RISK CONTROL. Hotel Risk Management Guide. Risk Management Guide. Travelers Canada. Section I. Property protection FOR THE HOSPITALITY INDUSTRY

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1 Travelers Canada Risk Management Guide FOR THE HOSPITALITY INDUSTRY The Canadian Hotel industry is an important contributor to the economy of every Canadian province and territory. The industry, which is part of the Accommodation and Food Services sector and one of four core commodities comprising the tourism industry, generated more than $16 billion dollars in National Accommodation Revenue in 2011, according to the Hotel Association of Canada. In 2012, the industry held 8,486 properties and employed over 284,000 workers on a full-time, part-time or seasonal basis. Global tourism is projected to grow significantly to 1.8 billion travelers by As a result, hotel accommodations are expected to increase in demand as more international and domestic businesses and families travel to stay in their home away from home. Increase in competition and the sophistication of travelers have induced many hotels to provide options to serve a wide variety of customer budgets and preferences. In the midst of the increased demand and opportunity are increased challenges in customer safety and security risks. Slips, trips and falls, theft of personal and hotel items, safety related to personal grooming, pools and spas, valet and other parking, food and liquor services are among the many areas that can raise the potential for harm to patrons and loss of profit and reputation to the hotelier. Additionally, housekeeping, laundry and kitchen operations can present significant fire exposures. Theft, including credit card skimming by employees, has put greater emphasis on employee selection, and attacks on electronic data from domestic and international sources has put greater emphasis on electronic data management. An effective risk control program plays an important role in helping hoteliers provide a safe and secure environment for its customers. The ability to deliver a quality customer experience is critical to the hotelier s financial well-being and reputation. An effective risk control program should include not only measures and programs to address the safety and security of your customers, but also risk management measures for your property and daily operations. Business continuity planning also can help hotel owners and managers be prepared to respond to disasters and unforeseeable events (weather-related disasters, power outages, cyber attacks and critical equipment breakdown), which might otherwise interrupt or disrupt business operations. The ability to continuously deliver a quality customer experience is critical to the hotelier s competitiveness, financial well-being and reputation. This guide is designed to help address a number of hazards associated with hotel operations. For hotels with restaurant services, see Travelers Risk Control Restaurant Risk Management Guide. Section I. Property protection Property risk management plays an important role in prevention and protection strategies that address critical building systems and equipment, electrical safety, fire protection, and prevention of water intrusion, among other things. It also is important to guest experience, comfort and safety. QUICK LINKS Auto liability Business continuity Information/data management Property protection Public/general liability PAGE 1

2 Facility equipment and building systems Facility equipment, communication and electrical systems, and heating, ventilation and air conditioning (HVAC) systems are among the lifeline systems of a building s operation and health. Proper maintenance of HVAC and other building systems plays an important role in preventing fires and providing a comfortable and healthy environment to guests. Inspection and maintenance programs for facility equipment and building systems can help prevent breakdowns, malfunctions, outages and property loss. Inspection and maintenance of HVAC systems also are critical to helping prevent Legionnaire s Disease (bacteria growth in standing water) and carbon monoxide exposure (through heating vents). Use trained and qualified operators to inspect, test and maintain equipment, including refrigeration and HVAC systems. Inspect, clean, test and maintain equipment and components daily, in accordance with the manufacturers instructions. Daily attention can help identify potential causes of failure, including cracks, foreign objects, fatigue and wear. Verify that controls and safety devices are installed and tested according to the manufacturers requirements. Operate, inspect and maintain furnaces, chillers and refrigeration equipment in kitchens according to manufacturers and jurisdictional requirements to ensure safe operation and proper temperature and humidity. Inspect and service elevators and escalators regularly and maintain maintenance and repair documenation. Maintain operating log sheets for all equipment. Inspect and maintain roof surfaces and building system equipment situated on roofs. For electronic components, computers and communication systems, it also is important to install electrical surge protection to prevent damage. Fire detection, suppression and protection A leading cause of hotel fires is heat from powered equipment/appliances and electrical system malfunctions, such as those associated with HVAC systems. These fires can result in large, non-confined fires and can cause significant property damage. Other