Category Archives: Risk Management

by | December 16, 2011 · 7:03 am

Hospitality Industry Crime Prevention: Montana Police Task Force Trains Hotel Employees To Look For Evidence Of Drug And Prostitution Activity

Employees are taught to look for signs such as people who pay only in cash, give false vehicle information or don’t let housekeeping into their rooms for long periods of time.

The task force recently began implementing a program in which hotel and motel employees are trained to look for evidence of illegal drug activity coming from rooms, and to know who to call if they see something suspicious.

The recent arrests of three people suspected of running a prostitution operation in a room at the TownHouse Inn was a result of a tip made by an employee of the hotel to the Central Montana Drug Task Force.

The employee was trained by Sgt. Chris Hickman of the Great Falls Police Department, a member of the multi-agency task force, to recognize signs of suspicious behavior. While it was initially suspected that the three individuals were running a drug operation, Hickman said he was glad that officers were able to shut down the alleged prostitution as a result cooperation from hotel staff.

 According to Hickman, police are pursuing three active cases because of tips from cooperative lodging employees in Great Falls, but an unfortunate by-product of that cooperation can sometimes be a sullied reputation for the business if a tip leads to a publicized arrest.

For more:  http://www.greatfallstribune.com/article/20111214/NEWS01/112140311/Great-Falls-program-netted-prostitution-ring-relies-hotel-staff-tips

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by | December 15, 2011 · 6:47 am

Hospitality Industry Guest Safety: Hotels And Resorts Face Lawsuits Over Severe Burns To Children From Guest Room "Glass Fireplaces"; Glass Can Reach Temperatures Of 400 Degrees

“…more than 2,000 children ages 5 and younger have suffered burns from fireplace glass since 1999, according to a federal estimate. Some burn specialists think the actual toll is higher…”

“…(one) lawsuit, filed this June in federal court in Denver, seeks damages from several fireplace companies along with operators of the resort. They knew “these fireplaces would be installed at heights for which the decorative glass front was perfectly suited to contact by infants and small children,” the lawsuit states, yet “took no steps to guard against direct contact with the super-heated glass or to meaningfully warn about the extreme…burn potential.”

Citing the “extreme risk of injury,” the American Burn Association, representing burn surgeons, nurses and therapists, last week became the latest to call for adoption of a mandatory safety standard. It joins such groups as Consumers Union and the Consumer Federation of America.

The glass commonly reaches temperatures of 400 degrees, as hot as an oven on broil, and is usually placed at a perfect height for curious toddlers to touch or fall into. These encounters can easily result in skin graft surgery and painful recovery, with medical costs in the six figures. One safety expert called it an “insidious and unappreciated hazard.”

Consumer groups and anguished parents are urging the Consumer Product Safety Commission to impose federal safety regulations. But the fireplace industry, which up to now has policed itself, is resisting. To head off federal regulation and more lawsuits from families of burned kids, manufacturers are working on a revision to their current voluntary standard that will be taken up by an industry technical panel on Dec. 13.

For more:  http://www.tucsonsentinel.com/nationworld/report/121211_fireplace_burns_regs/fireplace-industry-resists-regulation-over-child-burns/

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by | December 14, 2011 · 6:21 am

Hospitality Industry Information Security Risks: Most Hotels And Restaurants Have Experienced A "Cyber Attack" In The Past Year; "Intellectual Property Protection" Is Too Often Ignored

“…Seventy-three percent of small-to-middle-sized companies experienced a cyber attack in 2010, and 30% of those attacks were extremely effective, according to Symantec, a software security developer based in Mountan View, Calif…”

“…estimates are that this year…the cost associated with each breach has gone up to $214 per record…Negligence is a big issue,” “

With the increase in worldwide cyber crimes, smaller private businesses may be more vulnerable than larger ones, said an executive of Chubb Group of Insurance Companies. “It’s the perfect cyber storm,” said Ken Goldstein, vice president of the Chubb Group of Insurance Companies. “We’re in a bad economy; we’ve got private companies, generally small to middle in market size, that are strapped in what they can spend on intellectual property protection,” he said.

At the same time, he said, new technology means “cyber thieves can essentially hack from anywhere around the globe.”

Cyber crimes can do serious harm to an organization’s bottom line. According to Ponemon’s, the median annualized cost of cyber crimes for the 50 organizations studied was $5.9 million, with a range of $1.5 million to $36.5 million. This represents a 56% increase since last year.

“Multiply that by the number of customers that you service; it could be a sizable amount of money that a company would have to pay out of pocket,” Goldstein said.

