What constitutes a good risk in the hospitality sector? Senior Underwriter Doreen Teoh, one of Canada’s top underwriters in the field, describes the best applications as those from accounts that are claims-free, originate from clients that are experienced in the industry, and that maintain a well-run operation. “I especially like to quote policies for companies that have not had any past suspensions or other violations,” says Teoh, “and strictly adhere to LCBO compliance policies.” Although she admits that past history is not a predictor of the future, an application from a company with no prior claims is obviously a stronger submission.
“Hospitality is a tough sector because there are so many exposures,” says John Barclay, president and CEO of South Western Group. Host liquor liability is one side of the equation that can have far-reaching implications if an establishment tends to overserve its customers. Even facilities that promote “smart serve” policies are often not enforcing these policies strongly enough. “The establishment’s receipts and analysis of liquor to food sales can often tell a vastly different story,” says Barclay.
Other exposures that require special consideration include risks from fires, breaking and entering, and even deep fat fryers. Companies that have had prior claims must demonstrate that they have upgraded their equipment and safety procedures and perhaps undergone additional training.
In submitting applications, brokers should be careful to complete the hospitality application fully for a faster turn-around and to eliminate a lot of back-and-forth activity. Teoh cautions brokers to be sure to include things like square footage of the dance floor, number of security personnel, length of time in operation, and the client’s past experience in the hospitality industry as well as their claims history. “We realize that fast service in quoting and binding policies can mean everything to a broker,” she says, “and that’s what we aim to provide. Depending on our workload, we can sometimes even provide a quote in less than an hour.”
On the claims end of things, SWG works with clients to speed the process by helping to complete paperwork and reaching out to claims adjusters to ensure prompt service. Says Barclay, “SWG staff is eager to build stronger relationships and lend support to brokers wherever we can.”