Category Archives: Insurance

High Wind Warning in Southwestern California


A strong Pacific storm system will move across Southern California today through Saturday. Winds will increase and become very strong towards midday. The strongest winds and biggest potential for damaging wind gusts between 2 PM and Midnight. More info on the storm from Google Alert

Does your hotel have an emergency response plan in place? Does your staff know how to respond to severe weather emergencies? This short video will cover proper steps to prepare your staff on how to respond to these type of emergencies.

Petra, Severe Weather, Hotels, california


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Filed under Business Interruption Insurance, Claims, Flood Insurance, Hotel Industry, Hotel Restaurant, Insurance, Liability, Risk Management, Severe Weather

The Ransomware Dilemma: Is Paying Up a Good Idea?

The ongoing fight against ransomware attacks and the cyber criminals perpetuating this menace is more than a full-time job. In a cyber world without boundaries, ransomware has become a worldwide problem where no organization is immune to victimization.

According to some security experts, the first known reports of ransomware attacks took place in Russia in 2005. Over the past 10 years, these attacks have spread to all corners of the globe, successfully targeting hundreds of thousands of business systems and home PCs. And, the effects are mounting: the FBI reported ransomware-driven losses of $18 million over a 15-month period in 2014 and 2015.

The way ransomware works is by making an infected device unusable by locking the screen or system, encrypting its data and then demanding a ransom to unlock and decrypt this data. In some cases, once the user’s PC is infected, the ransomware also displays threatening messages disguised as coming from a law enforcement agency in order to appear credible while intimidating the PC owner. Payment is usually demanded in the form of bitcoins, a virtual currency that is untraceable.


This is apparently what happened at Hollywood Presbyterian Medical Center in California in early February 2016 when it fell victim to malware, which locked the hospital’s computer infrastructure. According to reports, to remain operational and continue providing patient care, the hospital was forced to use “old school” methods including paper records, faxing, and good old-fashioned pen and paper.

In a letter regarding the attack, following a bitcoin payment of $17,000, hospital CEO Allen Stefanek stated “…The quickest and most efficient way to restore our systems and administrative functions was to pay the ransom and obtain the decryption key. In the best interest of restoring normal operations, we did this.”

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Filed under Business Interruption Insurance, Claims, Crime, Hotel Industry, Insurance, Management And Ownership, Privacy, Technology, Theft

What’s your data breach response plan?

data breach

While businesses prefer to avoid cyber perpetrators entirely, these days nearly all organizations are at risk of a breach.

As the number of incidents (and claims) continues to rise, the prudent strategy is for firms to not only work diligently to prevent an intrusion, but also to have a plan in place to respond quickly and effectively if they suspect information has been compromised.

A data breach response plan proactively outlines the necessary actions a business must take, providing a framework that can be regularly matched against emerging risks and updated if the firm’s situation changes — for example, if additional staff are added in key data privacy or technology roles or if partnerships are formed that could change the way sensitive information is processed.

Developing a data breach response plan, one that is easy to follow and quick to implement, gives businesses time to prepare the necessary resources and mitigate the damage an exposure can inflict. Leaving key tasks to the last minute, such as scrambling to identify qualified outside legal counsel, is unwise and can significantly impact the timeliness and expense of a breach response. Likewise, pulling the plug on a single server without seeking guidance from an experienced technology expert may not shut down the unauthorized access that caused the exposure, thus leaving the business open to further harm. Worse, it may even erase key information a computer forensics company may need to assist the investigation. Getting the firm’s ducks in a row in advance of any breach is a far more effective cyber mitigation strategy.

One component of many small business breach response plans is accessing the financial and technical support available through a well-structured Cyber Liability insurance policy. Coverage options vary widely, so businesses (or the insurance broker) must carefully examine their needs before crafting a policy. For those firms with lean internal resources and thin financial margins, the right insurance can be a key asset when it comes to implementing a solid breach response plan. Below, three steps that will help organizations mitigate data breach disruptions before they occur.

1. Assemble the team

Who needs to be involved in responding to a breach? Before attempting to pull together more than a cursory list of post-exposure action items, it’s critical that the firm identify those individuals or groups that should be contacted in the event of a potential breach. The team will vary from one business to the next, but most organizations will want to include representatives from the executive group, legal (either internal or an outside consultant), privacy or information security, risk management, information technology, human resources and public relations.

Given the growing reliance on external partners — cloud providers, payroll processors and the like — firms should also consider where vendor touchpoints exist and how or when those third parties will contribute to the breach response process. They may need to be included on the contact list or they may even be responsible for raising the initial alarm if a breach occurs. It’s also important to ensure vendor contracts clearly spell out the company responsible when a breach occurs and who is liable for notifying those impacted. Other vendors are also commonly part of the response team, such as media relations consultants experienced in crisis management and notification firms with the resources necessary to quickly inform breach victims about the situation.

