The Hotel Times - September 2008 - (Page 26)

INSURANCE OUTLOOK » BY C. RICHARD CLARK U.S.-style insurance for the international operator Proper coverage protects against high awards in U.S. lawsuits T C. Richard Clark is the managing director of real estate and hospitality at Arthur J. Gallagher Risk Management Services. he hospitality industry is expanding rapidly all over the world, and much of it is fueled by major U.S. brands. Marriott International, InterContinental Hotels Group, Hilton Hotels Corp. and Starwood Hotels & Resorts Worldwide, to name a few, all have major expansion plans, much of it through franchising. Because many of these companies are U.S.-based, they follow the U.S. legal system. Many attorneys outside the country have formed alliances with U.S. law ﬁrms to facilitate suing Americanowned or -branded hotels in U.S. courts for injuries or other incidents that occur in properties outside the U.S. Many international franchisees are unfamiliar with these types of legal actions and are not accustomed to being held liable for slips and falls in bathrooms, injuries due to guest intoxication and many other causes that are commonplace in the U.S. Any property with ties to the U.S. through ownership, franchise or management may be subject to being sued in U.S. courts where the awards can be large and the courts more liberal than the country where its property is located. Most of the major franchisors require their franchisees to buy coverage that includes U.S. jurisdictional coverage. This coverage may be difﬁcult to purchase in the local insurance market, which typically excludes U.S. coverage. It may take some research to ﬁnd, yet, it can be purchased. Wrap-around policies also are available to supplement local liability policies and bring the coverage up to speed to properly protect the appropriate parties against legal actions brought in the U.S. Exposure to loss coverage includes injuries from slips and falls, assaults, drownings and normal guest injuries. It also includes claims for items taken from guestrooms and valet parking incidents. Some other less common but emerging issues are cyber risk, which includes identity theft and hacker attacks; Any property with ties to the U.S. may be subject to being sued in U.S. courts where the awards can be large and the courts more liberal. third-party discrimination due to race or religion; bodily injury due to foodborne or airborne illness; and defamation and invasion of privacy. Illness or injury due to environmental issues could be a result of items classiﬁed as pollutants and therefore not covered under many liability policies. Coverage is available for all of the above exposures. The hotelier should check with their insurance broker and possibly the franchisor to assist with ﬁnding the best access point to proper coverage for local and international exposures. hmm@questex.com 26 The Hotel Times September 2008 www.TheHotelTimes.com http://www.TheHotelTimes.com

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The Hotel Times - September 2008 Business Outlook Editorial Outlook Contents In The News Transactional Facts Hurry Up and Wait Capital Outlook Development Outlook Brokerage Outlook International Litigation: Who gets sued? Insurance Outlook Economic Crisis: Stress or Opportunity for Franchisees? Franchise Outlook Ad/Edit Index In Closing

The Hotel Times - September 2008

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