leading sources of large, non-confined fires include faulty electrical wiring, open flames and lint. Cooking fires, which are more frequent, tend to be small, confined within the cooking area and with limited damage. Fire suppression systems and detection devices play an important role in containing and minimizing the impact of fire in hotels. Many fires take place in locations without an automatic extinguishing system. Fire sprinkler systems are widely recognized as the most effective single method for suppressing the spread of fires in early stages, as well as helping reduce the potential for additional smoke and water damage. Compliance with life safety codes is also critical, given the high concentration of people in hotel quarters. Automatic and manual fire suppression systems Hotels should ensure their sprinkler systems are suitable for the type of construction and occupancy of the buildings and comply with national and provincial building and fire codes. The two most common reasons for automatic sprinkler system failures are lack of proper maintenance and a valve closure that prevents adequate water from entering the system. These failures can be prevented through practiced risk management programs. Have an approved sprinkler system with a central station alarm set-up in accordance with sprinkler and life safety codes, including NFPA 13 and building codes. Quick Response Extended Coverage (QREC) sprinklers can help provide full protection for a hotel room. A single extended coverage horizontal sidewall head requires less sprinkler piping and can be retrofitted with little interruption to operations. Provide appropriate portable fire extinguishers (including Class K for grease fires) throughout the center and in the kitchen areas. Check them once per month and have them serviced annually by a certified extinguisher technician. Train all employees on the proper use of fire suppression systems, including the use of manual releases. Keep storage at least 18 inches (45.7 cm) away from sprinkler heads. Test sprinkler systems annually. Inspect and service the fire extinguishing system every six months. This should be done by a trained person. Fire and smoke detection and alarm devices Fire detection and alarm devices both automatic and manual are essential to the safety of your employees and guests, as well as your property. Approved fire and smoke detection devices (dependent on occupancy load) should be connected to a central station alarm company for monitoring. PAGE 2

3 Smoke and heat detectors should be strategically located in guest rooms and throughout the facility. HVAC systems should be equipped with warning detectors to allow system shut down and prevention of smoke spread. Contract with a reliable contractor to establish a testing and maintenance program for fire detection and alarm devices, so they are properly maintained. Fire prevention Faulty, frayed or malfunctioning electrical wiring and equipment, clothes dryers and flammable and combustible liquids also are sources of fire. See our Restaurant Risk Management Guide on the Risk Control Restaurant web page for more information on managing fire risks associated with restaurants. Bathroom ceiling exhaust fans Bathroom ceiling exhaust fans can pose a fire hazard. Over time, the fans can build up lint. Under certain conditions (such as a locked rotor), the motor can overheat and ignite the lint and nearby building components. These fires generally occur in older bathroom exhaust fan installations. Inspect, clean and maintain bathroom ceiling exhaust fans routinely, at least once a month. Electrical fires Have a competent electrical inspection agency carry out a full inspection and test of the electrical system of all areas at intervals not to exceed five years. Have a competent contractor inspect refrigeration and air conditioning twice a year. Replace cracked or broken switch or receptacle plates and equipment that sparks or smokes. Do not use extension cords or other temporary wiring. Use grounded plugs or outlets. Do not overload electrical outlets. Do not allow dust or grease to build up on electrical equipment, sockets and wiring. Use only Underwriter Laboratories ( UL/C ) listed electrical appliances or CSA (Canadian Standards Association) certification. Entertainment/pyrotechnics The use of pyrotechnics in indoor venues has been implicated in major fires causing significant damage to commercial buildings. Pyrotechnics should not be used indoors. When used outdoors, the exposure should be carefully assessed, certificates of insurance should be in place, fire protection measures should be readily available and weather, such as dry conditions or wind, should be considered before the use of any pyrotechnic display. Hotel management and third parties must ensure compliance with all national and local codes for the use of pyrotechnics. See Certificates of insurance under the General Liability section later in this guide. Flammable/combustible/explosive hazards Flammable and combustible chemicals are a major fire hazard. Locate storage/supply areas away from potential ignition sources. Use specially manufactured or treated flame-retardant fabrics in bedspreads, drapes and carpeting. Practice good housekeeping. Remove trash routinely throughout the day to a fire-resistant area. Don t allow clutter to accumulate. Properly dispose of soiled rags daily. Store flammable/combustible liquid containers, including cleaners and solvents, in the manufacturers original containers or in