Category Archives: Business Interruption Insurance

Hospitality Industry Insurance Update: “Business Interruption Coverage More Important Than Ever to Cyber Policies” (Video)


Click image to play video

London-based MGA, CFC Underwriting, has brought a new cyber product to market for large companies that goes beyond the traditional cyber product, says Graeme Newman, director of marketing for the company. In this video with, Newman discusses how the increased knowledge of cyber risks has led large companies to demand a more complete product that includes business interruption coverage and how CFC’s coverage addresses these exposures.

For more:

Leave a comment

Filed under Business Interruption Insurance, Hotel Industry, Insurance, Management And Ownership, Risk Management

Hospitality Industry Risk Update: “Methamphetamine Labs Pose Growing Problem, Expense for Hotel Owners”

“…The ingredients for meth and their byproducts, including ammonia, hydrochloric acid gas, lithium, sulfuric acid and pseudoephedrine,Meth Labs carry a plethora of possible side effects depending on the length of exposure….The size of most hotel rooms and the self-contained air-handling systems in them work in favor for decontamination crews. Since each room has its own heating and air-conditioning unit, the chances of the vapors getting into the rest of the building are slim…”

Gone are the days when making meth on the go was confined to low-end hotel rooms. The drug’s cooks are now finding their ways into hotels that any family might choose for road trips or weekends at various lake communities in the area.

“It’s not just happening in low-level hotels or strip hotels. It’s starting to happen in middle-class hotels,” said Joe Clark, operations manager for water and special projects at Protechs, a Fort Wayne company that does meth lab decontamination.

For more:




Leave a comment

Filed under Business Interruption Insurance, Crime, Guest Issues, Hotel Restaurant, Liability, Management And Ownership

Hospitality Industry Insurance Update: “Insurance Recovery for Business Interruption & Slowdown”

“…When claims arise, insurance companies will often look for ways to deny coverage or diminish their exposure to the loss. After charging you premiums based on the entirety of your business operations, these insurance companies should not be so quick to deny coverage to you on the grounds that Image you merely suffered a slowdown or partial interruption. If your insurance company is not fully cooperating, you should engage the services of an insurance recovery attorney who can assist you in getting the insurance company to honor its obligations under the policy…”

What happens when a hotel suffers property damage, whether by natural disaster or man-made accident, and is forced to close some or all of its rooms, amenities or services? It is important to understand how insurance can protect you from the resulting financial loss. In addition to potential recovery for property damage from your property/casualty policy, you may be able to recover lost revenue from your business interruption coverage. If your operations are disrupted, whether completely or partially, the language of your policy will determine if, and for how long, your insurance company will cover such loss.

For more:

Leave a comment

Filed under Business Interruption Insurance, Insurance, Management And Ownership

Hospitality Industry Risk Solutions: “2014 Hospitality Insurance & Loss Prevention Summit” On February 10 Presented By Petra Risk Solutions

Hospitality Insurance & Loss Prevention Summit Feb 10 2014 Petra Risk Solutions2014-HLC-Brochure-12-13-20131

Leave a comment

December 20, 2013 · 6:45 am

“Hospitality Lawyer” January-February 2013 Online Issue Features “Insurance Coverage For Food Service Industry Losses And Business Interruption”

2013 Hospitality Lawyer Jan Feb cover

Click on “Hospitality Lawyer” to view online issue

Leave a comment

Filed under Business Interruption Insurance, Insurance, Labor Issues, Liability, Magazines, Management And Ownership, Risk Management

Hospitality Industry Property Risks: West Virginia Restaurant Fire Caused By “Malfunction Of Freezer Compressor Unit”; Court Rules Owners May Not Seek Damages To Rebuild Business

After an investigation, the cause of the fire was found to have been a malfunction of the compressor unit and/or power cord…the plaintiffs claim the freezer was not safe for its intended use and also made claims of Restaurant Firedefective design, breach of implied warranty and negligence.

Porker’s made claims for destroyed property and lost business during restoration, but Goodwin’s Dec. 7 ruling concerned three types of other damages requested. They were the cost to build a new Porker’s, lost franchise and royalties fees and the cost of preparing the franchise agreement…Goodwin wrote Porker’s was harmed by the fire but not destroyed, and the insurance payouts were designed to get business resumed. The company requested $105,935 to rebuild in its lawsuit.

