Property – HospitalityLawyer.com

The Most Frequent Hospitality Claims

Allen Wolff — Tue, 25 Dec 2018 16:00:04 +0000

Property Claims
The most common types of hotel property claims are: general water damage, sprinkler water damage, hail, wind, and fire. These five causes account for two-thirds of hotel property claims. Fortunately, they are commonly covered by first party property insurance.

First party property coverage is for damage to a policyholder’s own property, not for damage caused to the property of others. First party property coverage comes in two basic types: Named Perils Policies and All-Risk Policies. First party property coverage policies are where most policy holders find their business interruption coverage.

Business interruption coverage typically covers physical damage at an insured location that results from a covered peril and causes business income loss. There are two types of business interruptions: Partial and Total. In the last 15 years, many more policies cover partial interruptions. These policies will pay for lost income (after offsets for cost avoidance) that would have been earned during the period of restoration. The period covered is until the premises are or should have been restored to operation. Also, a financial allowance is often available to hire an outside CPA to calculate the loss.

Guest Liability Claims
The most common types of hotel guest liability claims are: slips and falls, exposure or contact with something that injures, being struck by or against something. These three causes account for more than half of all hotel guest liability claims. Such claims are often covered by a comprehensive policy sold as Commercial General Liability (CGL) insurance.

Third party coverage in the form of CGL insurance is coverage for a policyholder’s liability to others. This coverage can pay for the cost of lawsuits brought against the policyholder. If a claim is potentially covered and not excluded by the policy, the insurance company will pay for a lawyer to defend the policyholder. If a claim is actually covered, the insurance company will also pay the policyholder’s liability after trial or settlement.

A CGL policy has a limit of liability. For a policyholder facing a claim, there are usually two limits that are relevant: 1) the “per occurrence” (sometimes “per claim”) limit; and 2) the“aggregate” limit. Note: defense costs are usually outside the limit of liability.

CGL policies typically require that the policyholder give prompt notice of a potentially covered claim and that the policyholder cooperate with the insurance company in its investigation of the claim and its defense of the policyholder. Insurance companies sometimes threaten to deny coverage if they do not get all the cooperation they want. But there are limits on the extent of the policy holder’s duty to cooperate: there is no duty to cooperate after a denial of coverage and a defense under a reservation of rights can limit the extent of the duty to cooperate. Policy holders should be mindful of privilege issues as well. CGL policies have exclusions from coverage that apply in certain circumstances.

Workers Compensation Claims
The most common type of workers compensation claims are: being struck by or against something, slips and falls, and manual materials handling. These three causes account for more than two-thirds of all workers comp claims. The insurance available for such claims is usually confined to workers compensation insurance. A policyholder can reduce workers comp claims with the following techniques: perform pre-employment checks/physicals; limit housekeepers to cleaning 15 rooms per day; require employees to use equipment and procedures that reduce injuries (mattress lifters, light vacuum cleaners, proper work shoes, cart load limits); implement are turn to work program.

Conclusion
The most common claims in the hospitality industry usually have corresponding insurance coverage that will soften the blow. Assess your risk and make sure you have the right coverage to manage it. If you have difficulties with an insurance company after a claim, seek advice and counsel about how to proceed.

About AndersonKill
Anderson Kill was founded in 1969 on the principles of integrity, excellence in the practice of law, and straightforward solutions to complex legal issues. The firm’s attorneys approach engagements aggressively, and have earned a reputation for combining corporate polish with pugnacity. Based in New York City, the firm also has offices in Philadelphia, PA, Stamford, CT, Washington, DC, Newark, NJ and Los Angeles, CA, but the attorneys travel around the country and around the world to handle all types of matters. Anderson Kill attorneys work together, leveraging creativity and legal and business acumen to deliver cost-effective resolutions to clients’ problems. Many of the firm’s professionals are recognized experts in their practice areas, leaders and active participants in professional associations, and are frequently invited to speak to business organizations.