puncture-resistant, tightly sealed containers in a well-ventilated area away from other supplies or source of spark, ignition or heat. Use UL/Clisted cabinets. Store all pool chemicals (such as hypochlorites and bromine) in a locked, dry, well-ventilated and fire-rated enclosure at a distance from the main building. Hypochlorites present an explosive hazard. Trained employees must follow manufacturers instructions when chlorinating pools. Enforce a no-smoking indoor policy/by-laws. Provide a safe outdoor smoke area along with safe containers for cigarette butts. Laundry facilities Each year, hundreds of hotel fires start in laundry rooms. Lint is a significant fire hazard. The laundry facility should have a preventive maintenance program on laundry equipment, particularly for clothes dryers and vents. Soiled cleaning cloths also can be a fire hazard. Some oils and solvents may not be removed from the cloth completely during normal laundering. When left in the dryer or in a pile, certain soiled fabric may generate additional heat on its own, making the fabric susceptible to spontaneous combustion. PAGE 3

4 Clean lint from clothes dryers after each use. Clean/vacuum under and around the dryer routinely, where dust and debris can collect. Vacuum dryer vents/hoses monthly and document. Use color-coded dedicated cloths for cleaning up oils/fats/grease. Place soiled cloths in a separate, closed metal container until ready for laundering. Never start or leave a dryer running unattended. Frequently check the dryer while it is operating. Run a cool down cycle on the dryer after cloths are dry. Remove cloths immediately. Do not allow to sit in a pile. Do not use dryer sheets. They can clog dryer vent filter holes over time and create an ignition source. Ensure dryer and vents are properly installed. Use metal ducts only. Water damage In addition to fire, water can be a major contributor to damage and loss to property, equipment, furniture and other furnishings. Pipes and plumbing that may be subject to cold areas should be well insulated to avoid pipes freezing and bursting. Additionally, pipes and plumbing under and around toilets, sinks, dishwashers and washing machines should be routinely inspected to address any leaks. Gutters, downpipes and drains should be cleaned at least twice a year as part of a maintenance program to prevent water ingress. Proper placement of downspouts away from the base of the building and grading soil away from the foundation of the building can help deflect water from the base of your facility. In the event of severe storms, inspect the facility for potential water intrusion. Any standing water should be properly removed/cleaned up immediately, to avoid water damage and/or mold. Section II. Public liability/general safety The safety, welfare and experience of patrons are a priority for hoteliers. Preventing slips, trips and falls, room theft, and pest infestation; establishing an effective evacuation plan in the event of a fire or other emergency; and offering quality rooms, services and recreational facilities all play an important role in the welfare of patrons and the reputation and success of the hotelier. Contractual risk transfer third-party providers Upscale hotels may offer a number of services, including personal grooming/beauty salons, day care centers, retail, restaurants and recreational facilities. Where third parties provide the services, they should be licensed and carry liability insurance. The hotel should have a contractual risk transfer program in place and update it annually. Such a program should include selection criteria to ensure only reputable suppliers and vendors are available to customers. Certicates of Insurance or proof of insurance should be obtained from the vendors, suppliers, and providers. Hotels should be named as an Additional Insured on third party policies to help protect the hotel against a claim of defect or failure related to a third party service. Child care facilities Hotels that provide day care facilities should have a diligent hiring and selection program in place to adequately protect children from abuse by staff. The facilities should be licensed and well supervised by competent personnel. All centers should be equipped to provide emergency first aid by trained personnel. The property should be inspected and programs should be in place to help prevent or reduce hazards, including electrical hazards, unstable furniture and play equipment, lead ingestion, and transmission of communicable diseases. Cribs should conform to product safety standards. If the day care is run by a third party, the hotel should obtain appropriate Certificates of Insurance. See additional under Contractual risk transfer third party providers in this section. Housekeeping and maintenance Hotel management should have maintenance staff routinely inspect for hazards. Balconies should be inspected by a qualified engineer to review structural integrity. Indoor and outdoor furniture should be inspected routinely to confirm their stability and structural integrity. Housekeeping should report damage to furniture immediately, and hazards should be immediately addressed. Where prompt repair or replacement is delayed, guests should be warned of the hazards. If the hotel provides cots or cribs, this furniture must be inspected before and after each use. Bed bugs Housekeeping plays an important role in the control of pest infestation. Bed bugs can cause itching and inflammation of the skin. If not treated properly, infection can set in. Daily attention to good housekeeping and inspections can help prevent infestation. A thorough inspection is required to assess the magnitude of the infestation. Because of the long life cycle of bed bugs, a pest control professional normally is needed to help rid an infestation. Health Canada and the Public Health Agency of Canada work with local and municipal officials to provide information on preventing or eliminating bug bed infestations. The latest information is available on their websites. Proper disposal of infested mattresses and upholstery also is critical. Fire prevention Good housekeeping also plays an important role in reducing the fire load from boxes, paper, dry goods, trash and other debris and clutter in the event of a fire. Reducing the fire load PAGE 4