If the business has Cyber Liability coverage, the insurance company should also be part of the breach response plan. There are support services included in many policies that will be helpful in the event of an exposure, ranging from forensic investigation teams to data recovery specialists. To maximize the value of any applicable coverage, firms must be ready to access available features quickly and through the most efficient channels.

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Filed under Crime, Insurance, Liability, Management And Ownership, Risk Management

Successful Education Session at CH&LA SoCal Conference

Petra Risk Solutions had a successful education session at CH&LA‘s SoCal Conference. Todd Seiders, CLSD, Director of Risk Management, presented “Today’s Safety & Security Challenges for Hotels”. Over 100 people attended! They walked away educated and with a better understanding on how to handle phone scams, human trafficking situations, renting hotel room to minors, ADA scams, and the recent Erin Andrews/ privacy ruling.  Todd CH&LA NoCal & SoCal conference

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Filed under Claims, Conferences, Crime, Guest Issues, Hotel Employees, Hotel Industry, Hotel Restaurant, Insurance, Risk Management, Theft

Reduce Workplace Injuries, Boost Productivity

High levels of customer satisfaction in the hospitality and leisure industries are critical to the success of any property. It is even more challenging to maintain customer satisfaction while reducing costs associated with employee injuries and the workers’ compensation claims. Employees are continually trained on the nuances of customer service skills and customer interactions in order to achieve the best levels of service. However, maintaining a high level of productivity is difficult when employees have been injured. Increasing injury rates result in higher workers’ compensation insurance, medical care, and claim costs.

Taking a look at the causes of work-related injuries, implementing standardized work practices, and making simple changes can yield a significant decrease in injury risk and an increase in productivity. A single property within a national hotel chain has been able to decrease its workers’ compensation costs by $500,000 in the first year while improving its customer satisfaction ratings.

Within the U.S. hospitality and leisure industry, food services and accommodations employees represent 12.9 million of the 15 million employees. In 2014, the recordable injury rate among these employees was 3.6 injuries per 100 full-time employees. These injury rates can be higher among employees in departments such as housekeeping and banquet operations. One study indicated that up to 95 percent of the housekeepers indicated they experienced severe to very severe physical pain.

Any effective ergonomics and process improvement program should include aspects such as management support, employee involvement, training, problem identification, early reporting of injury symptoms, evaluation of hazard controls, implementation of hazard controls, and evaluation of progress.


Effective administration and implementation of each aspect is important, but knowing which changes will bring the most improvement in productivity and injury reduction can make a big difference.


Let’s take a look at housekeeping: Their work ensures proper cleaning as well as maintaining the visual standards of the brand. Over the past decade, consumers’ expectations of luxury as it relates to hotel rooms have increased. Furnishings are more luxurious and often include thicker mattresses, plush duvets, decorative bed skirts, and the inclusion of a variety of pillows.

In an effort to reduce injury risk while maintaining or improving customer satisfaction within a housekeeping department, we reviewed common tasks and identified the tasks that were most likely to cause injury. A detailed study was conducted of these common housekeeping tasks, such as cleaning bathrooms, changing and making beds, and removing trash and soiled linen. The evaluations determined the extent of injury risk factors and opportunities to improve the quality of the services performed. After the analysis, recommendations were made related to the selection of appropriate tools, the modification of techniques for cleaning showers and bath tubs to decrease awkward postures and minimize forces, and the identification of methods to minimize awkward postures and forces while changing beds and handling trash and dirty linens. One key factor in the success of these changes was training the employees in the appropriate methods, injury risk factors, and the proper use of tools. The changes made within the housekeeping department decreased duvet-making time by 32 percent while maintaining a standard look; reduced the number of awkward shoulder postures by 72 percent; and reduced the number of awkward back postures by 45 percent. Guests indicated an improvement by a 5 percent increase in customer cleanliness ratings.

Another department that commonly experiences a high number of injuries is the banquet operations department. Within the banquets area, server and setup tasks were also evaluated. Following similar principles, tasks were identified that had previously caused injury or were difficult to perform. Evaluations were again conducted and recommendations were made. These recommendations involved working with vendors to identify the changes to carts that could make the most impact on decreasing push/pull forces while not decreasing the load on the carts. Additionally, standardized methods of room setup and table movement were established. These simple changes and employee training yielded a decrease in injury risk, improved employee morale, and increased efficiency.

