Category Archives: Risk Management

by | November 6, 2010 · 8:46 am

Hospitality Industry Crime: Hotel Lobby ATM Machines Can Be “Retrofitted” By Criminals With Card Readers And Cameras To Steal Guest ATM Card Information

“…criminals retrofit ATMs with a card reader that stores the magnetic information of customer cards. They then put that data onto a blank card to make transactions — or cash withdrawals. For withdrawals, they also install a small camera to capture the customer typing in the PIN. Thus, with a small investment of time and equipment, they have everything they need to grab cash from the bank accounts of unsuspecting ATM users…”

According to the BBB alert, “ATM skimmers are close to reaping $1 billion annually from unsuspecting consumers. Javelin Strategy & Research estimates that one in five people have become victims.”

It’s hardly an urban myth. In fact, I think I am revisiting my previous paranoia and considering becoming yet more cautious. Installing a skimming device and a camera is a quick operation, so even the ATM I prefer in the well-lit parking lot of my own bank could fall prey. According to the BBB, in addition to using ATMs that are clean, well lit, and in good repair, I should give it a good visual examination each time I use it. If part of the reader apparatus seems loose, move on — or pull on it and see what happens.

In May, a Florida man did just that. His bank’s ATM looked wrong. He tugged on a part that looked loose — and it came off in his hand. It was a skimming device. His “paranoia” allowed police to shut down that particular operation a mere 10 minutes after it had been set up, thus saving any number of people from being scammed.

For more:  http://www.pcworld.com/article/209959/atm_skimming_cash_machine_paranoia_justified.html

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by | November 1, 2010 · 12:04 pm

Hospitality Industry Employee Safety And Wage Issues: Hotel Management Should Expect 2011 OSHA Regulations To Require A Written “Injury And Illness Protection Progam” And Dept. Of Labor (DOL) Rule Requiring Full Disclosure On “Worker’s Pay Computation”

 

  • The Occupational Safety and Health Administration (OSHA) is developing a regulation mandating that employers have a written health and safety program, referred to as an Injury and Illness Protection Program or “I2P2.”
  • This rule would give an OSHA investigator the authority to find that an injury should have been avoided even if it was not regulated under a specific standard.
  • OSHA will also publish a regulation that will require employers to analyze every employee injury to determine if it is a work-related recordable musculoskeletal injury.
  • This regulation would set the stage for OSHA to revive its controversial ergonomics standard.

 

  • The Wage and Hour Division at DOL has a highly anticipated rule that would greatly expand recordkeeping requirements under the Fair Labor Standards Act (FLSA)
  • It would require employers to disclose how a worker’s pay is computed and complete a written “classification analysis” for each worker who is exempt or outside of the coverage of the FLSA.

For more:   http://www.worldtrademag.com/Articles/Column/BNP_GUID_9-5-2006_A_10000000000000932009

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by | October 31, 2010 · 12:44 pm

Hotel Industry Employee Risk Management: Employee’s Use Of Stairs In Multi-Story Hotels Subject Them To “Significantly Greater Risk Of Injury” And Result In Higher Workers’ Compensation Benefits

“Because the employees’ periodic breaks were mandatory, Phillips was required to use the staircase six times during each shift. In fact, in its opening brief, Rio calculated that during the course of Phillips’ 17-year employment, she traversed the stairs approximately 25,000 times,’
 
“…the court concluded that the frequency with which Phillips was required to use the stairs subjected her to a significantly greater risk of injury than the risk faced by the general public. Consequently, Phillips should be awarded benefits, the high court wrote…”
 

The Nevada Supreme Court has ruled that although employers are not “absolutely liable” when employees are injured “on the job,” companies should apply the “increased risk test” to determine whether they are entitled to workers’ compensation benefits.

The justices explained the increased risk test in Rio All Suite Hotel & Casino v. Phillips. According to court documents, Kathryn Phillips was a poker and blackjack dealer at the Rio All Suite Hotel & Casino in Las Vegas. While taking her mandatory 20-minute break during her usual eight-hour shift, she walked down the stairs to the employee break room, slipped, and fractured her ankle.

Her treating physician determined her injury was work related, and Phillips had surgery to repair her ankle. But Rio’s third-party administrator, Sedgwick CMS, denied her claim saying Phillips did not prove the injury arose out of her employment.

