Tag Archives: Risk Management

by | July 12, 2010 · 10:48 am

Hospitality Industry “Employee Theft” Risk Management: Hospitality Business Owners Must Amend Employment Manuals To Specifically Prohibit Employee Access To Company Records Once “Employment Ceases”

“…employers should amend their employment manuals to assert that any authorization granted to an employee to access the company’s networks, files or data automatically ceases when the employee has been terminated, tenders a resignation or forms an intent to leave the employer for any reason — irrespective of whether the employer has actually blocked the employee’s access…”

“…employers should make clear in their employment handbooks, manuals and employment agreements that any authorization to access company data is granted only in furtherance of the employer’s business purposes. They should state explicitly that any other access is unauthorized. Such language has been cited by courts in several cases where employer CFAA claims have been allowed…”

“…employers must remain vigilant to retrieve laptop computers from employees immediately after an employee gives notice. They should also immediately change passwords and close remote access upon learning of an employee’s intention to leave the company…”

According to “A Statistical Analysis of Trade Secret Litigation in Federal Courts,” that was recently published in the Gonzaga Law Reform, the number of trade secret cases has grown “exponentially” in recent years. “Most alleged misappropriators are someone the trade secret owner knows,” the authors write. “Specifically, in over 85 percent of cases, the alleged misappropriator was either an employee or business partner.”

Cases of employee-related data theft more than doubled between 2006 and 2008, according to a study conducted by accounting and consulting firm KPMG. Based on its findings, the firm concluded that the number of such incidents is “almost certain” to increase further, especially in a difficult economic environment.

For more:  http://www.hreonline.com/HRE/story.jsp?storyId=475264808

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by | June 9, 2010 · 8:13 am

Hotel Maintenance And Liability Risks: New Engineering Supervisor Details Problems At An Older Hotel Property In Northern California

 I started a job as a Engineering Supervisor at a  hotel in the Greater Sacramento area…..

  • The first thing, I noticed wrong, was my maintenance department people– were being drowned by other department duties, like Shuttling, Banquets, Shampooing the rooms, which takes hours at a time and is a Houseman job!
  • The second big thing, I noticed was Black Mold — harvesting, under the toilets in the rooms only to be thrown on the walls and ceiling by the exhaust fan distributing it. The third thing, I noticed was the ventilators on the roof not working, not even having any power in the wires? What the ventilators due, in a not working mode, is keep the rooms humid and acting like a fertilizer for Mold to grow!
  • The problems kept coming and I would keep finding them. I tried to order supplies for the control of the mold and for special tablets for the A/C unit’s pans to kill fungus and bacteria mold that would mutate in the pans. After cleaning some of the A/C units I realized that these units have not been cleaned in over twenty years! This particular situation caused an out break in the seventies called the Legion Air Disease — killing hundreds of people at one timeGoggle it!
  • The pool — was scheduled for it’s new drains so they would meet code. I believe my position was sacrificed to pay for those drains. That’s ok! As long as it is a safety thing and gets done? The rest of the pool’s equipment needs to be ripped out, its all old and bad! The deck needs to be resurfaced.
  • I had the corporate fix holes in the Stairwells and a couple of the Boilers but all five boilers need to be replaced. I got their programming computer system– working and computers for the front desk to work for them, while I was their.

For more:   http://www.stargazette.com/article/20100605/VIEWPOINTS03/6050360/Hello–my-friends-we-meet-again–Isn’-t-funny-how-time-can-turns-around–

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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 | March 31, 2010 · 6:03 am

Hospitality Industry Cybercrime: The 10 Riskiest Cities For Cybercrime Include Major Hotel Destinations Such As #1 Seattle, San Francisco And Boston

The 10 Riskiest Cities for Cyber-Crime identified in the The Norton Top 10 Riskiest Online Cities report make up a laundry list of the most famous places in the country.

The top 10 listed are:

  1. Seattle
  2. Boston
  3. Washington, D.C.
  4. San Francisco
  5. Raleigh, N.C.
  6. Atlanta
  7. Minneapolis
  8. Denver
  9. Austin, Texas
  10. Portland, Ore.

(From a GovTech.com article)   Other notable cities in the remaining 40 include Honolulu (11), Las Vegas (13), San Diego (14), New York (24), Los Angeles (30), Houston (32), Phoenix (34) and Chicago (35). Rankings were determined from Symantec data on cyber-crime, third-party data on online behavior and demographic data from Sperling.

These cities have been ranked based on the numbers of malicious attacks received; potential malware infections; spam zombies; bot-infected machines; and places that offer free Wi-Fi, per capita. They were also ranked based on the prevalence of Internet use; computer use, based on consumer expenditures for hardware and software; and risky online activity, like purchasing via the Internet, e-mail and accessing financial information.

Seattle ranked in the top 10 of all categories, which is how it wound up as No.1 riskiest city in the survey.