Maintaining high levels of customer satisfaction while minimizing employee injuries and workers’ compensation costs in hospitality and leisure industry is critical to the success of any property. Evaluation of tasks by a qualified professional (such as a certified professional ergonomist) can ensure that risk factors are appropriately identified and that the recommendations will adequately reduce injury risk. Minimizing costs, reducing injuries, improving efficiency, and improving customer satisfaction ratings are benefits of a successful ergonomics and process improvement program.

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Filed under Claims, Employee Benefits, Employee Practices, Health, Hotel Employees, Hotel Industry, Injuries, Insurance, Management And Ownership, Risk Management, Training

Insurance Helps Protect Against Data Breach Fallout


Joshua Gold of Anderson Kill speaks about the different types of insurance coverage to protect against data breaches at the Hospitality Law Conference. (Photo: Bryan Wroten)

The past year was a big year for data breaches in the hotel industry, and industry experts say there’s no sign of it stopping any time soon. That means hoteliers not only need to work on prevention, but they also need protection in case an attack does occur.

Panelists in the session “Nailing down responsive cyber coverage that responds to hospitality industry risks” at February’s Hospitality Law Conference told attendees that everything about the current digital age that makes it great, such as connectability and massive data storage, also makes it a risk.

Attempting to list all of the data breaches in the past 12 months would overwhelm the presentation screen, said Joshua Gold, a cyber-insurance attorney at Anderson Kill, and the problem continues to grow.

“It’s getting worse, not better,” he said.

Insuring for different scenarios
Darin McMullen, an attorney at Anderson Kill, said there are four overlapping causes of data breaches at a company:

  • Accidental internal, a common cause of breaches, occurs when an employee loses a device with company business data on it, and it might fall into someone else’s benign or malicious possession.
  • Accidental external breaches occur through third-party vendors or subcontractors who have access to a company’s system or network. While they’re not trying to compromise their client’s security, they may cause harm through their own negligence.
  • Intentional internal breaches happen when a disgruntled employee creates the breach. This can be a common problem in hospitality where turnover can be high. Employees don’t necessarily have to be high-level to access sensitive data.
  • Intentional external breaches are the more traditional hacking events caused by criminal organizations or hacker activists, or hacktivists.

“Some you have control over; some you have virtually no control over,” McMullen said, who added that hoteliers should review their insurance options to protect against different risk exposures.

Gold said he’s working on an insurance claim for a client who had a former employee introduce malicious code into the company’s system. The code fried every controller, he said, causing physical damage to real pieces of hardware. For a networking company, this was a huge loss.

“The insurance company is saying electronic commands can’t cause real property damage,” he said. “It is covered under the literal language, but they don’t want to set that precedent. We will have to sue them.”

When looking for different cyber-insurance policies, Gold said, it’s important to keep in mind all the potential scenarios as some have provisions that exclude what hoteliers might need and think would be included, such as the physical damage in his client’s case. He said hoteliers should work with a savvy broker who specializes in cyber-insurance packages. There are so many different primary forms out there, he said, which can change every three to four months based on what clients face.

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Filed under Guest Issues, Hotel Industry, Insurance, Management And Ownership, Risk Management, Technology, Theft

Workers Compensation Best Practices: What You Should Be Doing

Workers Compensation

Effective cost management of workers compensation claims starts at the time of the injury. Otherwise, studies confirm that the longer it takes to report a claim, the higher the cost.


“What happens in the first 24 hours post-injury is critical,” said Michael Bell, executive vice president for U.S. business development with Gallagher Bassett. Industry experts agree that successful management of these expenses must be comprehensive from start to finish, from the time of the injury through recovery and eventual return to work.

Bell estimates that 30% of all injured workers require medical guidance instead of medical care. This means that 30% can be resolved with self-treatment and that a claim doesn’t have to be filed. It eliminates a costly visit to the emergency room, where expenses can quickly climb to $1,000 or more.

The top priority — helping the employee recover and return to work — is best addressed by prompt treatment and proper guidance to direct the patient to the right source of care. For example, if someone is suffering from complex pain issues, a general practitioner may not be the best option for a claim that is not going to end with a simple outcome.

An injury is frequently a new experience for many employees who are looking for guidance. Where that guidance comes from, whether on the employer’s side or the claims handling side, makes a difference. A recommended best practice, Bell said, is a nurse triage process. Nurses will record initial interviews at the site of the accident, a critical time when facts can be clarified and confirmed. A worker will be much more honest in sharing information with a nurse than with a claims professional. A triage nurse also determines whether treatment is even necessary and then guides the patient to the appropriate medical provider.

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Filed under Hotel Employees, Hotel Industry, Insurance, Management And Ownership, Workers' Compensation

Hotel Housekeeping Firm Accused of Insurance and Tax Fraud


The owners of an Irvine-based company that provides housekeeping services for luxury resorts and major hotel chains in Southern California have been indicted in what prosecutors call a $7 million insurance and tax fraud scheme, the San Diego County district attorney’s office announced Monday.

