Hospitality risks have had a growing problem with indoor air quality issues for some time. The main drivers for coverage have included mold and Legionella, but viruses have also become more of a consideration. We have seen eight figure claims for mold-related cleanup and business interruption in recent years, and the industry has taken notice.
In addition to these exposures, hospitality accounts run the same risks as other fixed properties: unknown contaminants on site, contamination from neighboring properties impacting theirs, leaks from fuel tanks, and chlorine-related claims from swimming pools and hot tubs. There have also been a number of legionella fatalities at beach houses over the last five years, illustrating the need for coverage.
While most of these examples relate to site specific issues, the coverage can be provided to property management firms as well. Coverage for hospitality risks is often based on Site Pollution Liability for the insureds, and occasionally Contractors Pollution Liability for management firms or other vendors.
Site Pollution Liability currently costs as little as $3,000, with many limit options and available coverage enhancements. Learn more.
Claims scenarios for hotels:
A plaintiff brought a suit against the defendant hotel, alleging that the hotel was negligent in failing to properly maintain the hotel and in permitting bacteria to exist, thrive, and come into contact with hotel guests, as well as failing to warn the guests and keep them from a contaminated fountain. The settlement amount was over $2.2M.
A hotel guest woke up sick while staying in a Maryland hotel and immediately smelled ammonia in the room. He notified the hotel staff and a maintenance worker declared that the hotel room’s minibar was leaking an ammonia-containing refrigerant. Although the inhalation injury resolved within a week, his cough persisted and he was diagnosed with reactive airway dysfunction syndrome. He sued the hotel for damages and the settlement amount totaled $557,000.
A Virginia hotel was sued when a guest contracted Legionnaire’s disease from exposure to legionella in the hotel’s pool and hot tub. The plaintiff suffered diminished lung function and spent several days on a ventilator in the critical care unit and intensive care unit. The hotel is accused of negligence and failing to properly upkeep the hotel’s pool and hot tub. The status of the lawsuit is pending.
A hotel with a golf course periodically disposed of spent chemicals for many years. The landfill that accepted the chemicals subsequently was named a Superfund site, and the hotel was named a potentially responsible party (PRP) for this non-owned disposal site, resulting in contribution costs and legal expenses.
During re-fueling, the supply line for an above-ground diesel storage tank at a hotel backup generator failed. Diesel fuel spilled onto the ground, contaminating soil. The diesel also ran into a nearby storm sewer drain and discharged to a stream nearby. Emergency response and cleanup were required to address the diesel.
Do you have a hotel or hospitality risk you’d like to discuss? Contact us.