward with not only restoration of the smoke-damaged areas, but an entire facelift of the building…structural repair and insurance issues were worked out before proceeding with the makeover…”

Renovations are kicking into full gear at one Surfside Beach hotel, in hopes of re-opening its doors to guests by mid-May. Joel Coker, general manager for the Surfside Beach Resort, said Thursday the bulk of renovations to the hotel only began 24 days ago. He says structural repair and insurance issues were worked out before proceeding with the makeover.

Rooms damaged by the October fire have been completely renovated, while undamaged rooms received upgrades. Improvements to the rooms include new beds and bedding, bathrooms, furniture and carpet.

Coker says he believes guests already have rooms booked starting May 17. “Bike Week is extremely busy now,” Coker mentioned. “Of course, it’s affected us with the decisions in Myrtle Beach a few years back. We could lose $100,000 easy that week – or more.”

The Surfside Beach Resort estimates it lost $1 million in guest revenue as a result of renovation efforts. The resort must undergo a handful of inspections – including building, fire and health – before it is allowed to re-open.

For more:  http://www.wmbfnews.com/story/14583174/hotel-damaged-by-october-eyes-may-re-opening

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by | March 6, 2011 · 3:24 pm

Hospitality Industry Employee Risks: Recession Causing More Laid-Off Workers To File "Wage-And-Hour" Claims Which Is Covered Under "Employment Practices Liability" Insurance

“…industry experts say they have seen an increase in wage-and-hour claims, which has led some insurers to stop writing such defense coverage, which most typically is provided for as a sublimit under employment practices liability insurance policies…”

Laid-off workers can, for example, allege that they were not paid for all hours worked, misclassified or not properly paid overtime, experts say.

As layoffs drive wage-and-hour claims, middle-market employers may find defense coverage more difficult to find and more costly when they do, particularly in California, insurers and brokers say. The market firming for wage-and-hour defense coverage comes after a rise in claims by laid-off workers who allege violations of the Fair Labor Standards Act and other laws, according to brokers and insurers.

“It’s a reflection of how difficult it is for employees to find another job,” said Christian Hamlin, a professional lines producer in the Los Angeles office of wholesaler Burns & Wilcox Ltd.

The U.S. unemployment rate remains high, but has improved from the decade’s peak unemployment rate of 10.1% in October 2009, according to the U.S. Department of Labor’s Bureau of Labor Statistics. In February, the U.S. unemployment rate was 8.9%, a 0.1% decline from January, according to BLS.

At the same time, Coverage remains available as some insurers continue to provide it, said Michael Mahoney, senior vp at Willis Insurance Services of California Inc. in San Francisco.

For more:  http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20110306/ISSUE01/303069982

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by | January 31, 2011 · 8:05 am

Food Industry Risks: New York Tortilla Factory Ordered To Shut Down After Employees' Death And Discovery That Owners Did Not Carry Workers' Compensation Insurance

The state Workers Compensation Board issued a stop-work order at the Williamsburg facility after learning the factory’s owner, Erasmo Ponce, was not offering workers’ compensation insurance to his employees.

A Brooklyn tortilla factory where a man was crushed when he fell into a dough mixer has been temporarily shuttered, state officials said Friday. Tortilleria Chinantla was not closed because of Juan Baten’s gruesome death, but his loss of life did lead investigators to the facility, officials said.

“The owner would need to get the insurance and pay fines before he is permitted to reopen,” said agency spokesman Brian Keegan.

The Occupational Safety and Health Administration and the state Department of Labor are investigating the deadly accident. Baten, 22, reached into the mixer early Monday and was sucked inside after his hand was snagged by one of its blades. The young father was killed instantly when a turbine broke his neck.

For more:  http://www.nydailynews.com/ny_local/brooklyn/2011/01/29/2011-01-29_feds_shutter_deadly_bklyn_tortilla_factory.html

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by | January 13, 2011 · 6:30 am

Hospitality Industry Risks: Hotel And Restaurant Owners And Management Must Have Emergency Plans And Insurance In Place To Manage Crisis

Hotel owners and management must be able to deal with catastrophic events and know the answers to the following:

  1. How quickly could you restart?
  2. Would insurance provide money for next week’s rent and wages?
  3. What would the bank say?