“The types of risks that an employee may encounter during employment are categorized as “those that are solely employment related, those that are purely personal, and those that are neutral,” the high court said.

 

 

 

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by | October 30, 2010 · 5:26 am

Hospitality Industry Fire Risk Management: “Security Alert! Check The Security Of Your Hotel’s Knox Boxes Frequently” By Todd Seiders, CLSD, Petra Risk Solutions

Risk Management

by Todd Seiders, CLSD

Check your Knox Boxes! A Knox Box, known officially as the KNOX-BOX Rapid Entry System, is a small, wall-mounted safe-like box that holds building keys for firefighters and EMTs to retrieve in emergencies. In many jurisdictions, the local Fire Department requires that a Knox Box be located outside of your hotel (check with your local Fire Department for requirements; some jurisdictions may not require hotels to have one), for their use only, in the event of an emergency. The Knox Box has a complete set of the hotel’s master keys locked inside this box.

Knox Boxes simplify key control for local fire departments. Local fire companies can hold master keys to all such boxes in their response area, so that they can quickly enter a building without having to force entry or find individual keys held in deposit at the fire station. Sometimes Knox Boxes are linked via radio to the dispatch station, where the dispatcher can release the keys with telecommunication tone signaling over analog phone lines.

Knox Boxes have advantages and disadvantages for both business owners and emergency responders. The main advantage for their use is that they cut fire losses for building owners since firefighters can more quickly enter buildings without breaking doors or windows. The disadvantage of the system is that it provides a single point of failure for security. If the key to a district’s Knox Boxes is stolen or copied, a thief can enter any building that has a Knox Box. Likewise, if the locking mechanism or structural integrity of the box is compromised, a thief can gain access to the keys and hence access to the entire building. For this reason some building owners wire Knox Boxes into their burglar alarm systems so that opening the box trips the alarm, thus negating its use in facilitating clandestine entry.

 
 
 
 

Todd Seiders, CLSD, 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.)

 

Knox Boxes are an actual miniature safe designed to withstand tampering and are built in a variety of sizes ranging from a box designed for two keys to one designed to hold hazardous material information and multiple keys. Prices start at approximately $250.00. Most Knox Boxes are mounted onto a wood or steel mounting with the screws or bolts covered.

Yet, this does not mean that Knox Boxes are indestructible or cannot be removed from their mounting with force. We have recently seen many of these Knox Boxes forcefully removed from their wall mountings and stolen from the property. In several cases the thieves then returned to the hotel with the master keys and stole items.

In one theft at a hotel the thieves specifically used the master keys to access the storage room for the hotel night audit packets and guest files. The thieves stole hundreds of night audit packets containing the names, addresses and credit card numbers of previous guests. Obviously, hotels can be held liable for breach of guests’ personal information or loss of their credit card data.

So, what should hoteliers do? Secure your night audit packets/files in a secure room that has a hard metal key, rather than a magnetic key card lock. There should only be one or two hotel employees that have access to the night audit storage room, and storage room keys. Secure these files separately, and control all access to them. DO NOT include a key to this storage room in your Knox Box, or on your “master key ring”, or even leave this key unattended in a key box. The night audit file storage room key should be kept separate from all other keys.

As for the hotel’s Knox Box, local ordinances may require that your property have a Knox Box in the event of an emergency. If so, follow these suggestions:

  • Check that your Knox Box is solidly secured to its location, using numerous heavy duty screws or bolts to make it extremely hard to remove.

 

  • Relocate your Knox Box to a well lit area, and in view of security cameras, if your property has them.

 

  • Add a visual inspection of the Knox Box to your property inspection form and security tours so it will be inspected on a regular basis. This will let you know in a timely manner if someone has tried to remove it, or has in fact actually removed or damaged. Immediately re-key the entire hotel if the Knox Box is stolen or the keys inside come up missing. 

 

Pictured above: Here’s what some of the various Knox Boxes look like.

(Todd Seiders, CLSD, 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 | October 29, 2010 · 5:45 am

Hotel Industry Security Risk Management: “Fingerprint Entry Systems” Are Starting To Become More Common As A “Reliable” Guest Security Option

If you want to get into your room at New York’s SoHo Loft, you’re going to have to lift a finger. The seven-room hotel has a fingerprint entry system. Guests touch the door pad then enter a code for extra security. Kimpton’s 190-room Nine Zero Hotel in Boston was the first hotel to install a biometric iris scanner back in 2004, but only guests of the 1,065-square-foot Cloud Nine penthouse suite have to bat their eyelashes.

