Is Your Hotel or Restaurant Insurance Adequate? Twelve Tips to Get the Right Coverage & Reduce Risk

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

In the last several years, the dramatic rise of insurance costs has placed an excessive burden on hotel and restaurant owners. Fortunately, the forecast for the 2007 insurance market remains optimistic with more insurance companies willing to compete and many offering broader coverage terms. As new markets become available, industry analysts advise caution. They recommend hotel and restaurant owners re-examine their existing management programs and develop initiatives to reduce the overall cost of risk. The following outlines a series of twelve tips to help you re-examine your insurance program, its depth of coverage, and related risks.

Twelve Initiatives for Hotel & Restaurant Management:

1 - Find the Right Insurance Specialist

Today, most hospitality executives realize that it is essential to find an insurance broker that specializes in their industry, one who knows the market and can tailor a reliable insurance program to their needs. A talented broker specialist can identify the right insurance coverage to solve immediate risk issues and anticipate future complications, thus allowing owners to concentrate on what they do best -- managing and developing their business. In fact, several of the larger insurance brokerages offer an entire hospitality division with a full staff of risk management professionals and specialty services including loss trending analysis, safety engineering, worker's compensation claims management, and experience modification analysis.

2 - Insurance Company & Underwriter Expectations

Insurance companies generally want the same type of information about your business regardless of the type of establishment you own. Financial information is necessary, especially sales receipts showing the percentage of alcohol to food sales. In addition, it is helpful that an owner or corporation have a resume highlighting their prior successes in the industry. - -

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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.