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.
- 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.