The most costly cyber crimes are those caused by malicious code, denial of service, stolen devices and Web-based attacks, Goldstein said. Besides deliberate cyber theft, Goldstein says company information loss sometimes is a byproduct of employee negligence. An employee losing their mobile device at a hotel or restaurant, for example, could lead to a breach, he said.

For more:  http://www.fa-mag.com/fa-news/9382-smaller-private-companies-at-greater-risk-of-cyber-attack-.html

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by | December 13, 2011 · 6:48 am

Hospitality Industry Reputation Risks: Hotel's Must Protect Against Events And Fallout From Attacks Against Company's Brand And Reputation

“… there is no shortage of reputational risks from social media and the Internet in general, from corporate manslaughter, money laundering, corporate corruption, and terrorism…”

With the boom in social media, interest in reputational risk has itself boomed. The term refers to a company’s risk of having its reputation damaged because of certain events or incidents and the fallout that takes place because of these incidents. In some cases, the effects can be severe enough to put a company out of business.

ReputationGuard was designed to help insureds cope with reputational threats, providing access to reputation and crisis communications firms Burson-Marsteller and Porter Novelli and coverage for costs associated with avoiding or minimizing the potential impact of negative publicity.

There are two categories of coverage:

  1. For reputation attacks: a public attack upon a company’s reputation. The costs of hiring communications experts from the Chartis panel and communications costs.
  2. For reputation threats: acts or events that the company believes, if made public, would have a material impact on the company’s reputation and would be seen as a breach of trust by the company’s stakeholders.

Insurers will not exclude any business segments but most interest is in those with revenues of $500,000 to $2 billion.

For more:  http://www.insurancejournal.com/uncategorized/2011/12/13/226947.htm

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by | December 12, 2011 · 6:50 am

Hospitality Industry Security Risks: Hotels And Restaurants Must Have "Armed Robbery Prevention" Procedures; Available From Insurance Carriers

“…Because hospitality establishments have a certain amount of cash on hand, agents and cashiers may face the potential danger of robberies…”

  1. Is there a high degree of visibility?
  2. Are shop or outlet displays free from posters and signs?
  3. Are  counters and cases low enough for line of sight?
  4. Are all sections of business are visible from central cashier area?
  5. Do you call authorities if you suspect someone?
  6. Have you secured your desk or cashier operation if there is a reason for concern?
  7. Have you installed a holdup alarm system and instructed staff in its use?
  8. Do you keep minimal cash?
  9. Is your routine for bank deposits varied?
  10. Is your safe locked at all times?
  11. Have you taught robbery prevention to employees?
  12. Are references checked before hiring new employees?
  13. Do two or more people open and close your business?

For more:  http://www.hospitalitynet.org/news/154000320/4054068.html

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by | December 11, 2011 · 6:38 am

Hospitality Industry Food Safety: The "2009 FDA Food Code" Established New Federal Standards Limiting Handling Of Foods With "Bare Hands", Lowered Refrigeration Temperatures

“…The United States Food and Drug Administration (FDA) Food Code (established) a new set of federal standards in 2009…multiple federal agencies, with input from business interests…(made) several changes in how health inspections are conducted…”

CLICK ON "FDA" TO VIEW FDA FOOD CODE

  • Restaurants will have to put date markers on all food containers in their refrigerators and freezers
  • Prepared food may be kept for no more than four or seven days, depending on the temperature to which it’s chilled
  • Cooks and kitchen help will no longer be allowed to touch ready-to-eat foods with their bare hands
  • Gloves must be used
  • The standard is minimal bare-hand contact
  • Refrigeration standards are being tightened
  • Potentially hazardous foods – those that can make you sick if you’re not careful – must be chilled to 41 degrees

For more:  http://www.starnewsonline.com/article/20111210/articles/111219993?p=1&tc=pg

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by | December 9, 2011 · 6:55 am

Hospitality Industry Fire Risks: Louisiana Hotel's Rooftop "Electrical Room Fire" Extinguished By Sprinkler System; Building Suffers "Significant Water Damage" As Water Seeps "All The Way To Lobby"

“…the sprinkler system (stopped) the spread of the fire. But the building suffered significant damage from water that seeped from the roof all the way into the lobby…”

Officials are investigating the cause of a two-alarm fire on the roof of the Brent House Hotel at Ochsner Medical Center’s Old Jefferson campus that prompted the evacuation of a few hundred employees and hotel guests Thursday afternoon. There were reports of two people who suffered minor smoke inhalation, according to Joe Greco, director of the East Bank Consolidated Fire Department.

