How to Find the Right Insurance Broker for Your Hotel Company

By Richard Dahm Senior Risk Consultant, National Hospitality Division, Wells Fargo Insurance Services | February 15, 2010

Purchasing business insurance in today's economy has grown to be a large ticket item on businesses' increasing budgets and diminishing bottom lines. As complicated as insurance coverage can be, the process of choosing a broker can make it even more difficult. With insurance rates drastically fluctuating, more businesses are reviewing their current policies and weighing all options - including whether to keep their current broker or look elsewhere. It is very easy for businesses to get lost in terminology and price comparisons when choosing a broker. Consequently, many end up questioning the value of their coverage for their premium dollar. In years past, package policies and mainstream markets provided more comprehensive coverage. Unfortunately this practice seems to be losing ground towards a much more line itemed cost. In essence, even if we are seeing reductions in cost the reality is that we are spending much more for diluted coverage.

Getting your money's worth does not stop with the insurance companies, but rather with whom you put your trust in, the broker. If you have any doubts, then your answer lies in changing your traditional review process and researching for the best broker available. The following are several essential guidelines to help you become a better informed buyer for selecting the right broker.

A Broker's Inexperience Can Cost You

Risks associated with specific trade needs are susceptible to magnification when businesses contract brokers not specializing in their particular industry. Clients are often surprised by the frequency with which they encounter errors and oversights in coverage made by inexperienced generalists. Such oversights often include written policies with inadequate or disproportionately higher limits, insufficient marketing to carriers, lacking in essential coverage and/or strategy, and coverage modification by the carrier that is overlooked by the broker.

Take Your Broker to Task

Your insurance broker should act as an intermediary between you and your insurance companies. Brokers use their in-depth knowledge of risks and the insurance market to find and arrange suitable insurance policies. Unlike insurance company agents, brokers are independent and can offer products from more than one insurer. This will help to insure that you get the best possible deal available.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.