After a few years of setbacks due to the pandemic, the hospitality industry is thriving. Worldwide, the industry is expected to be worth a staggering $4.5 trillion by the end of 2022.
This is good news for all of your clients who work in the hospitality industry. With restrictions lifted, everyone is free to visit their favorite hotels, restaurants, and attractions once again.
More customers mean more revenue, but it also means more risks. As insurance producers, you know that your clients need the best possible insurance solutions to meet their needs.
When it comes to risk management, what should your hospitality clients be aware of? Let’s discuss seven of the most common safety risks and security hazards.
1. Common Safety Hazards
We’ll start with the obvious operational hazards, such as slips, trips, and falls. These risks aren’t unique to the world of hospitality, but the industry is especially prone to these types of incidents.
Food spills, wet floors, electrical wires, and steps all present opportunities for injuries. There’s also the risk of injuries associated with lifting and handling heavy items. Combine that with the hectic pace of kitchens, dining rooms, and dance floors, and it’s only a matter of time before a customer injures themselves.
Even when your clients do their best to keep everyone safe, accidents can happen at any time. That’s why it’s essential for every hospitality establishment to carry commercial liability insurance.
This can include many different types of coverage (which we’ll discuss more below), but it always features general liability coverage. Like other businesses, this is mandatory insurance for the hospitality industry.
2. Hazardous Chemicals
Cleanliness and sanitation have always been hot topics in the hospitality world, but especially so since COVID-19. Your clients’ efforts to keep everyone safe and remain compliant also expose workers (and customers) to an array of potential hazards.
Soaps, sanitizers, degreasers, oven cleaners, and floor cleaners are everyday products in the hospitality industry. If used incorrectly, any one of these chemicals can lead to:
- Burns
- Infections
- Skin irritation
- Allergic reactions
- Respiratory harm
Proper storage, signage, and usage are vital to protect workers and customers from possible harm. Employers must also be cognizant of proper training as well as provide personal protective equipment like gloves or goggles for their staff.
3. Property Damage
This category covers a wide array of potential situations. Theft, vandalism, fires, and floods are obvious hazards, but there may be some risks your clients haven’t yet considered.
For example, does the property host special events such as food festivals or concerts? If it’s a waterfront property, are there dock areas where watercraft could cause property damage?
Many business owners find out (too late) that their policy doesn’t cover certain situations. Their property insurance will pay to repair the building if there’s an office fire, but they may need a separate policy to replace the computers and other equipment.
4. Food Contamination
Even in the cleanest kitchens with the most cautious staff, the unexpected can still happen.
A power outage or equipment failure can spoil perishable items. A customer may fall ill due to food poisoning or a food allergy. The establishment may even have to close down for a period of time due to tainted food or illness.
5. Liquor Liability
Any business that serves alcoholic beverages adds an entire extra layer to its risk management. Even if they have well-trained staff with good intentions, a customer can still become intoxicated on their property.
This scenario opens the door for a whole slew of potential legal problems. The customer could injure themselves or someone else on the premises, or they could get unruly and damage the property. There’s the possibility of unknowingly serving underage customers.
There’s also the ever-present risk of an intoxicated individual getting behind the wheel. If a drunk driver gets into an accident after leaving a restaurant, bar, or hotel, the establishment could be held legally responsible.
6. Special Events
Many hospitality venues host special events such as weddings, corporate meetings, and live music performances. During holiday celebrations, your clients may host festivals, parades, fireworks displays, or other seasonal events.
Whether the event is private or public, there’s always the chance of something going wrong. A guest could injure themselves or someone else during the event.
Property damage is always a risk too, especially if there’s heavy equipment, pyrotechnics, or alcohol involved. Special events liability protects the entity that hosts the event — just in case things don’t go according to plan.
7. Traffic Accidents
Insurance producers also need to be aware of the potential dangers off their clients’ properties. Any business that uses vehicles for transportation, delivery, or other reasons needs commercial auto insurance.
This includes caterers, florists, food trucks, and restaurants that employ delivery drivers. It also includes large resorts, casinos, and hotels that offer shuttle services or rental vehicles for their customers.
The threat of a traffic accident (even at low speeds or in isolated areas) is always present. Make sure your clients have the insurance solutions they need to protect them against events that might occur off their property.
Insurance for the Hospitality Industry
The hospitality industry is full of potential dangers. Some risks, like a slip-and-fall incident, are obvious. Other risks may not even be on your client’s radar.
At Prime Insurance Company, we understand that no two businesses are alike. Every client faces different risks based on the size and nature of their business. Rather than a “one size fits all” solution, we write customized packages that address different sectors of the industry.
From general liability to active shooter coverage, we have the solutions your clients need. Click here to request a quote or give us a call at 800-257-5590.
Last updated8/23/22
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Authored by Rick J. Lindsey, CEO, President, and Chairman of Prime Insurance Company
Rick J. Lindsey hails from Salt Lake City, Utah. He began working in the mailroom of his father’s Salt Lake City insurance firm, getting his introduction to the business that became his lifelong career. Lindsey quickly rose through the ranks while working in nearly every imaginable insurance industry job. As an entrepreneur, specialty lines underwriter, claims specialist, risk manager, and a licensed surplus lines broker, Rick Lindsey is highly skilled in all levels of leadership and execution. As he progressed on his career path, Rick discovered an urgent need for insurers willing to write policies for high-risk individuals and businesses. He was frequently frustrated that he could not provide the liability protection these entities desperately needed to safeguard their assets. He also formed the belief that insurance companies acted too quickly to settle frivolous claims. Lindsey decided to try a different approach. He started an insurance company and became the newly formed entity’s CEO. This opportunity has enabled Rick to fill a void in the market and provide a valuable service to businesses, individuals, and insurance agents who write high-risk business. Prime Insurance also specializes in helping individuals and businesses who live a lifestyle or participate in activities that make them difficult for traditional carriers to insure. If you’ve been denied, non-renewed, or canceled coverage, don’t give up quite yet. Chances are Prime Insurance can help.
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