Firefighters went to the roof and discovered the source of the smoke was a 20-by-30-foot mechanical room that houses the building’s electrical panels and the elevator motors. Greco said the crew encountered heavy smoke and some flames in the room, but were able to extinguish the fire by 1:32 p.m.

The cause of the fire was still not known Thursday evening. Although there was speculation earlier in the day that the blaze may have started in the motor of one of the elevators, Greco said there was no evidence of that.

For more: http://www.nola.com/traffic/index.ssf/2011/12/nvestigators_look_for_cause_of.html

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by | December 8, 2011 · 6:54 am

Hospitality Industry Swimming Pool Risks: Hawaii Hotel Owner Must Face Trial Over "Near Drowning And Incapacitation" Of Woman

“Under Hawai’i law, a landowner has a duty to use reasonable care for the safety of all persons reasonably anticipated to be on the premises….Further, Hawai’i courts recognize that a hotel has a ‘special relationship’ with its guests […] to protect the latter against unreasonable risk of physical harm.”

     “…Court precedent found in 2010 with Robbins v. Marriott Hotel Services establishes that hotels may have to take extra steps to warn guests about “an open and obvious danger.”

 Royal Lahaina did not have an on-duty lifeguard, only a sign that said, “Warning: No Lifeguard on Duty,” according to the complaint.

A California travel agency must face a trial to determine whether it is liable for the near drowning of a woman who used a hotel pool despite a sign that alerted guests there was no lifeguard on duty, a federal judge ruled.

Song Meyong Hee is now “incapacitated” and “a vegetable,” after sinking in a Royal Lahaina Resort swimming pool and suffering severe hypoxia, according to the complaint filed by Song’s husband and children.

For more:  http://www.courthousenews.com/2011/12/06/42001.htm

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by | December 7, 2011 · 7:58 am

Hospitality Industry Employment Risks: "Americans With Disabilities Act" Amendment Has Broadened Definition Of "Disability"; "Employment-Practices Liability" Claims Expected To Rise Dramatically

“…As a result of the EEOC rulings, which broaden the definition of disability to include protections for employees with, for example, cancer, diabetes or epilepsy… the definition of disability under the law was “significantly expanded” by the ADAAA, and she also expects claims numbers to grow as a result.”

“…A person with diabetes…you must provide reasonable accommodations—a place to test blood sugar, a break to take medications and time to rest…”

“…It’s cheaper to purchase (the proper Employment-Practices Liability coverage] than to defend yourself against one of these claims…”

Steps taken by federal officials to broaden the definition of “disability” is putting pressure on employers—and insurers are forecasting an increase in employment-practices liability (EPLI) claims.

The Americans with Disabilities Act Amendments Act (ADAAA), which went into effect on Jan. 1, 2009, directed the U.S. Equal Employment Opportunity Commission (EEOC) to revise its regulations “to restore the intent and protections” of the original act, and to address what lawmakers felt was a too-narrow view taken by courts of the original ADA provisions.

For more:  http://www.propertycasualty360.com/2011/12/01/ada-amendments-broader-definition-likely-to-cause

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by | December 6, 2011 · 6:53 am

Hospitality Industry Guest Privacy Risks: New "Invasion Of Privacy" Lawsuit Filed Against Tennessee Hotel By ESPN Reporter Who Seeks $6 Million For "Negligence And Infliction Of Emotional Distress"

“…The lawsuit charges that Barrett called the Marriott and was told which room Andrews would be staying in and then rented the room next to her…”

The lawsuit accuses Marriott of negligence, infliction of emotional distress and invasion of privacy and seeks at least $2 million in damages for each of the claims. Barrett was accused of the same claims in addition to disclosure of private facts, and the lawsuit seeks $1 million for each claim against him.

ESPN reporter Erin Andrews filed a new lawsuit in Davidson County Circuit Court last week accusing the Nashville hotel where she was unknowingly videotaped in the nude in 2008 of invasion of privacy, negligence and infliction of emotional stress.

In addition to the West End Marriott Hotel, Andrews also named convicted perpetrator Michael Barrett in the lawsuit. Barrett, an Illinois resident, was sentenced to two and a half years in federal prison in 2010 for stalking Andrews as she traveled around the country to cover sporting events for ESPN and filming her in her hotel rooms.

For more:  http://www.tennessean.com/article/20111206/NEWS03/312060024/ESPN-s-Erin-Andrews-files-new-invasion-of-privacy-suit

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