Risk & Business Magazine Sterling Insurance Summer 2018 - Page 26

ARE YOU COVERED? Are You Covered? Policy Exclusions In Hospitality T he hospitality industry faces many unique risks and exposures to loss. Whether a hotel, resort, or a bed & breakfast, all of them have one thing in common: they need extensive Commercial General Liability and Commercial Umbrella policies that cover and mitigate each of their potential sources of risk. Ultimately, it will depend on what type of business is being conducted, but it is safe to assume that anything outside of “ordinary business operations” is going to require additional coverage. Children’s programs, pools, fertilizers/herbicides, snow removal, and banquet/meeting facilities are just some of the areas of loss to bear in mind. The first step for businesses in the hospitality industry should be to ensure their Commercial General Liability and Commercial Umbrella insurance protects them from the myriad of claims they may face. They can do this by reviewing their policy exclusions. Those exclusions could prove financially ruinous after any loss, and worse, many business owners don’t realize they exist until it’s too late to do anything about them. A quick review of the policy exclusions shown on the policy’s applicable forms page is a great first step. offering childcare, play areas, or child- centered activities absolutely must have coverage for specific claim issues such as Abuse and Molestation. Yet, all too often, this is excluded from their policies. • Another often-excluded issue in Commercial General Liability and Commercial Umbrella policies is Bodily Injury from fungi or bacteria. This could become a problem should people fall ill after being in a pool or hot tub. Most of the time, this is excluded from policies, so be sure to double-check all exclusions in a policy. • Legionnaires Disease contracted from heating, cooling, and dehumidifying equipment will not be covered without adding the proper endorsement modifying the policy’s pollution exclusion. The endorsement is readily available, but your insurance broker must request the modification. Here are a few quick examples, but they are by no means exhaustive: As you can see, these exclusions are not always immediately obvious, and they can sometimes feel as though they are coming out of left field. If there is one thing that business owners know, however, it’s that being prepared is always going to be better than the alternative. Could your company risk being caught unaware by one of these exclusions or by others that you simply haven’t thought of? • Hotels, resorts, amusement parks, restaurants, and other businesses Work with your insurance broker or insurance company to make sure these 26 BY: KEVIN SWEET STERLING INSURANCE GROUP exclusions are eliminated or modified in order to mitigate risk. An insurance company should be willing to work with you to either make policy amendments or remove the exclusions of concern. Too often, I see cases where policy exclusions exist unbeknownst to the policyholders. About 85 percent of the time, an insured will have at least one of the three aforementioned exclusions. Whether it’s Abuse and Molestation, or a complete exclusion for fungi or bacteria, or a total pollution exclusion—it’s not helpful regardless of the premium savings. When I point out these exclusions, people are surprised and sometimes even angered. Hopefully, before any loss occurs, they find these exclusions with the help of an insurance expert who knows the hospitality industry. If you read nothing else in your policy, please read the applicable forms page where the exclusions will be shown. With insurance, as with many preventative services, it can feel like a money grab at times. But it isn’t. Just like you would go to get regular checkups at a doctor before something bad happens with your health, you want to be prepared for potential liabilities before they become a serious issue for your business. An insurance company not willing to work