When The Government Wants Your Property: Eminent Domain – How It Works & How To Be Prepared

Clint Schumacher — Tue, 17 Jul 2018 16:00:52 +0000

Eminent domain is the power of the government, or a private actor granted that power by the government, to acquire property for public use. We generally view this a necessary nuisance for a functioning society as the power is essential for the efficient development of necessary infrastructure. Eminent domain is commonly used to acquire the property necessary to build roads, electric lines, water lines, sewer lines, schools, oil and gas pipelines, and rail lines. However, taking one person’s private property for the benefit of the collective is a high price for citizenship. So, as a society, we have also agreed that, when private property is taken for the public good, society will pay just compensation, also called fair compensation, to the person whose property is being taken.

The source of the right to compensation bestowed to our citizens at the national level is the 5th Amendment to the U.S. Constitution which provides: “nor shall private property be taken for public use, without just compensation.” In Texas, we have similar language in our State Constitution. Article I, Section 17 of the Texas Constitution provides in pertinent part: “No person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made.” To determine “fair compensation” or “just compensation,” there is a simple formula (but complex to apply) – what was the property worth on the open market before the taking as compared to what it is worth on the open market after the taking.

When the Government Decides It Wants Your Property, What Happens?

If the government decides to acquire some part of your property for a public project, it is obligated to make you an offer for the property. To support the offer, the government must procure an independent appraisal that is shared with you. You are initially given thirty days to respond to the offer. If you are unable to come to terms with the government in that period of at least thirty days, the government must give you a “final offer” with another fifteen days to respond. If, in that period, you are still unable to come to terms with the government, the government can file a condemnation lawsuit.

Condemnation suits are civil cases and are typically filed in the county court in the county where the subject property is located. Upon a case being filed, the judge of the court will appoint three “special commissioners” to hear and decide the case. The Special Commissioners schedule a hearing to receive evidence from both the government and the property owner regarding the amount of compensation due. After the Special Commissioners render their award, the government can pay the amount of the award and, at that time, the government gets the right to take possession to the property they are acquiring.

Either the property owner or the government can appeal the award of the Special Commissioners. If either side appeals, the judge of the Court will set the case for a trial. Either side is entitled to a jury trial. If neither side wants a jury trial, it can be tried to the Court.

Important Valuation Issues in the Hospitality Industry

Loss of Parking: A government acquisition that causes a material loss of parking can greatly impact a property. A loss of parking that takes a property out of compliance with code can obviously be very detrimental. However, lost parking, even if it does not take a property out of code compliance, can still have a material impact on the value of the property.

Loss of Circulation/Loss of Fire Lane: A government acquisition may cause renovation of the remaining property such that circulation is lost or hampered or, worse yet, may take a property out of compliance with fire code requirements regarding on site fire lanes. Other onsite improvements may have to be altered to accommodate legally compliant fire lanes.

Denial or Obstruction of Access: A project can impede access on or off the property either temporarily (during the time of construction) or permanently. Loss of driveways or changes in the roadway leading to the property can impact the property’s value.

Interruption of Utilities: A less obvious, but significant, impact on operations are interruption of utilities. A project may cause electric lines, water lines, or sewer lines to be relocated. A property may lose utilities during a relocation. If utility relocation is necessary, it is important to have the work done at a time that minimally disrupts any business on the property.

How to Prepare for a Government Taking

Upon learning of a planned government taking, there are several action items that will help minimize impact and maximize compensation. First, find out as much as you can about the planned project and how it will impact the property. Second, if there are project design changes that will minimize harm to the property, meet with the government’s engineers and planners to see if such changes are feasible. Sometimes a small, relatively insignificant, project change can save very significant property damage. Third, consider whether there are property changes that can be made now that will maximize compensation later. Fourth, find qualified help. Not all appraisers or attorneys are expert in condemnation laws which can, at times, be illogical.