Hotels Navigate Loss-Of-Business Claims after Disasters

November 21, 2017
Hotel News Now

Media Coverage

Along with all the physical destruction natural disasters cause directly, they also create secondary effects that can drag out the overall impact of the event for weeks, months or even years.

Natural disasters can disrupt a hotel’s regular business operations long after they have passed, and hoteliers need to ensure they have sufficient coverage in their insurance policies to carry them through until normal business levels return.

Linda Kornfeld, vice chair of the insurance recovery group at Blank Rome, said she’s having two conversations with her hotel clients about what losses they have suffered and how her firm can best frame their claims for their insurance providers.

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Having contingent business-interruption coverage is important, Kornfeld said. A hotel operating in one state wouldn’t be physically affected by a disaster in another state, but if one of the hotel’s suppliers is in the affected area, that could create an interruption of business as well. Hoteliers should consider having protection broad enough that would insulate them from such problems with suppliers, she said.

“Most polices have some level of business-interruption coverage, especially in the hotel business,” she said. “The impact on profits, on business income, from natural disasters can be more significant than on the cost to fix physical damage. If an entity in the hospitality industry doesn’t have business-interruption coverage, it would be necessary to have going forward.”

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"Hotels Navigate Loss-Of-Business Claims after Disasters," by Bryan Wroten was published in Hotel News Now on November 21, 2017.