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Mr. Bolger

Insurance

Bed Bugs Can Be Found Anywhere: Is Your Hotel Protected?

By Christopher Bolger, Senior Risk Manager, Venture Insurance Programs

When a family checked into a venerable New York City hotel a few years ago, they didn't expect to encounter bed bugs. But even this hotel, whose rooms start upwards of $300 a night, wasn't immune to the pests.

The family complained to management about bed bug bites during their stay and continued getting bitten even after management moved them to a suite. The family maintained in their subsequent lawsuit against the hotel that they inadvertently brought bed bugs home with them in their luggage, and they had to vacate their home for six weeks while the pests were exterminated.

Many bed bug lawsuits are settled for undisclosed sums and don't make headlines. But the combination of economic and non-economic damages can result in five- and six-figure settlement amounts.

Bed bugs (Cimex lectularius) feed on humans and warm-blooded animals and are spread by travelers. The U.S. Environmental Protection Agency (EPA) attributes the resurgence of bed bugs over the last decade to increased domestic and international travel, lack of knowledge about how to prevent infestations and ineffective pest control practices due in part to bed bugs' increased resistance to pesticides.

Bed bugs are not known to transmit disease but are considered a "public health pest" by the U.S. Environmental Protection Agency (EPA) and Centers for Disease Control and Prevention (CDC). Their bites raise itchy welts that are painful but not dangerous, according to the agencies, although some people do have allergic reactions to the bites.

However, a persistent belief about bed bugs is that they thrive only in dirty conditions. This is false. "Bed bugs are not attracted to dirt and grime; they are attracted to warmth, blood and carbon dioxide," says the EPA.

This means no hotel is truly exempt from a bed bug infestation or the resulting liability, no matter how high-end and reputable. Hotel guests around the country are reporting being bitten by bed bugs and are filing claims seeking compensation for insect bites and ruined hotel stays. And, while lawsuits bring plenty of unwanted attention to the hotels, the Internet can turn a guest's complaint about bed bugs on a travel website into a viral public relations nightmare.

Claims Alleged

The cost of defending against bed bug claims can be the most expensive part of dealing with a bed bug infestation. The most common claims brought by hotel guests include negligence, nuisance, fraud and breach of implied warranty of habitability.

While only eight states have laws that specifically address bed bug infestations in hotels- Alabama, California, Kansas, Minnesota, Nevada, Ohio, South Dakota and West Virginia-most states have specific regulations requiring that properties with multiple dwelling units be fit for human habitation.

Hotel guests who say they were bitten by bed bugs can sue hotel owners and operators for medical expenses; pain and suffering stemming from bed bug bites; and property damage, including the cost of ridding clothes and luggage of the insects. Some attorneys who handle bed bug cases also pursue costs for cosmetic surgery as a result of scarring or infection, emotional distress, post-traumatic stress and compensation for lost income.

Accompanying the increase in bed bug infestations is the rise of Internet-based resources like The Bed Bug Registry (www.bedbugregistry.com), which collects travelers' and renters' reports about bed bug encounters in North America. Accusations are posted even though they are not independently verified. The ease and speed with which travelers can both uncover a hotel's bed bug history and report their own experiences with bed bugs means hotels must take a proactive approach to prevent and respond to bed bug infestations.

There's no way to eliminate the threat of bed bugs completely, but a comprehensive staff training program to reduce the likelihood of infestations and a remediation plan in the event bed bugs are discovered will help reduce your hotel's liability.

Training Staff

Bed bugs are typically brought into a hotel in guests' luggage and pose an ongoing threat for hotels. The CDC notes bed bugs are adept at hiding in the seams and folds of luggage, folded clothing and bedding.

Housekeeping staff must be trained to identify a bed bug by appearance and behavior; inspect a room for bed bugs; properly clean a room; properly launder bedding and towels; and clean other cloth features of the room where bed bugs may hide, including drapes. Staff should also be provided with the proper tools, including flashlights to inspect dark areas such as closets and under beds, according to information on the prevention and control of bed bugs in hotels from the University of Minnesota.