Those plastic key cards that once seemed so innovative will soon go the way of the actual key. The new thing is contact less Smartcards and RFID (Radio Frequency Identification) cards that need just be waved to allow room access.

Much like the cruise world’s one card system, these cards may soon make hotel stays easier by allowing guests to pay for services, as well as to check-in and check-out, through a single device. Travelers may even be able to save preferences on the cards, from pillow type to floor choice. RFID cards are already in use at New York’s Plaza Hotel, and Starwood Hotels are considering introducing them into their hip Aloft and Element properties.

But travelers worried they will constantly have to traipse back to reception every time they lose their card need not despair. Security systems in some hotels do away with cards altogether.

 “In addition to Radio Frequency Identification, there are also systems that use a smartphone, such as an iPhone,” says Frank Wolfe, CEO of Hospitality Financial and Technology Professionals. “When a guest checks into a hotel and provides their phone number, they get an encrypted sound code via text message.” You can then play back the code to unlock your room door.

Yet more card-free security systems are on the way. They may still be minor blips on the greater hotel horizon, but biometric systems that seem right out of Mission Impossible have been introduced in the U.S. If you want to get into your room at New York’s SoHo Loft, you’re going to have to lift a finger. The seven-room hotel has a fingerprint entry system. Guests touch the door pad then enter a code for extra security. Kimpton’s 190-room Nine Zero Hotel in Boston was the first hotel to install a biometric iris scanner back in 2004, but only guests of the 1,065-square-foot Cloud Nine penthouse suite have to bat their eyelashes. The uses for biometrics don’t have to stop at the guestroom door, either. The Nine Zero also uses the technology to make the property safer all round, as it has installed the LG IrisAccess 3000 at the employee and delivery entries to the hotel, as well, meaning that non-staff members and intruders can’t access the property.

For more:  http://news.travel.aol.com/2010/10/29/the-future-of-hotel-security/

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by | October 26, 2010 · 12:14 pm

Hospitality Industry Food Safety: U.S. Food And Drug Administration (FDA) Is Recommending Restaurant Operators To Employ A Certified Food Protection Manager

 Calling for continued improvements in food safety, the U.S. Food and Drug Administration (FDA) recommended that all restaurants and retailers employ certified food protection managers, according to a report by Nation’s Restaurant News.

Donald Kraemer, the FDA’s acting deputy director for operations, told Nation’s Restaurant News that the agency plans to add a provision requiring restaurants to employ certified food protection managers to a future edition of the federal “FDA Model Food Code.”

The recommendation, which was met with support from both the National Restaurant Association and the National Council of Chain Restaurants, came Friday as the agency released the results of a 10-year study of retail food risk factors. While the study found overall improvement, the FDA said the presence of a certified food protection manager correlated with significantly higher compliance levels with food safety practices, the report stated.

“In looking at the data, it is quite clear that having a certified food protection manager on the job makes a difference,” said Michael R. Taylor, the FDA’s deputy commissioner for foods. “Some states and localities require certified food protection managers already, and many in the retail industry employ them voluntarily as a matter of good practice. We think it should become common practice.”

The FDA has no timeline for adding a food protection manager provision to the Food Code, but Kraemer said the agency will work to that end through normal channels involving the Conference for Food Protection (CFP). The CFP provides the FDA with input and recommendations, and is made up of members of foodservice trade groups, the food industry, government, academia and consumer organizations. The group meets biennially and convenes next in 2012.

NRA spokesman Mike Donohue said 24 states currently require restaurants to have certified food protection managers. He added that in the other 26 states, some local jurisdictions may have requirements for the employment of such specialized employees, or the state may require such a hire for a specific restaurant or chain that has had food safety problems.

Taking the concept further, some states — including Oregon and, beginning next year, California — require all food handlers to undergo basic safety training and pass an exam attesting to their understanding of the coursework, according to the report.

The FDA’s 10-year study of retail food risk factors found full-service restaurants with certified food protection managers had a 70-percent compliance rate with food safety practices, vs. a 58-percent compliance rate at restaurants without such an employee. In delicatessens, compliance was 79 percent with a manager, compared to 64 percent without, the FDA reported.

