Hotel & Motel Management - February 4, 2008 - (Page 40)

40 Hotel Operations INSURANCE H&MM February 4, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition BY CHRISTINE BLANK, CONTRIBUTING EDITOR Learn to take advantage of lower insurance rates NATIONAL REPORT—Hotel a variety of lines of owners are facing coverage, from 10 a great year for [percent] to 15 percent, insurance. Because no up to 35 percent,” major natural disasters said Bruce Zaccanti, or terrorism acts have principal and national occurred in the past practice director for few years, insurance Ernst & Young in rates are dropping and Chicago. “If you are Brandt the market is more proactive and identify, ARTHUR J. GALLAGHER competitive. mitigate and reduce Now is the best time risk exposures, you for owners and managers to rehave now earned the right to evaluate their policy coverage ask for preferential pricing and and rates, according to treatment.” insurance experts. At the same Others agree that hotels time, this is the best time to should constantly review their cut down risks and liabilities in policies and even shop for the order to qualify for better rates. best insurance brokers to get “There are decreases on the best rates. “If you don’t ask, you don’t get. Unless a hotel owner or operator has an insurance broker who is not responsive, they will realize a savings,” said Wes Brandt, area v.p. for Arthur J. Gallagher Risk Management Services in Houston. Excluding hotel companies that had major property losses because of ﬁres and hurricanes, most hotels should realize at least a 15-percent drop in insurance rates in 2008. Even hotels that sustained damage from tropical storms and hurricanes likely will see insurance rates drop this year, according to Brandt. “Even though hotel owners and operators in Florida had hundreds of millions of dollars in losses, they can anticipate the same reductions or more this year because it is a highly competitive market,” Brandt said. “There is a lot of supply.” In addition to ensuring that they have the best rates, owners and operators can use the competitive market to get better policy coverage, insurance experts said. “During the tougher insurance market of 2005 through 2007, the insurance industry took away a number of key coverage components,” Brandt said. “Now, because we’re in a competitive market, we start a clawback process to get those incredibly important wordings back.” Hotels can get higher limits on their coverage or better types of coverage. For example, Brandt said, property insurance Primary and excess liability rate changes since 2004 0 -0.05 -0.1 -0.15 -0.2 -0.25 -0.3 -0.35 -0.4 -0.45 -0.5 2004 (10-15%) (10-15%) (15-20%) (10-15%) 2005 2006 2007 2008 Source: Arthur J. Gallagher Risk Management Services Tips for reducing risk Hotels can save money on their liability insurances and workers’ compensation insurance by following these simple tips: Proper hiring: Conduct more extensive background checks and require green cards and other identiﬁcation to prevent liabilities down the road. Walk the grounds daily. Make sure there is nothing that can injure guests and employees. Know where subcontractors, including landscape and maintenance professionals, are working on the property and where they are storing their equipment. Give employees incentives for following safety rules. Employees who work a certain amount of time without injury can accrue points toward an American Express gift check, for example. Theft coverage: Make sure you have proper coverage for guests’ common technology items, including laptop computers and BlackBerrys. Document every event. For example, document every detail of a guest reporting that he or she stubbed his or her toe but doesn’t need medical treatment. When that event is not documented, it’s easier for the guest to later claim that he or she suffered injuries. Source: Bruce Zaccanti, Ernst & Young deductibles for Florida hotels betterments to the building and jumped to around 5 percent have not had it re-appraised,” after the hurricanes. In some said John Braschi, product cases, Florida hotels could director of commercial insurance get those deductibles down to for Fireman’s Fund Insurance in between 2 percent and Novato, Calif. 3 percent. Hotel operators also Hotels in any should make sure they location also could try have good appraisals to get back blanketand coverage on type coverage, which technology, hardware covers damages and software, and that for all the hotels’ they are getting credit properties, instead for energy-efﬁcient of placing a limit per measures. Braschi location. In addition, In addition, FIREMAN’S FUND companies could get mitigating risks to a back coverage for hotels’ guests and landscaping damage if they lost workers can save in insurance that coverage after hurricanes rates and litigation. and damaging winds. “Workers’ compensation Also, experts suggested is often the largest insurance that hotels that have recently cost,” Brandt said. “However, completed an improvement that is a controllable item project should have their in which hotels need to policies re-evaluated. understand what their costs are “We ﬁnd that often motels, per employee and look at their especially, are undervalued. internal trends.” They have added all kinds of hmm@questex.com Property rate changes since 2004 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0 2004 2005 2006 2007 2008 25% (20-25%) (20-25%) 100% Workers’ compensation rate changes since 2004 0 -0.05 -0.1 -0.15 -0.2 -0.25 -0.3 -0.35 -0.4 -0.45 -0.5 (10-15%) (10-15%) (15-20%) (10-15%) 2004 2005 2006 2007 2008 Source: Arthur J. Gallagher Risk Management Services Source: Arthur J. Gallagher Risk Management Services http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - February 4, 2008

Hotel & Motel Management - February 4, 2008 Contents Murray, Keltner to Keynote Atlanta Event ABVI Approves Per-room Fee Hike Growth, Guest Loyalty on Lexington’s Plate Perspective Legally Speaking AAHOA Update Marketing Matters Consultant’s Corner On Finance Training Trends HotelWorld Update Trends & Stats Outdoor Furniture Limited-service-hotel-chain Report Energy-management System Provides Link to Savings Upgraded Bedding Program Cost Comes Due Less Hot Water Equals Less-costly Bills Events Learn to Take Advantage of Lower Insurance Costs Brokers Will Remain Unscathed in 2008 Transactions Ad/Edit Index Marketplace Classifieds Checking Out

Hotel & Motel Management - February 4, 2008

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