Mr. Dahm

Insurance

Valet Parking: Are You Driving Yourself into a Wall?

By Richard Dahm, Senior Risk Consultant, National Hospitality Division, Wells Fargo Insurance Services

Considered to be a luxury service to the hospitality industry, most hotels, restaurants, airports and even banquet halls, include the service of valet parking. Although this is a value-added service to your clientele, its ultimate costs and risks are a growing concern for the hotel or restaurant owner. While some establishments choose to employ their own staff as attendants, more are leaning toward contracting outside firms who use their own employees. Although outsourcing this risk does lessen some of the liability headaches, both in-house and outsourced services have the same everyday problems that may ultimately end back up on the establishment's doorstep. Such going concerns include; property damage to the valeted cars, theft, bodily injury to guests and pedestrians and damage to non-valeted vehicles. In this time, everything is more expensive; from the high price of cars to medical bills. No one can afford to make up the costs of carelessness, improper management or inadequate insurance coverage. If you're concerned with your valet services and are finding negative trends occurring more frequently, maybe its time to re-evaluate your valet program. The following are several indispensable guidelines to help you improve the quality of your valet service, ultimately reduce the claims frequency and cost and keep the goodwill of your customers.

Training

The average age of a valet attendant is between 19 and 25. Valet parking services tend to have high turnover and therefore look to the local college student body to fill their attendant positions. While there may not be a shortage of applicants, the driving experience of the typical college student is less than average. In order to improve the talent pool, you must be able to implement one of two practices, a training program or a better screening process. It is important to start with the basics:

Verification of valid license and driving history -It is fundamental to know that you are hiring validly licensed drivers. Second, do your drivers have a clean driving history? Employee driving records can tell you on how responsible your drivers are and what kind of history they may be applying to your business. Have the applicant apply for the job by supplying his/her driving record. The employer should review their attendant's current driving records at a minimum of annually and perhaps more frequently if there is high turnover.

Are your drivers experienced driving vehicles with manual transmissions?In the past it was common for drivers to know how to drive a manual shift transmission. Today, stick shifts are not as common except in higher valued sports cars. If the operator is not acquainted with high end vehicles such as Ferrari, Porsche, and Corvette, many of these sports cars not only have manual shift, but they are accompanied by large horse power. An inexperienced attendant could cause major damage to the vehicle as well as to other vehicles or people around them.

Are drivers given driver training and proficiency tests?Know what kind of driver you are hiring. All employees should be given a proficiency test to make certain they are skilled enough to handle multiple types of vehicles and in your environment. Whether it's operating in a parking garage or high traffic areas, your drivers must be able to handle a vehicle with skill and confidence. They should also know how to safely park a car. Many valet services back the cars into a parking space for easy recovery. Therefore, it is essential that parking skills be included into any proficiency test. New hires should not be thrown into the busiest time slots, but worked up to them.

Rules and Procedures

It is important to establish a handbook of rules and procedures for employees to follow. A handbook should be given to each employee and brief employee meetings should be held daily to remind employees about basic safety concerns. Examination of most accidents involves carelessness and can all boil down to the very simple fact that rules and procedures are not heavily enforced. Such reminders should include:

1 - Are valet attendants instructed to drive slowly?

Most facilities have a maximum speed for driving vehicles. Attendants should follow the same speed limits posted at the lot or facility.

2 - Are attendants required to wear properly identifiable and noticeable uniforms?

Attendant uniforms should be easily identifiable and able to be seen at night. This will reduce employee accidents as well as improve client recognition in daily operations. In this respect customers will be able to easily identify a legitimate employee who will properly secure the vehicle.

3 - Are employees instructed to position the driver's seat correctly to reach the pedals and to wear seat belts?

Too often attendants are in a rush to get clients' vehicles and don't feel the need to make proper seat and mirror adjustments. This is a leading cause of accidents in valet parking. It is desirable that drivers also wear seat belts in the course of driving and parking as this may also lessen your workers' compensation costs with the possible reduction of injuries.

4 - Are attendants familiar with all areas of the valet parking facilities?