5 also can help reduce the fire spread. Maintenance should engage in proper disposal of dry goods, trash and clutter throughout the day. Fungi/bacteria Swimming pools, saunas and whirlpools pose fungi and bacteria exposures if not properly maintained. These facilities must be cleaned and maintained to help ensure against disease and bacterial infections, such as Staphylococcal skin infection. HVAC systems also must be maintained to ensure proper ventilation, operation and the prevention of standing water and bacteria growth (Legionella) that could potentially result in the risk of Legionnaire s disease. Life safety Tragic fires, explosions, collapses of dance floors and other disasters remind us of the importance of life safety especially for hotels where large numbers of people have congregated as travelers or attendees at wedding receptions, banquets, conferences or other special events. The importance of hotel building construction, occupancy features and occupancy limits, proper exits and lighting, sprinkler or other protection systems, event management and emergency evacuation procedures, are critical to help provide life safety protection to employees, patrons and the public at large. Post evacuation instructions in guest rooms and other gathering areas throughout the hotel. Adhere to occupancy limits, including for dance halls. Have an emergency response plan, including designated staff to help evacuate persons needing assistance. Program elevators to return to and remain at the lobby level as soon as an alarm sounds. Procedures also should be in place to respond to elevator entrapment during a power blackout or elevator malfunction. Post signs at elevators instructing guests to use marked stairwells or call for assistance. Comunicate the plan and location of exits to all employees, contractors, subcontractors, vendors and guests on your premises. Provide adequate egress and number of exits, lighting, including emergency lighting, and exit signage, based on the size and occupancy of the facility. Provide sufficiently wide egress aisles, in accordance with building and fire codes and based on occupant load. Keep aisles, stairs, exits and paths to exits free of clutter, furniture and debris. Conduct drills and drill audits to make sure everyone knows what to do in an emergency. Provide a common meeting place outdoors and some distance from the building. Have a trained crowd control manager(s) to help with control and exiting in the event of an emergency. For special events, electricians should inspect all electrical feeds and outlets to make sure they are in good working order and safely located to avoid trips and falls. Third-party hosts of special events should hold a special event insurance policy naming the hotel as an additional insured. Contracts should include hold harmless or indemnification provisions in favor of the hotel. See Contractual risk transfer earlier in this section for additional information. Liquor/alcohol risk management Alcohol consumption can present a risk and liability to hotels. Adopt and use a Hotel Alcohol Policy, especially with respect to patron intoxication. Train employees on your policy. Offer a designated driver program in which non-drinking customers receive non-alcoholic beverages free of charge. Verify the age of all youthful customers. Require a photo ID. When in doubt, ask for additional ID. Require liquor liability insurance for all hall renters serving liquor. See the Contractual risk transfer section above for additional information. Premises security and crime Hotel management must take measures to protect guests from assaults and theft by perpetrators. In addition to outside perpetrators, dishonest employees may be involved in the theft of property owned by guests and the hotel. Front desk operations should have safety controls to ensure against theft or customer credit card abuse. Start your loss prevention program with a good hiring program. Make sure you check background references to the extent allowed by law. Install security security cameras, closed circuit security systems, a security patrol. Where security cameras are in use, post signs so indicating. Do not post signs that give a misleading impression of security that is nonexistent or nonoperational. Some hotels use reciprocal agreements with nearby hotels to share safety or security personnel. Keep fire doors closed at all times. PAGE 5

