Since the hospitality industry has been exposed to the challenges of dealing with a global pandemic, there is a strong emphasis on risks in the industry and how to manage them. Businesses in this industry include hotels, bars, restaurants and travel or lodging businesses, and there are hospitality insurance policies to address the unique risks presented by the different environments and practices. General precautions against a contagious virus aren’t the only steps these organizations need to take to safeguard their employees, clients and the business itself from a number of risks.
How Do You Manage Risk in Hospitality Industry?
When considering how to manage the risks encountered in the hospitality industry, there must be a basic understanding of the risks that are present. Some liabilities are more common than others, though there are several key areas that are drawing attention as being serious concerns.
The personal safety and security of guests on your property is crucial to your daily operations, but these are also serious concerns for your staff members. Protection from things like slips and falls or other injuries can come from safety audits and increased vigilance or employee training. Any accident that occurs on your property can increase your insurance costs and complaints from customers can impact your business reputation.
People expect their privacy to be maintained, particularly in the area of payment data and credit card usage. While the industry doesn’t set the standard for how to enforce this privacy, the Payment Cards Industry has established a standard for compliance that protects a guest’s privacy.
The transactions that occur in the hospitality industry deal with more than customer financial data. Many of the platforms used for bookings track specific patterns in consumer behaviors, while also creating databases of information with personal preferences, residences, payment information and email addresses. There is an assumption that this information is being held securely, but the increased sophistication of cybercriminals makes cyber transactions and security a critical risk area.
How Important Is Risk Management in the Business Practice of Hotels and Restaurants?
The problem of ignoring risks and failing to create a strong risk management program is multifaceted. An increase in claims and complaints will wreak havoc on the cost of your insurance premiums, leading to financial concerns for the company. Equally important is the toll that negative incidents will have on employee morale and an organization’s reputation. It is so easy for disgruntled team members or consumers to post their experiences across social media or other review platforms. Reputational risk has a direct impact on a company’s financial health.
How Can Risk Management Be Addressed?
To fully account for the risks present in your organization, speak with a hospitality insurance provider. This is the start of a good management program, and their insight can help you formulate other action steps.
About The Hilb Group
Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.