Tag Archives: Liability Insurance

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 7, 2010 · 5:49 pm

Hospitality Industry Risk Management: Hotel Owner Must Review “Employment Practices Liability Insurance” Coverage Language To Determine If It Covers “Wage And Hour” Lawsuits

 In Professional Security Consultants, Inc. v. United States Fire Insurance Co., Case No. CV 10-04588 SJO (SSx), Judge James Otero recently denied an EPL insurer’s motion to dismiss a complaint seeking coverage for costs incurred to defend and settle an underlying wage and hour class action.    

The exclusionary language at issue was typical of such exclusions, barring coverage “for violations of the responsibilities, obligations or duties imposed by…the Fair Labor Standard Act…or similar provisions of any federal, state or local or foreign statutory or common law.”

The underlying litigation alleged that employer Professional Security Consultants (“PSC”) violated various provisions of the California Labor Code, including wrongfully withholding overtime compensation. PSC was insured under an EPL policy issued by United States Fire (“US Fire”). US Fire moved to dismiss the coverage action on the basis of its “FLSA” (Fair Labor Standards Act) Exclusion. Citing California law regarding the breadth and scope of an insurer’s duty to defend, the court denied US Fire’s motion.

The court noted that the policy’s definition of an “Employment Practices Wrongful Act” included “employment-related misrepresentations.” Comparing this policy language to the allegations of the complaint, the court emphasized the underlying plaintiffs’ allegation that PSC “[d]isseminated false information throughout [PSC’s] facilities and amongst [PSCs] employees, reciting that, under [PSC’s] labor policies and practices and under California law, the members of the Illegal Wages Class were not entitled to overtime compensation.” The complaint therefore alleged “employment-related misrepresentations,” triggering the potential for coverage under the policy.

The court also rejected US Fire’s argument that there was no potential indemnity coverage because any amounts allegedly owed to the underlying Plaintiffs were not covered “Loss” under the policy. The court observed that the policy’s definition of covered Loss included “damages,” and that the underlying complaint expressly sought to recover damages.

For more:  http://www.lexology.com/library/detail.aspx?g=75f1cf83-81de-43a4-8217-45ef67ed56ec

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by | September 10, 2010 · 2:15 pm

Hotel Industry Swimming Pool Liability Risks: Arizona Hotels Vary In Enforcing Existing Codes Regarding Drinking In Pools, Music Stages, Public Parties And Oversized Crowds

Many resort pool parties are already limited to guests who’ve rented rooms and their friends, like the ones at the Hotel Valley Ho, or to guests who’ve purchased tickets, like the ones at the Clarion Hotel Scottsdale.

  • No more drinking or eating in the pool.
  • No music stages abutting the pool.
  • No open-to-the-public parties, except ones already booked.
  • No free entry and oversized crowds.

“In the last two years the scale and grandeur of the parties has picked up, and we are just trying to help the facilities understand the public-health impact before we start focusing on enforcement,” said John Kolman, director of the Maricopa County Environmental Services Department.

Kolman said inspectors have reminded managers to monitor pool capacity, to double-check that rescue equipment is always visible, to keep lounge chairs, stages and other structures 4 feet from pool edges, and most crucially, to stop inviting the public to their events.

Inspectors will continue to make unannounced checks through September, the traditional end of the pool-party season.

But at the W Scottsdale, general manager Leon Young said he’s seen real revenue losses since he started enforcement. He has, however, seen room sales go up slightly.

His hotel has made a name for itself hosting buzzy daytime bashes and nighttime swim parties, serving pool-friendly drinks such as frozen creamsicle cocktails or bottles of vodka with Gatorade on ice. Now, the second-floor pool will be pen only to those who rent cabanas, daybeds or rooms.

“Certainly, I can understand you don’t want to be floating next to a piece of lunch meat,” Young said. “But if we follow the rules about no glass near the pool, I don’t see why we couldn’t allow some drinks in the pool.”

Young is optimistic the county will be open to revisiting the regulations to create variances that would allow resorts and hotels to pursue party profits.

“We are rooms-focused in spring and peak season, but in summertime, it really is about the events and promotions you can organize to bring people in,” Young said.

Read more: http://www.azcentral.com/thingstodo/bars/articles/2010/08/27/20100827phoenix-hotel-pool-party-scene-drinking-banned.html#ixzz0zAPbsor7

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by | September 3, 2010 · 7:11 am

Hotel Industry Liability Risks: Florida Hotel Owners Sued By Victim Of Hit-And-Run Car Accident In Parking Area During A Sponsored Golf Event

The lawsuit claims that the tournament operators and sponsor, along with the property owners and manager, had inadequate lighting in the parking area where the crash occurred, failed to follow industry standards in designing and building the parking area, failed to use proper traffic control devices, designed the parking area in a confusing fashion, and didn’t properly staff the parking area.

The attorney representing Jack Justice, one of three people run down by a sport utility vehicle in the parking lot of the ACE Group Classic golf tournament in February, has filed a lawsuit against the owners of the property where the crash occurred, the tournament operators — including the PGA Tour — as well as the owner of the SUV and his company.

The 37-page lawsuit was filed by Mark S. Weinstein on Aug. 27 in Lee County Court.

“Mr. Justice almost died,” Weinstein said. “He’s lucky to be alive.”

“His injuries were completely avoidable,” Weinstein added. “When a corporation sponsors a golf event; when a corporation runs a golf event; when a corporation is paid to plan a nationally televised golf event where the purpose is to invite the public onto your premises and in the end make money … you can’t just have a parking lot area and just say ‘Everyone park here. Good luck.’”