6 Establish a relationship with local police to understand crime in your area. Make guests aware of known crime so they can take additional caution to protect themselves against theft and assault. Keep premises around the building and in parking lots well lit at all times. Many losses occur in poorly secured and ill-lit parking areas, pathways and corridors. Trim landscaping, keeping windows, doorways and sidewalks clear of shrubs/trees/bushes. Change card key locks with the arrival of each new guest and replace immediately if reported lost. Side and back door entry, including exit and entries to the trash receptacles should require a key or code for reentry. Encourage the use of hotel safety lock boxes for valuables. Lock facilities during off-hours to reduce theft of valuables or potential harm to off hour employees. Be aware of applicable statutes or regulations. Recreation: fitness/exercise and swimming pools Many hotels offer exercise rooms and swimming pools. While attractive amenities to guests, they can pose risks for hoteliers. Hotels must take reasonable care for the safety of guests who use these facilities, whether or not they are supervised. Major risks for exercise rooms include slips and falls, pulled muscles and back strain, and heart attacks. Swimming pools also pose slip and fall hazards. See the slip and fall management below for additional information. Additional risks associated with swimming pools include drowning, disease and infection from inadequate chlorination or filtration, and electrocution or shock from improperly grounded pumps. All exercise equipment should be inspected daily, documented and maintained in good condition. Instructions for proper use should be posted. Warning signs also should be posted regarding unsupervised and improper use. A risk transfer program should be in place if the hotel makes arrangements for guests to use local health clubs. Swimming pools must meet local health and building code requirements. The pool, equipment and surrounding area should be inspected and maintained daily. Inspections and maintenance should be documented. Outdoor pools should be self-gated and have child-proof locks. Pool rules should be posted prominently and address diving activities whether or not there is a diving board. Pool depth markings must be visible. Lighting and electrical outlets must be properly grounded. Swimmers, particularly young children, can become entrapped by pool or spa drains, including in wading pools, due to the suction of the circulating pumps. This entrapment can result in severe injuries and death. Public pools and spas should be equipped with with anti-entrapment devices or systems. Hypochlorites used in swimming pools present an explosive hazard. Pool chemicals should be stored in a dry, wellventilated enclosure at a distance from the main building. Trained employees must follow manufacturers instructions when handling hypochlorites and chlorinating pools. Emergency telephones should be available both in the fitness facilities and pool areas with instructions on who to call in the event of an emergency. Slip and fall management Slip, trip and fall accidents are a common cause of injury to guests. Slippery floors, loose or worn floor coverings, steps, floorboards, uneven surfaces between carpeting and flooring, and clutter or other obstacles in the path of patrons are major sources for these accidents. Additional factors contributing to falls can include defective chairs and tables, poorly lit areas and lack of handrails on staircases. Customers who have consumed alcoholic beverages and elderly patrons are said to be particularly prone to injuries. Loss control considerations include, but are not limited to: Indoors Keep floors, including aisles and exits, clean, dry and free of clutter, water, oil or grease. Provide slip-resistant floor covering materials and surface finishes. Replace tiles or carpets that are missing or not firmly in place. Avoid any uneven transitions in walking surfaces. Use wet floor signs, and mop spills immediately. Maintain restrooms in a safe, dry, sanitary condition. Keep electrical cords out of aisles, walkways and away from the operator s footpath around equipment. Keep stairways and landings clean, clear of equipment and equipped with handrails and non-slip treads. Keep sidewalks and parking areas clear of ice and snow. Provide adequate lighting where people walk, including in stairwells. PAGE 6

7 Mark glass doors and door sidelights so glass is noticeable. Regularly check tables, chairs, booths, stools and counters for broken parts, protruding nails, slivers, and rough edges. Make needed repairs or replacements immediately. Schedule major cleaning during off hours. Outdoors Keep pathways, walkways, ramps and steps free of clutter. Keep loading dock surfaces and dock plates in good condition. Provide adequate lighting at loading docks, service entrances, delivery areas and in the parking lot. Keep parking lots free of oil slicks, snow and ice. Repair potholes immediately. Paint speed bumps, drains, maintenance covers, posts, ramps and curbs with a non-slip, high-contrast paint to alert pedestrians and drivers of their presence. Ensure exterior stairs are in good condition and slip resistant. Monitor play areas and keep them fenced and wellilluminated for night use. Schedule regular inspections of play areas to detect possible hazardous conditions. Keep good records of repairs. Remove from service any unstable chairs/tables. Ensure safe practices in the setting up of tents and other temporary structures. Follow manufacturer s instructions. Section III. Auto liability Hotels providing guest transportation have the potential risk of auto accidents. Vehicle accidents can injure employees and the public and result in property damage. Employees who drive