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Willis Launches Reputation Protection for Hotels

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Posted on 12 Oct 2011

In the world of new media where bad news travels fast, food-borne illness or accidents involving guests on site can ruin a hotel’s reputation, and their balance sheet, overnight. To help protect hoteliers from losses as a result of such adverse publicity, Willis Group Holdings, the global insurance broker, in conjunction with Lloyd’s of London underwriter Kiln, has created a policy aimed at limiting the financial fallout from negative PR.

The Hotel Reputation Protection 2.0 policy has been created to respond to incidents that lead to, or are likely to lead to, losses resulting from adverse publicity through any medium, from traditional to new media.

Specifically, the policy provides cover for lost revenue based on RevPAR figures, a performance metric in the hotel industry that measures revenue per available room. It also provides cover for the cost of hiring a crisis management consultant to assist during the first weeks of an incident. The policy will pay up to €25 million for both the crisis management costs and the reimbursement of the reduction in RevPAR.

The Willis-Kiln cover is designed to protect hotels against some of the most common causes of brand damage, including the death or permanent physical disability of a guest, and food poisoning caused by malicious or accidental contamination. Also covered are outbreaks of Norovirus, which is responsible for about 90 per cent of stomach illnesses, and Legionnaire’s disease, a potentially fatal lung infection that can be contracted through the consumption of contaminated water.

Laurie Fraser, Global Markets Leisure Practice Leader for Willis said: “In the extremely competitive hotel industry, reputation accounts for approximately 30-40 per cent of a business’s overall worth. Therefore, damage to reputation, which spreads virally through social and other media channels, can have a significant financial impact. Our product is designed to tackle both the actual loss of revenue and the costs of containment.”

Paul Culham, Active Underwriter of the Enterprise Risk division at Kiln, which co-developed the product, said: “This development is yet another example of how Kiln’s focus on innovation and our partnership approach can enable pioneering products like this to be brought to the market. Our cover will provide peace of mind for businesses worried about the impact of potential brand damage on their bottom lines.”


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