After being told it could not seek damages to rebuild itself, Porker’s Bar-B-Q settled its lawsuit against General Electric and Wal-Mart on the eve of trial. The lawsuit claimed they were responsible for property damages from a fire caused by a freezer GE made and Wal-Mart sold. It was filed in 2011 by Jack Bruer and Pam Napier, the owners of Jack and Pam’s who operated Porker’s, and the settlement was entered 10 days after U.S. District Judge Joseph Goodwin granted the defendants’ motion for summary judgment.

The plaintiffs claimed a General Electric freezer bought three years earlier at a Sam’s Club store caught fire and destroyed the business premises of Porker’s, located in Cross Lanes, on Aug. 19, 2009.

Despite insurance company payouts, Porker’s has been out of operation since the fire. During its years of operation, Porker’s never turned a profit, Goodwin wrote.

“The defendants rightfully point out that the plaintiffs stated in their deposition testimony that Porker’s restaurant closed not because of the fire but because the landlord refused to renew their lease,” Goodwin wrote.

Bruer planned to go back to business after repairs were completed, but they never got the chance. The plaintiffs claim the fire was still the proximate cause of the restaurant because it led to the breakdown in the relationship between them and the landlord.

Goodwin found that a reasonable jury could not agree with that argument.

For more:

Leave a comment

Filed under Business Interruption Insurance, Claims, Fire, Insurance, Maintenance, Management And Ownership

Hospitality Industry Property Risks: Massachusetts Hotel Roof Detaches During Storm Causing Water Damage

“…about 25 percent of the roof had become separated, and he said it is a possibility that more could become detached as the storm progresses…”

Earlier this evening, high winds damaged the membrane roof of the DoubleTree Hilton Hotel in Middleton and Danvers. Some of the roof started to separate, and the hotel is experiencing water damage as a result.

The Fire Dept. has notified the Middleton building inspector and electrical inspector, as well as the Danvers electrical inspector of the damage.

A few hotel guests staying on the recently renovated 8th floor were moved because of the water damage.

“The hotel staff is working to mitigate any water problems inside the rooms but as far as the actual roof repair that cannot be undertaken until the storm is over,” said Twiss, who said it would be too dangerous at this time.

Leave a comment

Filed under Business Interruption Insurance, Insurance, Maintenance, Management And Ownership, Risk Management

Hospitality Industry Property Risks: Texas Restaurant Rebuilds After Electrical Fire Causes More Than $40,000 In Damage; Insurance Policy Covers Employee Payroll

“…a fire struck the backside of the building. It is still undetermined as to what exactly caused the one-alarm fire, which left approximately $40,000 in electrical damage…thanks to the preservation of its original pits and an insurance policy that has kept their employees on the payroll since the incident… it will feel as if Hutchins BBQ never closed…”

At first, a hopeful Tim believed the restaurant would be up and running in a couple of weeks. But with more planning and red tape to navigate than originally expected, he and his father, Roy, recovering a business from fire entailed much more than he anticipated.

The fire originated in the rear of the building and destroyed its back wall and pit room, which housed two wood-burning rotisserie pits, a trademark of the family namesake.

“It was devastating,,” Roy said. “We’ve put in 14 restaurants since 1975, and this is the first fire we’ve ever had.”

With the damages being more expensive than he originally thought, Tim believes the worst is behind them, and said he and his father are resting easier now that they can see the progress taking shape.

“A lot of times with a lot of restaurants, this could put you under,” Tim said.  “Thankfully, this is something I’ve been able to do.”

The restaurant, which has been at that location since 1991, will look very similar to way it was before the fire, except for a completely new pit room constructed of steel and cement, no wood, Roy said.