Some parking facilities have very basic lots and others have multi-level garages or multiple lot locations. It is imperative to have a secure place to lock customers' keys at all times. It is also necessary to have a clear procedure to monitor and locate vehicles.

5 - Operational Awareness

Are traffic areas clearly marked and free from obstacles? Attendants should recognize a true layout or protocol for traffic directions. In larger lots or higher traffic lots, it is key to establish proper entry and exit patterns. Cones along with proper signage can alleviate directional impairment. Attendants are often required to drive customers' vehicles on public roads. Whenever this occurs, it increases the chances of pedestrian accidents.

6 - Is there adequate lighting in your parking facility?

Proper lighting is a central element to reducing collision damage. The parking areas must be clearly visible. Good lighting and layout can help to reduce accidents.

7 - Weather

Hazardous weather can lead to major problems. It is essential that management address the weather conditions by including additional safety procedures for rainy or snowy seasons. This suggestion will obviously apply to valet services that have facilities that are exposed to outside elements.

Insurance Coverage

Valet service can require two types of Insurance coverage; General Liability or Garage Liability (depending on your program and operations exposure) and Garagekeepers Liability. It is likely you will need both.

General Liability or Garage Liability will cover the insured against claims brought by third parties for bodily injury and/or property damage caused by an attendant, such as hitting a patron with a car in the course of valet parking or hitting another car that is not in your care, custody or control. Garagekeepers Liability provides physical damage coverage to the vehicles themselves that are in your care, custody or control.

Most General Liability policy forms extend bodily injury and property damage liability to valet parking operations depending on where the vehicles are being parked. It is essential that you discuss the parking exposures with your insurance broker to understand what limitations your General Liability form may contain and to review the locations where valet cars are parked, especially if it is away from your scheduled location(s). You may need to have locations endorsed (added) to your policy. In some cases, you may need to purchase a Garage Liability policy to cover third party liability.

Garagekeepers Liability has three different option levels for coverage triggers. They are Legal Liability, Direct Excess and Direct Primary. Premium pricing, goes from lower, higher, highest in the order they are shown. This is all physical damage coverage for your customers' cars. Garagekeepers Legal Liability only provides coverage if the customer can prove that the Insured's negligence caused the damages. Direct Excess coverage provides cover, regardless of fault, in excess of the vehicle owner's insurance coverage. The third option, Direct Primary, provides coverage, regardless of legal liability, on a primary basis. Legal Liability and Direct Excess coverage are usually going to involve the vehicle owner's insurance company. The Direct Primary option triggers without regard to the vehicle owner's insurance and may be the option you want to protect your goodwill with your customers.

Garagekeepers Liability requires the Insured to select a limit of coverage. There may be a per vehicle maximum limit and an aggregate limit for each claim or all claims. Be certain that your limits are in line with your actual exposure, especially if you are parking high valued vehicles and/or have a lot of cars in your custody. Review your coverage trigger and limits with your insurance broker.

If you're concerned with your valet services and are finding increased frequency in accidents or claims, it may be time to re-evaluate your valet program along with your risk consultant. If you are obtaining the services of an outside firm or insurance broker, you may want to re-evaluate their services along with others in efforts to pick the most qualified group. It is important to find someone that is familiar with your trade and has many years of experience in the hospitality industry. Ultimately it is your organizations dollar that will be responsible for the clients you serve. Therefore, make sure that you're getting the most out of your premium and not just the cheapest program. Service is a part of all programs. Service makes the difference to improving your business

Richard Dahm, Jr. is senior risk consultant for the National Hospitality Division of Wells Fargo Insurance Services, Clearwater, Florida. His expertise includes property, restaurant/hotel facilities, and risk management. He holds a BA in management from Eckerd College and an MBA from DeVry University. Richard is a member of the Florida Restaurant and Lodging Association. Mr. Dahm's knowledge, coupled with his professional staff of claims, safety, and marketing professionals enables him to provide hospitality executives with consultation that reduces insurance risks and premiums. Mr. Dahm can be contacted at 800-282-3343 Ext: 5436 or Richard.Dahm@wellsfargo.com Extended Bio...

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