Massive floods are one thing, but what if a neighbouring building caught fire or your kitchen burst into flames? Start your managers and staff thinking through the issues, while they’re still in the headlines…

  • Check Data Backup Systems: are they all onsite or are copies of data, systems and staff records kept elsewhere? Is the safe fireproof or just a box with a key? Online backup systems like Carbonite work well, and data storage is very cheap – but you need to start it happening!
  • Is the Insurance cover complete? Would it cover a situation like the current floods? Does it cover intangible items as well as equipment? What about loss of profits and staff wages while rebuilding happens?
  • Are Staff trained for fire and first-aid emergencies? This is the type of training that’s usually regarded as ‘nice to have’ rather than essential. Do they know how to handle a fat or an electrical fire? What about an elderly customer who faints or collapses? Or flood waters coming near electrical connections?
  • How will you keep Customers & Staff informed? It’s more effective if your email newsletter or SMS alerts are already part of their world, then you can really keep their loyalty active. Your Facebook Page and Twitter updates will also reach many others…
  • Have a Crisis Management Plan, designed to cover the many risky situations where you depend on only one alternative: eg only one staff member who’s qualified with first aid, one chef who knows how to cook the favourite dessert, one key for the liquor store, or one computer with all the staff records.
  • Crisis Management Downloads: ready to use (and edit) Safety Manual and Rules, Maintenance Logbook, Cleaning Rosters (greasy dirt is a big cause of kitchen fires) and a raft of other systems designed to keep your business organised and safe.

For more:   http://www.hotelnewsresource.com/article51387.html

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by | November 10, 2010 · 8:34 pm

Hospitality Industry Business Risk Management: Hotel Owners Must Have “Business Interruption Insurance” In Place To Protect Property From Disasters And Unforeseen Events

A regular commercial property insurance policy covers only the physical damage to your business. What about the profits which could have been earned during this period? How to pay rent, employees’ salaries and other important payments while your business is being rebuilt? This would definitely result in substantial financial loss.

Business interruption insurance (also known as business income coverage) helps businesses in situations like this. Many businesses without the business income coverage, shut down their business operations after their business is completely shuttered due to some unforeseen event. It covers the loss of income and helps a business return to the financial position as it was in prior to the disaster.

Hence, a business in hospitality industry should understand the importance of business interruption insurance and should go for this insurance. Critical aspects of business interruption insurance Business owners from hospitality industry should be aware of some of the critical aspects of business interruption insurance. Here, we will take a look at some critical aspects of hotel business interruption coverage and understand why it is very useful for businesses in hospitality sector.

 Business interruption period:  The business interruption period is the length of period for which the benefits are payable under an insurance policy. This period is the most critical part of quantifying the business interruption loss. It covers a business from loss of income for a specified period till the damaged business property is repaired or reopened. Some hotels being aware of the losses that may persist even after repairs are done; opt for “extended period of indemnity”. As it may take some time for the hotel to regain bookings and rebuild market share.

Loss of rooms revenues:   The business in the hospitality or the lodging industry may suffer financial performance as two of its main functions, occupancy percentage and average daily rate (ADR) may get affected. In simpler terms, a hotel damaged by a hurricane or fire or stuck in a deep local recession will not be able to generate any revenues because of closed rooms, especially in hotels and lodges. Business interruption insurance compensates you for lost income due to loss of rooms. It covers the profits you would have earned, based on your financial records.

Other lost revenues: Revenues from food and beverage, conferences, golf, spa, etc., can constitute a significant portion of a hotel’s income. When a business is interrupted, not only revenues through rooms are affected, some or all of these sources of income are typically interrupted. The business interruption insurance covers all the profits that would have been earned.

Ordinary payroll: Even if the business activities are temporarily stalled, operating expenses, and other costs such as rent, electricity bill, taxes, interest payable on bank loans, payroll costs etc., cannot be ignored. The business still needs to retain some employees such as accountants, front office executives etc. The business owner needs to pay salaries to them. In this kind of situations business interruption insurance is very helpful as ordinary payroll coverage is a common endorsement in many policies.

Extra expenses:  Business interruption policies generally allow an insured hotel to claim extra expenses incurred during the period of indemnity. It reimburses for reasonable expenses that allow the business to continue operation while the property is being rebuilt. Some policies also cover the extra costs required for moving the business to a different (temporary) location.

Business interruption insurance is one of the most important insurance policies that help in minimizing the adverse consequences of some unwanted events for the businesses in the hospitality industry. A well-thought out risk strategy by hotel owners or operators can make a significant difference at the most crucial times.

For more:   http://www.infobarrel.com/Know_About_Business_Interruption_Insurance_in_Hospitality_Industry

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