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by | October 20, 2010 · 3:20 pm

Hotel Industry Guest Issues: Hotel Guest Databases Such As “GuestChecker.com” Can Assist Hotel Management In Avoiding “Problem Guests”

“Many hotels now refuse guests based on their perceived or real behavior,” the story says. “For example many hotels in Florida and the Caribbean will not accept reservations for “Spring Break” groups. In Europe, hotels shy away from groups of British Soccer fans.”

Hotels are increasingly interested in swapping information with each other about “bad” guests, just like guests do with “bad” hotels using TripAdvisor, according to Hospitality Business News.

Most hotel guests, naturally, are good.

But when hotels do encounter guests who, for instance, call their credit card company to reverse a charge, assault another guest or even smoke in a non-smoking area, they just might wind up in the type of database maintained by GuestChecker.com.

  • What private information is kept on me?: The database contains a guest’s name, address, and phone number only, as opposed to more personal information such as credit-card number, race or religion. The information is kept in a database with “bank-level security” and is not available to the public.
  • Can hotel managers see the full list?: Hotel managers can’t scroll through the database to see who’s on it. They can only search for specific names and receive a “Match” or “No Match” result.
  • Is this a blacklist?: The company doesn’t call the database a “blacklist” because members “do not have the ability to advise other accommodation providers to refuse service for a guest.” It’s designed to help the next hotel “make an informed decision on how to best prepare for that guests arrival.”
  • What offenses land me on the list?: The company tracks five categories of behavior, with the worst being stealing, assault and non-payment. Lesser offenses would include actions such as smoking in non-smoking areas or using facilities such as the swimming pool or tennis court after hours. “Someone who accidentally knocks over a lamp and offers to pay for it should not be placed in the same category as someone who purposefully trashes a hotel room,” the company says.
  • Who reports me? One person per company or hotel can report a guest for an offense, and GuestChecker.com requires that person be a senior manager. “This stops any malicious reporting by the night watchman, for example,” the company tells Hospitality Business News.
  • How long will I be on the database?: A person could stay on the database for as long as four years.

    • For more:   http://travel.usatoday.com/hotels/post/2010/10/hotel-blacklist-how-do-hotels-define-a-bad-hotel-guest/127726/1

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    by | October 18, 2010 · 9:38 am

    Hospitality Industry Health And Safety: Use Of “Improved Safety Practices” And “Older Workers” Contribute To A Decrease In Workers Comp Claims

    “Indemnity and medical severity for workers compensation claims continued to rise in 2009…

    “…the frequency of workers comp claims dropped 4% in 2009 following a 3.4% decrease in 2008. A downward trend in claims frequency that started in 1991 likely will continue through this year, NCCI said…”

    Factors such as increased use of robotics, improved safety practices and an aging workforce have contributed to the continuing frequency decrease, NCCI said.

    Complex claims, such as those related to carpal tunnel syndrome and lower-back issues, declined more than average during the past five years, NCCI added.

    Increasing claim costs, however, have partially offset the decline in frequency. Average indemnity costs increased about 4.5% in 2009 despite a decline in average weekly wages.

    “It remains to be seen whether changes in average wage and indemnity cost per claim will begin to converge in 2010,” NCCI said in the research brief.

    Average medical costs for workers comp claims rose 5% last year, the lowest increase in the past 15 years, NCCI said.

    For more:  http://www.businessinsurance.com/article/20101018/NEWS/101019945

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    by | October 12, 2010 · 11:56 am

    Hospitality Industry Employee Risk Issues: Fair Labor Standards Act (FLSA) May Require Hotel Management To Pay “Overtime Compensation” To Employees Who Use Smart-Phones “After Hours”

    Under the FLSA, nonexempt employees are entitled to overtime compensation for “time spent working” beyond a 40-hour workweek. An employee does not even need to be required by the employer to work overtime but must merely do so for the employer’s benefit.

    While an employee’s off-the-clock smart-phone use may amount to only a few minutes here or there—and the FLSA provides an exception for “de minimis” overtime—legal experts say an employer’s liability can mount up in a class action.

    Moreover, the electronic records stored on smart phones may give an employee solid evidence on which to base an overtime claim.