For more:

Leave a comment

Filed under Business Interruption Insurance, Claims, Fire, Insurance, Labor Issues, Management And Ownership, Risk Management

Hospitality Industry Property Risks: Rhode Island Hotel That Suffered “Extensive Damage” From River Flooding In 2010 Reopens After Insurance “Largely Covers Reconstruction”

“…The hotel’s lobby, front desk, restaurant, meeting rooms, guest rooms and information technology equipment were badly damaged, and the facility, which had celebrated its grand opening in September 2008, was forced to close…”

“…The (reconstruction) cost was largely covered by insurance… The chain had hoped to reopen its Rhode Island location within a year but was delayed by in part by a business restructuring…”

NYLO Providence/Warwick has undergone extensive renovations on the first floor, which filled with four feet of water after the nearby Pawtuxet River breached its banks in March 2010. Michael Mueller, chief executive officer of the Texas-based NYLO Hotels chain, would not say Wednesday how much was spent on reconstruction. Susan Shaw, the new general manager, said the 163-room hotel will open with between 35 and 40 employees, down from 60 at the time of the flood. It will add employees and should reach full capacity by early next year, she said.

During a recent fire inspection test, in which the emergency lighting system was activated, Shaw said it happened to be raining — prompting an unpleasant flashback.

For more:

1 Comment

Filed under Business Interruption Insurance, Insurance, Liability, Management And Ownership

Hospitality Industry Business Risk Management: Hotel Owners Must Have “Business Interruption Insurance” In Place To Protect Property From Disasters And Unforeseen Events

A regular commercial property insurance policy covers only the physical damage to your business. What about the profits which could have been earned during this period? How to pay rent, employees’ salaries and other important payments while your business is being rebuilt? This would definitely result in substantial financial loss.

Business interruption insurance (also known as business income coverage) helps businesses in situations like this. Many businesses without the business income coverage, shut down their business operations after their business is completely shuttered due to some unforeseen event. It covers the loss of income and helps a business return to the financial position as it was in prior to the disaster.

Hence, a business in hospitality industry should understand the importance of business interruption insurance and should go for this insurance. Critical aspects of business interruption insurance Business owners from hospitality industry should be aware of some of the critical aspects of business interruption insurance. Here, we will take a look at some critical aspects of hotel business interruption coverage and understand why it is very useful for businesses in hospitality sector.

 Business interruption period:  The business interruption period is the length of period for which the benefits are payable under an insurance policy. This period is the most critical part of quantifying the business interruption loss. It covers a business from loss of income for a specified period till the damaged business property is repaired or reopened. Some hotels being aware of the losses that may persist even after repairs are done; opt for “extended period of indemnity”. As it may take some time for the hotel to regain bookings and rebuild market share.

Loss of rooms revenues:   The business in the hospitality or the lodging industry may suffer financial performance as two of its main functions, occupancy percentage and average daily rate (ADR) may get affected. In simpler terms, a hotel damaged by a hurricane or fire or stuck in a deep local recession will not be able to generate any revenues because of closed rooms, especially in hotels and lodges. Business interruption insurance compensates you for lost income due to loss of rooms. It covers the profits you would have earned, based on your financial records.

Other lost revenues: Revenues from food and beverage, conferences, golf, spa, etc., can constitute a significant portion of a hotel’s income. When a business is interrupted, not only revenues through rooms are affected, some or all of these sources of income are typically interrupted. The business interruption insurance covers all the profits that would have been earned.

Ordinary payroll: Even if the business activities are temporarily stalled, operating expenses, and other costs such as rent, electricity bill, taxes, interest payable on bank loans, payroll costs etc., cannot be ignored. The business still needs to retain some employees such as accountants, front office executives etc. The business owner needs to pay salaries to them. In this kind of situations business interruption insurance is very helpful as ordinary payroll coverage is a common endorsement in many policies.

Extra expenses:  Business interruption policies generally allow an insured hotel to claim extra expenses incurred during the period of indemnity. It reimburses for reasonable expenses that allow the business to continue operation while the property is being rebuilt. Some policies also cover the extra costs required for moving the business to a different (temporary) location.

Business interruption insurance is one of the most important insurance policies that help in minimizing the adverse consequences of some unwanted events for the businesses in the hospitality industry. A well-thought out risk strategy by hotel owners or operators can make a significant difference at the most crucial times.

For more:

1 Comment

Filed under Business Interruption Insurance, Insurance, Liability, Maintenance, Management And Ownership, Risk Management