“When you look at the data, they are way ahead on all these measures, so you’ve got a concentration of heavy usage of technology engaging in the kinds of activities that we know increase your risk of being a victim of cyber-crime,” said Marian Merritt, Norton Internet Safety Advocate.

http://www.govtech.com/gt/articles/750409

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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 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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by | March 13, 2010 · 9:05 am

Hospitality Industry Safety: Hotel Management Must Insure That ALL Staff Are Prepared For And Knowledgable Of Fire Safety System

 

“Sleepless in Seattle”: A true fire alarm tale reveals lessons “From the Field”

This last weekend, I stayed at a full service hotel in downtown Seattle. When I checked in, I was delighted to receive a room on the very top floor of the hotel (the 20th floor), as I was excited about having a spectacular view of Seattle. It was my first time visiting Seattle, so I was looking forward to an “adventure”. Yes, I was about to have an “adventure”.

The adventure begins

After a great dinner, I went to bed. At 4am, my “adventure” started. The fire alarm siren went off like an atomic bomb exploding inside my guestroom. It was very LOUD and CLEAR. Now, I am an experienced hotel security and risk management professional, so what did I do? Exactly what everyone who has any experience with hotel fire alarms would do…I stayed comfortably in my warm bed. I suspected that someone got caught smoking in a hallway, or an employee burnt a piece of toast, setting off the alarm.

Then it came….a barely audible PA announcement. “This is hotel security, there’s a fire in the hotel, evacuate the hotel using the South stairwell!” The announcement was made only ONCE, and it was hard to hear and understand, BUT it was enough to get my warm butt up and evacuating. By the way, which way is South? There was no compass in my guestroom to point me in the right direction.

I exited my hotel room and immediately met up with eight women who had just exited their rooms, but did not know where to go, or where the South stairwell was. They were standing a mere ten feet away from the stairwell door. I knew exactly where the stairwell was, as I am a trained risk management professional, and always make a mental note of all emergency exits on my floor when I stay at any hotel. (Truth be told, I had to use the stairs earlier to get a soda from a machine on the floor below. But don’t tell my wife, she thinks I actually was pre-prepared for the fire and that impressed her.)

We all evacuated the hotel down the stairwell. Yes, I’m talking 20 flights of evacuation stairs. I didn’t think that view of Seattle was so “spectacular” now. I do have to say I loved every moment of it though, as I was participating in an actual hotel emergency, but WAS NOT responsible for it. As a risk manager for the hospitality industry, I spend a majority of my time training, planning and preparing hotels for these types of emergencies. I was now being “a fly on the wall” in an actual emergency in all its glory.

Lessons learned

With every experience, come lessons to learn from in order to seek improvement. Here are the lessons I learned:

  1. If you’re going to evacuate a hotel, make more than one announcement on the hotel-wide PA system. Guests who are startled at 4am need more than one announcement to clear their head and have them understand what you want them to do. At least three announcements should be made in succession. 
  2. Mark all emergency exit stairwell doors. They should be marked with a sign on the actual door of the stairwell, both at eye-level and at ground level. The Seattle hotel had the mandated illuminated “Exit” signs high above the doors, but it did not have a simple “emergency exit” sign or “stairs” sign on the door to the stairwell. The guests I met in the hallway were literally in front of the stairwell door, but did not recognize it as such, because there was no marking on the door itself. People do not look up during a crisis. The illuminated “exit” signs could be concealed if smoke was in the hallway. As smoke rises, it would cover signs that are posted higher than three feet from the ground. This is why all hotels should post room numbers and exit signs also on the bottom of the door face. Currently, only a handful of counties and municipalities require this as code. 
  3. Train hotel staff how to use the emergency fire panel. I learned from talking to other guests that floors 3, 4, 5, and 6, along with floors 18, 19 and 20 were the only floors evacuated. Floors 7 through 17 were not evacuated and received no fire alarm siren at all. I have to surmise that hotel personnel who were operating the fire panel did not completely understand how to operate the panel properly, because the actual fire was on the 5th floor. A decision to evacuate floors 18-20 but not 7-17 made no sense whatsoever. 
  4. As a side note, I was absolutely shocked at how many adults actually wear pajamas to bed. I would have never guessed that many.

 

In retrospect

After the entire incident, I was pleased to discover that all of the things us risk managers stress over and over again actually do have merit.

Educate your staff on how to operate your hotel’s fire life safety system. Make sure every management, night audit, engineering and security employee knows how to operate the fire panel and PA system. Train all employees about their respective response roles in the event of a fire alarm and/or hotel evacuation. This must be a carefully orchestrated procedure in order to minimize risks to guests and staff alike. And keep in mind, as never fails, most hotel fire alarms do occur during the overnight shift when no one is expecting them and there are the least number of staff to respond.

Review your hotel’s Emergency Response Plan, and make sure it has been updated. Ensure all personnel actually read and understand the emergency plan on a regular basis. A yearly fire drill with evacuation is recommended.

