Risk Management in the Hospitality Industry. Tips to help your hospitality-based business to run smoothly.

By: Advocate Brokerage

While every business owner faces a certain number of risks, the hospitality industry seems to face a fairly large amount. The key to keeping your hospitality-based business running smoothly is taking some initiative to managing these risks. At Advocate Brokerage, we specialize in assisting business owners in the hospitality industry and have put together this blog that outlines some of the major risks and offer some tips on how to limit your exposure.

The Possibility Of Fire Presents A Significant Property Risk

Businesses in the hospitality industry face a large level of property risk. There are multiple ignition sources in hotels and restaurants. Not to mention the fact that much of the contents are highly combustible. To reduce this risk, ensure that all smoke and fire alarm systems are functioning and meet National Fire Prevention Association (NFPA) requirements.
Advocate Tip
Be sure your coverage includes a replacement cost valuation and make sure the coverage limits are regularly reviewed for adequacy. If your building and contents are damaged, a policy that is lacking adequate coverage faces a catastrophic loss. With enough coverage and replacement cost valuation, you should be able to rebuild and replace the building and contents.

Slips, Trips And Falls Increase On Premises Injury Risk

The risk of injury on premises is very high in the hospitality industry. Due to the high number of guests that go through your doors each day, it is essential to minimize this exposure by taking certain precautions.
Advocate Tips
It is essential to implement safety codes in hazardous areas such as stairways, elevators, railings, and floor coverings.
Make sure that all exits are clearly marked.
Be sure to have back up lighting systems in place in the event of power outages.

Serving Liquor Increases The Risk Of Liability

Many businesses within the hospitality industry sell alcohol. You could be held liable if someone becomes overly intoxicated and gets into an altercation or is involved in car accident while behind the wheel upon leaving your establishment.
Advocate Tip
Employees who are serving alcohol should be trained to know when a customer has consumed too much and know what to do to prevent excessive drinking.
If you sell or service alcohol, Liquor Liability coverage should be part of your insurance portfolio.

When You Provide Valet or Shuttle Service, Liability Risks Are Also High

If your hotel or restaurant has a valet service, you increase your exposure to automotive liability. The risk becomes even higher if you offer transportation services to and from airports or other venues.
Advocate Tips
To lower the risk of Automotive Liability, restrict driving to qualified employees.
If you are hiring for a position that includes these types of responsibilities, be sure to review their Motor Vehicle Records as part of the interview process.
When outsourcing automotive services, be sure to transfer the risk to the independent contractor providing the services for you in a written contract.

The Use Of Credit Cards Means You Must Take Care To Provide Data Privacy

With most consumers using credit cards to pay for hospitality related products or services, the risk of exposure is very high. Whether it is a customer paying with a credit card, maintaining a database that includes personal information for a loyalty club, or booking a reservation with a credit card number, there are many opportunities for a data breach to occur.
Advocate Tips
Lower your risk by staying on top of security protocols and updating your systems frequently.
Be consistent with employee training so they are aware of current scams and can help detect fraudulent credit card use.
Talk to us about Cyber Liability or Data Breach coverage.

Take A Proactive Approach To The Threat Of Legionella Disease

Occurring naturally in the environment, legionella can sometimes be found in portable water systems. It can also enter a plumbing system during construction or repair. Additionally, any mist that is produced by legionella-contaminated water or ice can be aspirated into the lungs by susceptible individuals. In the hospitality industry, shower heads, decorative fountains, spas, faucet aerators and cooling towers all become a source for potential exposure.
Advocate Tip
Consult with indoor air quality professionals to develop best practices and procedures that help to control the presence of Legionella and protect the health of your guests.
Advocate Brokerage has extensive experience and knowledge of the hospitality industry and thus understand the type of risks unique to hotels and other hospitality-related businesses. We would love the opportunity to review your current coverage and find out if there are potential gaps in the coverage you already have in place. If you would like a review of your insurance or if you have any about your current coverage, please don’t hesitate to give us a call. Glenn Binday, Principal of Commercial Insurance would be happy to speak with you. He can be reached at 914-713-8112.
Report a Claim Make a Payment Get a Quote About Advocate Personal Insurance Business Insurance Client Resources Contact Us