their own vehicles (company non-owned vehicles) in the scope of their work or drive a customer s car as part of a valet program put your company at risk. Vehicles should be entrusted to drivers with good driving records. Auto/van safety management An effective driver safety program includes, among other things, hiring criteria policies and procedures that include motor vehicle checks, driver safety training, a vehicle maintenance program, and proper certificates of insurance where third parties provide driver services. The program should address both vehicles owned by the hotel and nonowned vehicles used for company-related business. Loss considerations include, but are not limited to: Implement policies for a driver selection and hiring procedure for company drivers, including those who drive shuttles or use their own cars in the scope of their work. Provide defensive driver training to all new hires before operating a vehicle on hotel business. Implement policies for a routine vehicle inspection and maintenance program managed by a designated garage. This includes inspection of non-owned company vehicles used by employees in the scope of work. Include a cell phone/mobile device policy for drivers. Employees should pull over to a safe location to retrieve messages, make or return calls, text message or use tablets. Have an accident reporting and investigation procedure. Equip glove compartments with an accident form that can be completed on the spot to record accident facts. If you provide shuttle service, make sure the driver is qualified and trained to operate a shuttle or 15- passenger van. Non-owned auto exposures The following guidelines are suggested for employees who drive their own vehicles (non-owned) for your business: Anyone using a personal vehicle for company business must be on an approved driver list. These employees must observe the same policies governing the use of company-owned vehicles. Review the motor vehicle records (MVRs) of these drivers to make sure they are good drivers. The driver must provide a valid driver s license for a file copy and a certificate of insurance that does not exclude business use. Instruct drivers to undertake routine basic vehicle inspections to help ensure safe operations. Follow up with them to confirm this is taking place. Valet parking services Hotels may operate valet services. Valets have an important responsibility in operating patron vehicles safely to help prevent accidents, injury or even vehicle theft. Use MVR checks for selection of valet staff. Make sure valets understand your key control program to help prevent loss of auto keys or vehicle theft. Keys should be secured in a locked, attended box. PAGE 7

8 Valets should note existing damage on the guest s portion of the valet ticket before taking the vehicle from the guest to help reduce a claim for existing damage. Consider having the guest sign the ticket when damage is noted. Monitor the valet area with closed-circuit television. If you subcontract valet services, evaluate the subcontractor using the same standards as for your own valet staff. Obtain certificates of insurance with your company named as an additional insured. Have your lawyer review all contracts to ensure you are not assuming your subcontractor s liability. See Contractual risk transfer in the Public Liability section for additional information. Section IV. Information/data management In a recent one-year period, 86 percent of large Canadian organizations, according to Public Safety Canada, suffered a cyber attack, putting companies at risk for loss of intellectual property and confidential customer information. With many guests making hotel reservations and final payment of services through online transactions, electronic data security is critical. Electronic transactions can put customers at risk of identity theft or fraud. The Canadian Council of Better Business Bureaus estimates that identity theft costs Canadian consumers and businesses an estimated $2 billion annually. The Royal Canadian Mounted Police Commercial Crime Branch estimates that Canadian identity fraud losses total between $10 billion and $30 billion annually. To help protect against cyber fraud and cyber crime, the Canadian government makes it illegal to possess another person s identity information. Businesses and industry are encouraged to adopt policies and technology to confront evolving cyber threats. The Canadian Cyber Incident Response Centre provides advice to businesses on how and what to protect their businesses against on their web site. Payment card fraud is the most commonly reported data breach. Hotels need to take steps to protect customers from identity theft and fraud in accepting credit and debit card payments. In Canada, compliance with PCI Security Standards is critical in the payment card industry. PCI Security Standards Counsel, the Payment Card Industry organization, has developed a set of best practice data security standards to help provide better information/data management and protection of their computer networks as a result of concerns and data breaches related to customer payment information. Credit card skimming by employees is also a growing concern and can contribute to fraud. Skimming is when an employee uses a customer credit card or credit card information for his or her own purpose. Employee theft and credit card skimming underscores the importance of employee hiring practices. Loss control considerations include, but are not limited to: Inspect and service