Risk Management in the Hospitality Industry

While every business owner faces a certain number of risks, the hospitality industry seems to face a fairly large amount. The key to keeping your hospitality-based business running smoothly is taking some initiative to manage these risks. At Cross Insurance, we assist business owners in the hospitality industry and have put together this article that outlines some of the major risks and offer some tips on how to mitigate your exposure.

The Possibility of Fire Presents A Significant Property Risk

Businesses in the hospitality industry face a large level of property risk. There are multiple ignition sources in hotels and restaurants. Not to mention the fact that much of the contents are highly combustible. To reduce this risk, ensure that all smoke and fire alarm systems are functioning and meet National Fire Prevention Association (NFPA) requirements.

Slips, Trips And Falls in Your Hospitality Business

The risk of injury on premises is very high in the hospitality industry. Due to the high number of guests that go through your doors each day, it is essential to minimize this exposure by taking certain precautions.

It is essential to implement safety codes in hazardous areas such as stairways, elevators, railings, and floor coverings. Make sure that all exits are clearly marked, and be sure to have back up lighting systems in place in the event of power outages.

Serving Liquor Increases the Risk of Liability

Many businesses within the hospitality industry sell alcohol. You could be held liable if someone becomes overly intoxicated and gets into an altercation or is involved in car accident while behind the wheel upon leaving your establishment.

Employees who are serving alcohol should be trained to know when a customer has consumed too much and know what to do to prevent excessive drinking. If you sell or service alcohol, Liquor Liability coverage should be part of your insurance portfolio. You should also make sure that you know and are compliant with all applicable federal, state and local laws and ordinances regarding the sale and/or service of alcohol.

Liability Risks for Valet or Shuttle Service

If your hotel or restaurant has a valet service, you increase your exposure to automotive liability. The risk becomes even higher if you offer transportation services to and from airports or other venues.

To lower the risk of Automotive Liability, restrict driving to qualified employees. If you are hiring for a position that includes these types of responsibilities, be sure to review their Motor Vehicle Records as part of the interview process. When outsourcing automotive services, be sure to transfer the risk to the independent contractor providing the services for you in a written contract.

Using Credit Cards in the Hospitality Industry

With most consumers using credit cards to pay for hospitality related products or services, the risk of exposure is very high. Whether it is a customer paying with a credit card, maintaining a database that includes personal information for a loyalty club, or booking a reservation with a credit card number, there are many opportunities for a data breach to occur. Lower your risk by staying on top of security protocols and updating your systems frequently.

Be consistent with employee training so they are aware of current scams and can help detect fraudulent credit card use. Talk to your local insurance agent about Cyber Liability or Data Breach coverage.

Take A Proactive Approach To The Threat Of Legionella Disease

Occurring naturally in the environment, legionella can sometimes be found in water systems. It can also enter a plumbing system during construction or repair. Additionally, any mist that is produced by legionella-contaminated water or ice can be aspirated into the lungs by susceptible individuals. In the hospitality industry, shower heads, decorative fountains, spas, pools, faucet aerators and cooling towers all become a source for potential exposure.

Consult with indoor air quality professionals to develop best practices and procedures that help to control the presence of Legionella and protect the health of your guests.

Questions?

Our agents have extensive experience and knowledge of the hospitality industry. We would love the opportunity to speak with you about your coverage options. If you would like a review of your insurance or if you have any about your current coverage, please don’t hesitate to reach out to one of our offices.