For more: http://www.naplesnews.com/news/2010/sep/01/victim-ace-group-golf-cart-crash-files-lawsuit-all/

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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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by | June 7, 2010 · 7:14 am

Hospitality Industry Bodily Injury Liability: New Florida Law Will Help Limit “Slip And Fall” Cases And Forced Settlements

“…Maria Coppola says she slipped on pebbles and sand on the Naples Beach Hotel & Golf Club step..”

“…lawsuits, filed in the past six months in Collier Circuit Court, likely will result in settlements. That’s because defendants want to avoid costs of expensive litigation…”

In April, Gov. Charlie Crist signed House Bill 689, which requires that an injured person must prove a business, municipality or other defendant actually knew about a dangerous condition and should have done something to fix it _ or that the condition occurred often enough that the business should have expected it. These are legal standards known as actual notice, or constructive notice.

“This represents a significant shift and a major victory for business owners and their insurers in slip-and-fall cases,” said Kirkland Miller, an Ave Maria School of Law professor who specializes in premises liability. “More importantly, it could mean a reduction in the number of slip-and-fall cases being filed in Florida …”

For more:   http://www.naplesnews.com/news/2010/jun/06/south-florida-called-no-1-hellhole-slip-fall-lawsu/

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by | June 5, 2010 · 10:15 am

Hotel Industry Personal Property Liability: Hotel Owners Are Strictly Liable For Guest’s Property Subject To State’s Innkeeper Statutes

Hotel owners and managers must remember that under the common law, most jurisdictions and subject to certain limited exceptions, they are strictly liable for loss or damage to a guest’s property, unless that liability has been limited by statute.

Innkeeper statues are a product of local rather than federal law. Each state (and the District of Columbia) is free to enact its own innkeeper statute. For this reason, the first thing the innkeeper must do is check the law in each state in which a hotel is located and clearly understand what that law requires.

In this case (Paraskevaides v. Four Seasons Washington), a hotel guest just happened to be traveling with, and decided to place in her in-room safe, jewelry valued at approximately $1.2 million. When someone removed the jewelry from the in-room safe after entering both the hotel room and the safe without force, the guests sued the hotel. One of the defenses the hotel asserted was based upon the Innkeeper Statute applicable in the District of Columbia.

Although the trial court allowed the defense, the appeals court determined that the hotel was not entitled to the statute’s protection because the hotel had failed to comply with the statute’s requirements. The appeals court then sent the case back to the trial court for a determination of the hotel’s liability under the common law. Noting that neither party had addressed that issue on appeal, the appeals court remained silent as to the applicable common law standards. Accordingly, after several years of litigation, the parties are back to square one and the extent of the hotel’s liability remains wide open.

If an innkeeper fully complies with applicable innkeeper statues, the benefits can be significant. Under the District of Columbia Innkeeper Statute, for example, compliance allows innkeepers to avoid all liability for the loss, theft or destruction of property not deposited in the hotel’s safety deposit boxes unless it is “usual, common or prudent” for a guest to retain such property in his or her room. Moreover, compliance with the statute limits an innkeeper’s liability for the loss, theft or destruction of property deposited in the safety deposit boxes to the lesser of $1,000 or the fair value of the property. In order to reap the benefits of these statutes and limit a guest’s common law rights, a hotel must be precise in its compliance.

The District of Columbia’s version of the innkeeper statute required, among other things, that hotels display either a printed copy of the innkeeper statute or a summary of the law in both the guest rooms and in the public rooms of the hotel. The appeals court in this case concluded that the hotel did not display a copy or summary of the statute in its public rooms, and, therefore, could not rely on the statute to limit its liability.

For more:    http://www.hotelinteractive.com/article.aspx?articleID=1605

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by | June 2, 2010 · 7:19 am

Hotel Industry Risk Management: Hotel Owners Must Establish Effective Internal Or Outsourced Risk Reduction Programs To Keep Corporate Insurance Premiums Down And Avoid Legal Violations And Penalties

Little attention is given to the security department as a member of an overall cost-reducing risk-management program. Risk reduction saves money now and in the immediate future and is easily quantifiable

A poorly organized or implemented hotel security program has a direct negative impact on corporate profits. Many organizations are suffering chronically low revenue per available room, resulting in companywide cost-cutting initiatives.

Risk-management considerations are fairly universal and reasonably simple in the hotel industry. Some variations exist, often based on your region and the type of facility you are managing. Some factors to consider that help create an effective program include:

  • defining segments of your operation that cause frequent insurance claims resulting in higher corporate insurance premiums;
  • determining the elements that will tarnish your brand; and
  • assessing what policies and procedural failures or system deficiencies are violations of law, which can lead to crushing civil and criminal penalties.

For more:   http://www.hotelnewsnow.com/Articles.aspx?ArticleId=3377&ArticleType=35&PageType=News

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by | May 29, 2010 · 5:34 am

Hospitality Industry Liability Insurance: Hotels And Restaurants That Provide Valet Service Must Have Liability Insurance And Garage Keepers Legal Liability Coverage

Liability insurance and garage keepers legal liability insurance are two specifically different coverage’s.

In the news recently, a man used a valet on a lunch date with his wife. A man, pretending to be the valet, used his claim ticket to steal his wife’s brand new BMW...

Liability insurance provides protection for the parking company for their negligence should they injury or damage someone or someone else’s property (i.e. Bodily Injury and Property Damage Coverage).

This would be to a third party. Garage keepers legal liability insurance provides protection for the parking company for their negligence should they damage the customers vehicle in which they have taken into their care, custody and control.

For more:  http://www.valetpark.net/ins.html

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