computers regularly. Ensure transactional devices undergo regular upgrades and comply with PCI data security standards. Train staff on the importance of protecting both customer and restaurant data. Mark and log all electronic equipment with an identification tracking number. Contract with a service that supports continuous computer operations, in the event of a loss of data processing equipment. Use an employee selection process that includes background checks. Theft, including credit card "skimming," has put greater emphasis on employee selection and computer data management. Cyber or data breaches can affect your financial stability, as well as your reputation. Fraud should be reported to the Canadian Anti-Fraud Centre (CAFC) by phone at or info@antifraudcentre.ca or on the CAFC website at antifraudcentre.ca/english/home.html. Section V. Business continuity Each year, businesses are at risk from potential natural and man-made disasters. These disasters can include severe weather, fire, power and energy disruptions, cyber attacks, interruptions in communications and transportation, and breakdown in critical equipment, among other things. Market competition demands that companies be prepared to respond quickly to these events to reduce interruption to their business and continuously deliver products and services to satisfy their customers. Hotels are particularly vulnerable to interruptions in daily operations and downtime for any critical equipment. Equipment failure, especially where the hotel operates a restaurant, affects sales, inventory management, supply replenishment and integrity of stored perishable goods. A Business Continuity Plan (BCP) is a proactive plan to help companies ensure the continuous delivery of critical services and products to customers in the event of a disruption or interruption. Public Safety Canada characterizes a BCP as measures and arrangements to help a company recover its facility, data and assets, including the identification of personnel, resources, information, equipment, and financial allocations to deal with emergencies. PAGE 8

9 Contingency planning A contingency plan includes, but is not limited to: Equipment contingency plan Identify alternate source suppliers, including sources for spare parts for critical equipment (motors, refrigeration equipment, HVAC). Pre-arrange service contracts for quick turnaround in the event of a breakdown or critical component failure. technology, competition and concerns for public safety. The smart hotelkeeper can help turn the challenges and risks into savings and profits by making safety a priority and instituting an effective loss control/risk management program. For more information about Travelers Canada, visit our website at travelerscanada.ca, contact your Risk Control Consultant or Ask-Risk-Control- Canada@travelers.com. Identify temporary third-party cold storage solutions for restaurant inventory. Information technology/data management Protect electronic data through backup processes. Store valuable documents off premises. Provide a process for safe shut down of equipment. Ensure transactional devices undergo regular upgrades and comply with PCI data security standards. Train staff on the importance of protecting both customer and restaurant data. Closing comment The hotel industry is the fifth largest employer in Canada. Hotelkeepers are constantly searching for the right balance between guest satisfaction and profitability. The lifeblood and profitability of the industry depend on its ability to provide quality and cost-effective services to guests while keeping rooms and facilities full and reservations flowing. Demand and consumer expectations have continued to expand with the evolution of a global marketplace and the increased development of a world population desiring additional conveniences. Hospitality companies can meet the challenges and risks of the market and running a business by having strategies to address consumer trends, economic conditions, travelerscanada.ca Travelers Canada. Suite 300, P.O. Box 6, 20 Queen St. West, Toronto, Ontario M5H 3R3 The information provided in this document is intended for use as a guideline and is not intended as, nor does it constitute, legal or professional advice. St. Paul Fire and Marine Insurance Company and Travelers Insurance Company of Canada and their subsidiaries and affiliates (collectively Travelers Canada ) do not warrant that adherence to, or compliance with, any recommendations, best practices, checklists, or guidelines will result in a particular outcome. In no event will Travelers Canada be liable in tort or in contract to anyone who has access to or uses this information. Travelers Canada does not warrant that the information in this document constitutes a complete and finite list of each and every item or procedure related to the topics or issues referenced herein. Furthermore, federal, provincial or local laws, regulations, standards or codes may change from time to time and the reader should always refer to the most current requirements. This material does not amend, or otherwise affect, the provisions or coverages of any insurance policy or bond issued by Travelers Canada, nor is it a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions and any applicable law The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries. A0522RMG-CA St. Paul Fire and Marine Insurance Company and Travelers Insurance Company of Canada are the Canadian licensed insurers known as Travelers Canada. PAGE 9