         The department “has willfully violated the FLSA [Fair Labor Standards Act] by intentionally failing and refusing to pay Plaintiff and other similarly situated employees all compensation due them under the FLSA” for their after-hours Blackberry use, Sgt. Jeffrey Allen said in a suit filed in May as a proposed class action. A judge has to certify the case as a class action for it to proceed.

    The case is one of a handful nationwide in which employees have claimed overtime pay for smart-phone use—and apparently the first involving public employees. But lawyers say such cases are a clear warning to employers to put a smart-phone usage policy in place before they end up in potentially costly litigation. Smart phones “are very dangerous and risky for nonexempt employees to have if you’re worried about overtime,” says Jeremy A. Roth, a partner at San Diego law firm Littler Mendelson. 

    The case is one of a handful nationwide in which employees have claimed overtime pay for smart-phone use—and apparently the first involving public employees. But lawyers say such cases are a clear warning to employers to put a smart-phone usage policy in place before they end up in potentially costly litigation. Smart phones “are very dangerous and risky for nonexempt employees to have if you’re worried about overtime,” says Jeremy A. Roth, a partner at San Diego law firm Littler Mendelson.

    For more:   http://www.workforce.com/section/legal/feature/legal-static-over-issuing-smart-phones-workers/index.html

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    by | October 11, 2010 · 2:08 pm

    Hospitality Industry Health Risk Management: Hotel Owners Must Establish Formal “Bed Bug Infestation Risk Management” Protocols For Preventing And Then Eradicating Infestations

    In certain cases, courts can even levy large judgments against hotel operators who rent rooms infested with bed bugs. In 2003, a federal appellate court awarded $372,000 in

    State inspectors have the authority to shut down an establishment that poses an "imminent health hazard" involving fire, flood, sewage backup, rodent infestation, bed bug infestation or "any other condition that could endanger the health and safety of guests, employees and the general public."

    punitive damages, roughly 37 times the compensatory award in the case, to a couple bitten by bed bugs while staying at a chronically infested Motel 6 in Chicago.

    Hotel owners and operators have faced periodic reports of bed bugs for decades, but a newfound public fascination with the problem, combined with the proliferation of websites dedicated to documenting bed bug outbreaks, has created a frenzy of media activity never before seen. Indeed, bed bug stories have been reported in the New York Times, Washington Post, Wall Street Journal, and many other local television and print outlets across the country. Stoking the traditional media’s interest in bed bugs is a rash of new online forums where travelers post the unsettling details of encounters with the pests.

    Much of the coverage seems sensational and overblown, but property owners and third party operators in the hospitality industry have to face the reality that the process of eliminating bed bugs from hotel rooms can be quite expensive and can lead to litigation and costly settlements. Additionally, reports of infestation on online travel sites like TripAdvisor and bed bug reporting sites like bedbugregistry.com and bedbugreports.com can cause significant reputational harm and loss of business.

    The good news for hospitality companies is that robust risk management practices, and the appropriate insurance and risk financing programs, can significantly mitigate the financial impact bed bugs can have on a hotel organization.

    Establishing formal risk management protocols around bed bugs is an important first step in minimizing the cost of infestation. Proactive steps for hotel organizations include creating a formal program to train housekeeping staff on spotting bed bugs, creating a policy on how to handle outbreaks or complaints and implementing regular pest control inspections.

    “Bed bugs are on our list of emerging issues facing the insurance industry, not only for hotels, but in the retail, apartment, and residential healthcare sectors,” noted Brian Gerritsen, Senior Director of Hospitality Business at Fireman’s Fund Insurance Company. “The recent increase in bed bug related claims has prompted us to become more proactive about the issue with our insurance customers.” Mr. Gerritsen’s team recently released an industry alert recommending that hotel operators take several actions to prevent potential infestations in guest rooms including:

    • Chemically treating mattresses and sealing them in plastic

    • Washing/drying bedding and towels regularly and daily if possible

    • Vacuuming cracks, crevices and other hiding places and sealing openings permanently so the bugs don’t have a place to hide

    • Having regular inspections and extermination services done by a qualified pest control contractor

    • Training and educating housekeeping employees to recognize the presence of bed bugs and immediately report any activity to the appropriate personnel

    For more:  http://www.pressreleasepoint.com/don039t-let-bed-bugs-bite-insurance-and-risk-management-perspective

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