All bed bug-related procedures should be documented in written policies and copies of these policies provided to employees. Because bed bugs are a continuous potential problem, all housekeeping staff should be trained upon hiring, with an annual refresher course thereafter.

The finding of even a single bed bug by a guest or staff member should trigger response procedures including those to capture and identify the insect; isolate, treat or properly dispose of items that may be infested; and move guests and their non-infested belongings to another room, says the University of Minnesota.

Hotel management should also consider providing clear plastic tubs or bags so employees can store their personal belongings while at work and reduce the risk of bringing bed bugs to or from their homes.

Further, housekeeping and guest service staff should be trained to handle guest complaints about bed bugs. Public relations staff should have a damage control plan in place to respond to media inquiries.

Remediation Concerns

Bed bugs won't go away without intervention so the hotel must have a pest management service vetted and on call. The EPA has evaluated and approved more than 300 products in seven classes of pesticides for use against bed bugs, some of which can only be used by trained professionals.

However, killing bed bugs with extreme heat has become increasingly popular due to its effectiveness, the reluctance to use chemicals in living areas and the belief that bed bugs have become resistant to some chemicals.

Heat treatment poses its own risks, however. Review with pest management professionals the temperature used to kill bed bugs and the impact it could have on the room and its contents. Pest management should provide a prep sheet that lists the items that must be removed from the room being treated.

Heat can also warp or melt linoleum and other surfaces. When in doubt about how a surface will respond to the heat treatment, ask the pest management professionals to first test a patch of the surface in question.

Using a temperature setting below 155 degrees Fahrenheit is recommended because that's the temperature at which most sprinkler systems are activated. Some pest management services use dry ice to ensure the sprinkler system doesn't go off. Either way, it's a good idea to confirm the activation temperature of the hotel's sprinkler system before the heaters' temperatures are set. Make sure to have counsel review contact terms and conditions as to properly assign liability should any issues arise out of services being performed.

Be aware that more than one heat treatment may be necessary to eradicate the bed bugs. Talk with the pest management professionals about the potential for multiple heat applications and scheduling follow-up treatments.

Protection From Bed Bugs

Review your hotel's general liability policies with your insurance agent to be sure the policies provide the full limits of coverage and don't contain any bed bug-specific exclusions. The policies should also include coverage for defense claims and lawsuits brought by guests and for property damage stemming from remediation efforts, including pest management treatments.

Hotels should also protect themselves against potential interruptions to the business due to a temporary shutdown to deal with an infestation. Depending on the scale of the infestation, it could take pest management professionals several months to properly exterminate the bed bugs, particularly if the treatment doesn't work the first time. Hotels should also have coverage for revenue lost due to its damaged reputation from negative press reports or bad guest reviews. For more on business interruption insurance, see my previous column for Hotel Executive, "Business Interruption Coverage: Why You Need it and What Should Be in Your Policy." [Link]

In addition, should a claim go before a judge and jury, be aware that policies usually don't cover any punitive damage awards that might result from a trial.

Taking a proactive approach to protecting your hotel from bed bugs and the claims that could arise from an infestation will help mitigate potential liability. Ensuring that all relevant staff members are on the same page through training and communication is just as important as having the right insurance coverage in place.

Senior Risk Manager for Venture Insurance Programs. Mr. Bolger has specialized in hospitality risk management since 2007 and is responsible for improving the risk performance of Venture’s hospitality clients by reducing the frequency and severity of claims, analyzing loss reports to identify trends by industry or location, and improving loss ratios in order to improve pricing for the hotel and profitability for the insurer. Overseeing all risk management operations, including the claims adjusting teams, Mr. Bolger ensures proper proactive claim management and loss control procedures are in place with the overall goal of minimizing the overall cost of risk. Mr. Bolger can be contacted at 800-282-6247 ext. 242 or Cbolger@ventureprograms.com Extended Bio...

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