Obtaining insurance coverage in the hospitality sector has recently been a challenge, but there are some best practices that hoteliers can follow to get what they need to mitigate risk, sources said.

Speaking on a Hotel Optimization panel titled “Insurance, Lawsuits and Risk Management,” Mike Marshall, president and CEO of Marshall Hotels & Resorts, said “finding an insurer to write hospitality right now is very difficult.”

Marshall Hotels & Resorts went through a renewal process in November, he said, going through 25 insurance carriers. Only two or three of them were willing to give quotes. Ultimately, his company was able to secure an insurance program that wasn’t “through the roof on cost.”

“We felt very lucky … it’s not an insignificant cost increase, but about a 24% increase. We heard from a lot of other people they were looking at 40%, 50%, 60% increases,” he said. “The insurance industry has really folded up on the hospitality industry right now.”

Part of that has to do with insurers being hesitant around uncertainties, he added.

Jackie Collins, senior director and vice president of real estate and hospitality practice at Arthur J. Gallagher, an insurance brokerage and risk management services firm, said hotel companies are taking a conservative approach on renewals.

With COVID-19, there’s a number of hotels being repurposed for sheltering the homeless or becoming a medical facility, which carriers are cautious of, she said.

To go through the renewal process, Marshall said his team needed to show all the policies and procedures that each of the hotels in his portfolio had in place. His team gathered all the best practices that the American Hotel & Lodging Association formulated as well as the brands themselves and put those in writing to share with the insurance companies.

Marshall said there were still some things that he wished he’d gotten out of the coverage, but insurance companies “still are not going to underwrite a pandemic situation.”

Sherry Orel, president of Bureau Veritas Group, a company specialized in testing, inspection and certification, said several hotels gathered all the best practices and created new protocols, but the one thing she’s heard from clients is they’ve been able to leverage the concept of a “true third-party audit to come in and really evaluate whether you’re walking the walk and talking the talk.”

“In general, globally, about 70% of our audits come back with some level of non-conformance identified at the local level,” she said. “Typically, they’re not major, but they’re just enough for us to be able to go back and close some of these gaps.”

She believes having a third-party performance audit allows properties to be able to say they’ve gone that extra mile to verify that processes have been professionally reviewed.

Marshall said one of the most important things hotels can do to manage risk is having everything in writing. Then, make sure each staff member is aware of those policies and procedures. He said these things should be documented in an emergency manual.

“Make sure you have someone on staff that is following through with everything that you have in writing. If you don’t have policies and procedures in place that you can fall back on if you do get a lawsuit … you’re sunk,” he said.

Collins said when hoteliers are selecting an insurance broker, it’s vital they have a team that can provide loss-control resources that are specific to the hotel industry. Having that ensures hotels have the proper assistance with training protocols.

“It’s also important to have an insurance company that will work alongside you and your broker as a partner that can also provide you with those risk-management and loss-prevention techniques,” she said. “That’s something that should be included in your [insurance] program, and not an additional charge. Your carrier and broker should be able to help you with those things.”

Orel said her company has also executed a mystery shopping campaign for a Preferred Hotels & Resorts property in Boston that earned Bureau Veritas’ SafeGuard Hygiene Excellence and Safety Label six months ago.

“They wanted to see how they were doing six months later. That was an effort that they took upon themselves to make sure they’re policing themselves,” she said.

Marshall said it's important to be “training the trainer” and keeping it as lighthearted as much as possible to prevent pandemic fatigue for team members. That includes giving both physical and mental breaks.

“[Employees] are in the worst parts of the shutdowns, we had such a skeleton staff that was working nonstop. There is a tremendous amount of fatigue,” he said. “What we try to do as a company is, we would send in some task-force people to try to lessen the load.”

Orel said a lot of business are understaffed right now, and employees are being asked to do more than they’ve previously handled. Companies must assure their staff that expectations of more work with fewer people isn’t permanent.

“Whenever there’s this perceived light at the end of the tunnel with anything, and the tunnel keeps getting farther and farther away, psychologically, there’s the fatigue,” she said.

However, she noted that once vaccines become widespread, it’s important for businesses not to let up completely on this elevated effort with cleanliness and safety. Instead, shift the language and reward staff for the elevated levels of service and attention to detail. She said this can help with employee retention as well as guest satisfaction.