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Doreen
Pendgracs |
Business / Entrepreneurship Samples: INSURANCE RISK MANAGEMENT PROGRAMS SAVE HOTELIERS
MONEY -- Let's face it. Insurance is something none of us like paying for, but it's a necessary part of doing business. In an effort to keep insurance costs down and stay out of the courtroom, experienced hoteliers like Leo Ledohowski have taken a pro-active approach to the matter of insurance. Ledohowski and brother, Ron, who own seven hotel properties in Manitoba under the name of Hospitality Corporation Inc., have developed their own risk management program to help manage their insurance costs. "Maybe it was my teaching background that helped me see the value of risk management and how it would benefit our business," says Ledohowski. "About 12 years ago we undertook a risk management program to keep things in check at our properties. I think we're still the only hotel owners in the province with a conscious strategy to keep our insurance risks -- and costs -- under control." Hospitality Corporations's risk management program involves an integrated common sense/trial and error approach. "Regular maintenance includes things like having a sanding program in our parking lots and entrance ways that kicks in at the first sign of icy conditions, and keeping out waterslides in top shape -- complete with the proper signage. There's no doubt ... constant monitoring and maintenance are necessary to keep all our facilities at their best," says Ledohowski, who also said you have to know how to cut your losses. "We take quick action to resolve any errors in judgement we may have made. If we've made a mistake and installed a fancy ceramic tile that turns out to be a real slip and fall hazard, I won't hesitate to take a jack-hammer and rip it out. It doesn't matter what it costs," he said. "We've found that if you've taken due diligence in keeping your property safe, the courts will generally rule in your favour if there is an insurance claim." Ian MacPhee, accounts manager with AON Reed Stenhouse Inc., insurance brokers and risk consultants agrees with Ledohowski's pro-active approach to insurance. "Risk controls such as burglar, heat, fire and smoke alarms, installation of a sprinkler system, and regular maintenance of wiring, plumbing and kitchen equipment are important components to a risk management program for hoteliers," he said. MacPhee manages the group insurance program for the Manitoba Hotel Association. The group policy covers 170 of the roughly 325 hotels in the province and has been providing members with cost-effective comprehensive insurance coverage for the past 20 years. "The benefit of a group program is that it's able to stabilize premiums over the long haul. There may be some years during which we see more claims, but overall, the buying power of a group program results in fairly consistent premium levels," says MacPhee. The Toronto office of AON Reed Stenhouse offers a national program for hotel properties that are part of a chain such as the Days Inns.
MacPhee says that factors such as the
construction and location of the building can have a dramatic
effect on insurance rates. "A property built of concrete
blocks will have a much lower rate than one of wood frame.
As well, a building that is in an unprotected region and doesn't
have the benefit of police and fire service will have rates
significantly higher that one with a fire hydrant directly
in front of it." Larger properties with higher gross
annual sales will also have proportionately higher liability
premiums than smaller hotels because larger properties assumably
have more employees and more customers visiting their establishments. "Our members know that they can be held legally responsible if someone they've served is later injured or involved in a motor vehicle accident," says Jim Baker, president of the Manitoba Hotel Association (MHA). Baker says the MHA's training seminar for bar owners and serving personnel coupled with the province's designated driver program are two examples of a pro-active approach that seems to be effectively managing alcohol abuse in the province ... page 2.
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