Post-script

The actual fire was a small grease fire that occurred on a stove in the restaurant’s kitchen. The kitchen was on the 5th floor of the hotel. While the hotel probably did not need to be evacuated at all, there was a large amount of smoke, so I’m sure the limited hotel staff on duty decided to be safe than sorry.

(Todd Seiders is 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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by | March 11, 2010 · 8:45 am

Hotel Industry Risk: Cybercrime Has Targeted Hotel Wireless Networks To Steal Credit Card Information

Travelers staying in hotels might want to carefully check their credit card statements for fraudulent charges in the months following the stay. According to recent reports, cybercriminals across the globe have a new favorite target: the wireless networks of hotels.

(From a CreditCardGuide.com article)  While financial services companies used to receive the bulk of hacker attacks, last year hotels emerged as the new choice target among hackers-out of 218 breaches in a total of 24 countries, 70 of those breaches took place through hotel networks, according to a report by security firm Trustwave SpiderLabs.

Internet security experts believe that hotel hacking attacks started to catch on at the end of 2008, when a sophisticated cybercrime organization broke into a hotel network to steal information and discovered just how easy it was to do. Even larger hotel chains are often poorly protected against cybercrime dangers, making it very easy for hackers to gain access to one computer and then use it as a doorway into the hotel’s central computer system, from where they can lift the credit card data of guests staying at the hotel along with other sensitive information.

Once hackers have retrieved the data they need, the cybercriminals waste no time turning the lifted credit card information into profit. Using high-tech equipment, hackers can easily clone credit cards, complete with a magnetic strip containing the stolen data. The cards are indistinguishable from the real thing and can be used in physical stores leaving behind few traces that can be used to track down the fraudsters.

It often takes hotels months before they notice the hack-last year, the average time between a security breach and discovery was over five months. In many cases, it is credit card companies, as opposed to the hotel chain, who first notice the unauthorized activity. Long after hackers make off with their bounty, credit card companies triangulating fraud reports discover that multiple individuals affected by fraud stayed at a specific hotel just prior to the credit card theft.

As awareness of hotel data breaches rises, many of the larger chains are stepping in to step up security. However, consumers should remain on alert: hacker’s aren’t about to give up this new lucrative target. Just this week, Wyndman Hotels, which operates chains including Days Inn, Ramada, and Howard Johnson reported its third breach in the past 12 months.

If you travel often or frequent hotels, make sure to monitor your credit card accounts. If strange activity shows up, contact your card issuer immediately. While credit card companies, ultimately, are on the hook for fraudulent charges, you do have to report unauthorized activity, and catching credit card fraud early can save much time and hassle down the road.

http://www.creditcardguide.com/creditcards/travel/staying-hotel-watch-credit-cards-231/

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by | March 10, 2010 · 5:23 am

Hotel Industry Cybercrime: Los Angeles Westin Bonaventure Hotel Disloses Credit Card Security Breach At Four Restaurants

According to Westin, its four restaurants – Lake View Bistro, Lobby Court Bar, Bonavista Lounge, L.A. Prime – along with its valet parking operation may have suffered a data security breach between April and December last year.

(From a InfoSecurity-us.com article)  In further proof that the hospitality industry is becoming a prime target for hackers, The Westin Bonaventure Hotel and Suites has admitted a likely data security breach.

According to a statement issued by Westin, compromised data may include names printed on customer credit or debit cards, card numbers, and expiration dates.

“Guests who used or visited the affected businesses during the eight month-period and who used a credit or debit card to pay their bills directly to the restaurants and valet parking might have had such information compromised and are encouraged to review their statements from that time period,” Westin said.

Although the company gave advice on how to place a full alert on a credit file, it did not offer any credit protection services for potential victims in the statement.

According to the 2010 Global Security Report from Trustwave, hospitality companies became the most breached sector in 2009, representing just over a third of all breaches. That said, the majority of these cases stemmed from a single site breach, the company said at the time.

However, hospitality breaches appear to be mounting. Wyndham Hotels and Resorts also suffered a security breach between late October last year and January. It is not clear whether the Wyndham hack was the single site breach reported by Trustwave, but the hospitality firm said that a hacker went through centralized network connections. “The hacker was then able to access and download information from several, but not all, of the WHR hotels and remove payment card information of a small percentage of our WHR customers,” Wyndham Hotels and Resorts said at the time.

Westin said that although customers of its restaurants and valet operation may have been compromised, the hacker did not gain access to customer card data stored in the system that stored credit card information for its hotel guests.

The Westin Bonaventure Hotel and Suites is independently owned by Today’s IV, Inc. and operated by Interstate Hotels & Resorts, Inc. under a license issued by Westin Hotel Management.

http://www.infosecurity-us.com/view/7881/westin-is-latest-hotel-to-be-hit-by-hackers/

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