Prosecutors alleged in a news release that Hyok “Steven” Kwon and Woo “Stephanie” Kwon hid the existence of about 800 employees for almost a decade through a “methodical and systematic shell game involving six straw owners.”

The scheme enabled the Kwons to avoid paying more than $3.6 million in housekeeping workers’ compensation insurance premiums and more than $3.3 million in payroll taxes, prosecutors said.


The Kwons’ company, Good Neighbor Services, has high-profile clients in San Diego, Los Angeles and Riverside counties, including the Hotel del Coronado and hotel chains such as Ritz-Carlton, Four Seasons, Hilton and Hyatt, according to prosecutors.

“These defendants lied on the backs of their employees who were cleaning rooms in some of the most prestigious hotels in California,” San Diego County District Attorney Bonnie Dumanis said in a statement. “If employees got hurt on the job, they were threatened with being fired.”

Prosecutors allege that housekeeping and other employees at Good Neighbor Services were not paid overtime and not granted workers’ compensation benefits if they were hurt on the job.

One worker whom investigators interviewed said she had to repeatedly ask for medical attention when she was hurt, and when the Kwons did send her to a doctor, it was a dentist, not a physician, according to the district attorney’s office.

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Filed under Hotel Employees, Hotel Industry, Insurance, Workers' Compensation

7 Tips to Reduce Holiday Party Liability for Employers


With the Thanksgiving weekend behind us, attention turns to celebrating with family, friends — and coworkers at the company holiday party.

A majority of organizations are still planning to hold holiday or end-of-year parties; however, a growing number of employers are cutting back, according to a recent survey from the Society for Human Resource Management. The survey found that almost two-thirds (65%) of human resource professionals said their organizations would host a party for all employees. But 30% of respondents said that no party was planned at their organization, an increase of 13 percentage points from 2012.

How and where will those companies celebrate? A majority — 67% — of respondents said their party would be off site, and 22% said they would close early that day. More than half (59%) said alcohol would be served at the party. Of those planning to serve alcohol, 47% indicated they would regulate alcohol consumption at the event, with 71% using drink tickets or having a drinks maximum.

Employers are concerned about possible repercussions from employees drinking too much, for example:

   • Drunk driving and possible motor vehicle accidents.

   • Workers compensation for falls and other injuries.

   • Discrimination claims, including sexual harassment and religious


   • Injury to third parties.

   • Premises liability.

   • Underage drinking.

In addition to employer-based liability, many organizations are concerned about their “social host” liability as well. In some states, social host liability is limited to people hosting parties at which minors are served alcohol. In other states, employers may be liable for underage drinking at work functions, and there are still other states in which the law is less clear. The safest action is to develop a policy and guidelines, with advice from your legal counsel and input from the human resources department, then distribute that policy to all employees.

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Filed under Hotel Employees, Hotel Industry, Insurance, Liability, Management And Ownership, Risk Management

California Businesses 40% More Likely to be Sued by Employees


It’s time for California insurance agents to revisit their commercial clients’ liability portfolio.

According to a report released this week from Hiscox, businesses in the Golden State are 40% more likely than their peers to be sued by an employee. In fact, just four states – New Mexico, Nevada, Alabama and Washington, DC – outstrip California when it comes to employee lawsuits.

The reasons why are complicated, but report authors suggest that state laws going beyond federal guidelines are the most likely cause of discrepancies in the rate of employee lawsuits between states. When it comes to California, that means strict regulation around anti-discrimination and fair employment practices that subject businesses to higher scrutiny from workers.

Discrimination, as defined by these laws, comes in many forms including age (over age 40), disability, national origin, race, color, religion, sex (including pregnancy) and genetic information (diseases or disorders in family medical history).

More clear is the effect such lawsuits have on businesses. According to Hiscox, the average legal dispute regarding an employment matter lasts 275 days and in 19% of cases, defendants are subject to a defense and settlement payment. When that happens, businesses can expect to bill their insurers an average $125,000 in claims while taking $35,000 in deductibles on themselves.

The report comes just months after a similar survey from Littler Mendelson, in which 57% of human resource and C-suit professionals said they expect workplace discrimination claims to become one of the top business risks in the next years.

The statistics are a serious argument in favor of ample employment practices liability insurance (EPLI) for California businesses. Without proper coverage, clients could end up on the hook for an extra $90,000, going by national averages. Inadequate limits could also cause a sting, though arguably less of one.

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Filed under Claims, Hotel Employees, Hotel Industry, Insurance, Management And Ownership, Risk Management