While the World Cup brings opportunities to the local hospitality and tourism industries, there are additional and unusual risks that brokers need to convey to their clients so that cover meets world standards.
“It is up to brokers to point out potential additional risks associated with an intense event such as the World Cup where the united passion and excitement of visitors may present unfamiliar types of risks to the hospitality & tourism industries,” says Johan Claassens, marketing manager of VEA Risk Consultants, underwriting managers and hospitality, tourism and wildlife insurance specialists, underwritten by Etana Insurance.
“Our VEA team, with our combined 80 years experience, was at the recent Tourism Indaba held in Durban. Hospitality & tourism professionals came from the entire world and it was the busiest and best South Africa has ever seen. It made us realise that our hospitality clients in South Africa need extra attention regarding this first-of-its-kind event to ensure their cover lives up to the demands that may be made of it. The job of insurance professionals is give businesses an objective view and ensure that nothing is overlooked during June and July and beyond where clean-up, for instance, could be an overlooked cost factor for those in the front line.”
Risk Exposures
Claassens says VEA Risk Consultants has found that a hospitality facility is often too close and familiar with the running of their operation under ‘normal conditions’ to consider the increased risk exposures that comes with an event like World Cup, such as:
(a) Asset Management
Congestions and delays are the least of the challenges facing businesses. Theft, Malicious Damage to Property, Fire Risks, Act of Wild Animals Damage to gardens, water features and ornaments are just some of the potential risks.
Public utilities: Telecommunications, electricity, water, gas, sewerage and waste disposals can affect the day to day operation of businesses and need specific cover.
Infrastructure: Roads, parking areas, bridges, entrance gates, lighting, signage and perimeter fencing, tend to be forgotten when the assets of business are being insured.
Clean-up: The financial implications of clearance and cleaning costs, demolition, debris removal and property protection costs after a destructive event cannot be overlooked.
Seasonal increases on stock: Expenditure on stock (wet and dry) on amenities and increased overall outlay are often overlooked.
(b) Financial Management
Fraud, misuse of credit cards, internet fraud, bilking, loss of profits and revenue.
Additional increased cost of working if an unforeseen event causes you to lower your rack rate to attract tour brokers and operators to regenerate you turnover. There is a further point of concern should the point of focus no longer be there - Loss of tourist attraction. Murder, Suicide, infectious / contagious diseases and wild animal attacks should be a point where extra care and planning is given.
(c) People Management
Using untrained or unskilled temporary staff to accommodate the higher occupancy during this time poses a huge risk for your business.
These include: Front office, kitchen, maintenance and cleaning staff.
The safety of visitors and staff needs to be a priority. Specific risks, be it wild animals, criminal elements, fire and adverse weather conditions or various liability exposures, need special attention and planning from top management down to ground level.
The duty of care is not just a buzz word, but a reality that allows no short cuts.
(d) Risk Management
Proper Risk Management should be the corner stone of any hospitality or tourism entity at any time. During the soccer world cup, a businesses Risk Management plan should be enhanced and in forced to cater for worst case scenarios.
Make sure indemnity forms are updated to meet the world standards.
Have a broad disaster management and rehearsed action plan in force for various risk scenarios.
If you have access to an Emergency Medical Intervention or evacuation assistance call centre, make sure your staff is properly informed on the procedures, emergency contact numbers and the client’s full medical history.
This is not the time to cut back on your Risk Management budget, but rather increase attention to this vital area.
“Medical Intervention and Evacuation backup is an example of essential cover hospitality & tourism professionals need and our VEA Assist 24 Hour Emergency Call Centre was recently involved in the successful evacuation of an elephant attack victim from one of our neighbouring countries. The person concerned is now in a stable condition at Millpark Hospital. The medical emergency could spring from a snake bite or someone falling down a flight of stairs, wooden decks, furniture, probably more easily than an elephant attack.
“If a traveller experiences an unexpected event such as this the host needs to be able to spring into efficient action and that’s what brokers need to convey to their clients so they are protected against all risks. Right now brokers need to redo risk evaluations to be sure.”
Source : FA NEWS
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