This is an outline of a recent project,  involving a company based in Ontario.
Certain details have been altered to protect the identity of our client.

The Company

  • Southern Ontario Hotel Group
  • Annual Revenue – $75,000,000
  • Employees – 650
  • Upscale hotel chain with 9 locations
  • Various amenities include spas, pools, athletic facilities

The Project (brief outline only)

  • Audit Existing Insurance Policies
  • Review for errors, omissions and accuracy
  • Analyze coverages, definitions, conditions, terms and exclusions.
  • Provide explanation of existing scope of coverage.
  • Identify potential pitfalls, deficiencies and problems.
  • Recommendations on possible enhancements, additional coverages, coverages not required and retention levels.
  • Analysis of operations, assets and income exposures
  • Determination of Essential Insurance Needs
  • Review various contracts for potential liabilities
  • Preparation of Insurance Specifications, and information package
  • Administer broker selection process

The Details (sample elements from interim report)

  • Insurance premiums had escalated 250% in the past four years in spite of a satisfactory claims record with the same insurer.
  • Various coverages were underinsured, exposing the company to potential penalties, and erosion of .corporate assets, in the event of a claim.
  • The amounts of protection had not kept pace with recent acquisitions, expansion and increases in replacement cost.
  • Liability insurance limits were very low.
  • Inadequate Business Interruption values exposed the company to a potential 100% coinsurance penalty, in the event of a loss of business income.
  • Property insured values were significantly understated.
  • Discussions with the insurer determined that they did not understand the operation


The Results (a few examples)

  • Values were updated to avoid penalties.
  • Professional liability insurance was added to cover various guest services by professionals such as estheticians and massage therapists
  • Contracts with tenants and suppliers were amended.
  • Self Insured Limit was increased to realistic level
  • A broker was selected with a proven track record in the hospitality industry, strong references and solid insurer relationships.
  • Coverages were deleted where the potential for loss was low, or presented minimal exposure.
  • Various policy definitions were amended by the insurer to reflect the client’s needs, and coverages broadened to include services interruption and closure due to illness or on site tragedies.
  • All policies were amended to have expiration dates, concurrent with the fiscal period for ease of administration.

The Followup (The start of a well managed program)

  • A Risk Management Manual has been prepared for the client, to assist in providing better control of insurance details including records maintenance.
  • Regular meetings have been scheduled to maintain up to date awareness of the client’s operations and changes.
  • Periodic attendance in management and planning meetings has been arranged, so that risk management and insurance implications can become an integral part of the planning and management of the organization.