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Welcome to Dubai !Managing Claims in the Hospitality and Tourism Sector
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• Ronald Smith Risk Manager
• Joana Nogueira Complex Claim Adjuster
• David Todd Loss Adjuster
• Michael Ducker Senior Associate
On The Panel
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1. RESORTS
2. INSURANCE
3. LOSS ADJUSTING
4. LEGAL DEFENCE
Four Steps of Claim Management
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1. RESORTS
2. INSURANCE
3. LOSS ADJUSTING
4. LEGAL DEFENCE
Four Steps of Claim Management
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Waterpark
Food & Beverage
Hotel
RESORTS:SOURCES OF
CLAIMS
ANNUAL ATTENDANCE
Resort Guests: 1.2m
F&B Covers: 4.1m
Waterpark: 1.6m
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INCIDENT OCCURS
HOTEL
FOOD & BEVERAGE
WATERPARK
INQUIRY(Fact Finding)
Security
Food Safety
WaterparkManagement
INTERNALREPORTING
Claims Manager
EXTERNALREPORTING
LITIGATIONDEFENCE
Opportunities to Settle
Q.A.Dept.
Risk Management/Legal Department
CLAIM MANAGEMENT PROCESS
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• WATERPARK• Slips, Trips and Falls• Collision (slides)• Contusions/Strains/Sprains• Abrasions/Lacerations
• HOTEL• Slips, Trips & Falls• Bruises/Strains/Sprains• Abrasions/Lacerations
• FOOD & BEVERAGE• Food Allergies• Food Contamination• Flu-like symptoms
CAUSES/TYPES OF CLAIMS
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• Late or Non-Reporting of Incident
• Failure to Get Statement from Claimant
• Failure to Get Statements from Witnesses
• Inability to Use CCTV Technology
• First Reports from Outside Correspondence
• Aggregation of Low Value Settlement
• Conscious of Power of Social Media
UK: Package Travel Regulations of 1992Tour Operator Claim Management andIndemnification Clauses
Claim Management Challenges
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http://www.dailymail.co.uk/news/article-3953448/Travel-firm-uses-spies-rumble-company-bogus-sick-claims.html
1
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Trolling for Illness Claims by UK Solicitors
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1. RESORTS
2. INSURANCE
3. LOSS ADJUSTING
4. LEGAL DEFENCE
Four Steps of Claim Management
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Risks Triggering Your Liability Policy
• Each day brings different incidents with the potential to escalate.
• Some Are Routine:
• Slips and falls,
• Food poisoning,
• Missing items from guests .
• Damages caused by valet parking.
• Others Are Extraordinary:
• An allergy caused by a henna tattoo.
• Child drowning in the adults swimming pool.
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Process: Practices for Liability Claims
• Claims handler to acknowledge receipt of a claim in a prompt fashion:• Request further information to assist in taking a coverage position• Appointment of experts to assist in the enquiries when needed.
• Insured to facilitate insurers investigation, acquisition of documentation and evidence.
• Depending on the case, insurers might select to guide the insured how to conclude a simple case. With more complex cases, insurers will establish direct contact with the claimant, with the aim of conducting a successful negotiating. The ultimate objective is to bring the matter to a fair and just conclusion.
• All documents that support payments, diagnosis, disability, evaluations, calculations etc. should be secured and preserved.
• When required, insurers will appoint defense counsel to defend insured interest.
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Best Approach in Case of an Incident
• Listen Properly
• Protect guest’s privacy
• Be alert: a docile guest might become an aggressive claimant!
• Report the incident
• Investigation is required to determine liability, the sooner the better
• Decide what information is required and the right questions to ask
• Take photos of the scene, conduct site investigation, and preserve evidence
• Witness memories fade quickly: please secure written statements
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What Do People Claim For?
• Property Damage: • The cost of repair or replacement of a damaged or lost object
• Bodily Injury/Illness: • Reimbursement or payment of medical expense and compensation for the pain
and suffering caused by the injury and the effect it has had on their lifestyle.
• Financial losses: • Lost earnings, bonuses and overtime because of the accident; in addition to
travelling expenses for visits to the hospital. Loss of use of vehicle.
• Provisional Damages: • Where there is risk that a medical condition caused by the accident will
deteriorate within a certain time in the future.
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Required Information
Incident Report:• Information on the guest (name, age, nationality, ID copy, contact details)• The circumstances (incident date/time, reported date/time)• Action taken• The allegations• Description of the injury or damage• Description of the location of the incident • Photographs / measurements / CCTV footage• Highlights on any demands/allegations
Additional Documents:• Witness statements: Avoid personal opinions• Medical records• Police / Fire brigade report • Damage estimates
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Key Points
• Hotels are not liable for every accident or loss that occurs on the premises
• For the hotel to be liable, there should be a proven Breach of duty and causation
• Hotels have a general duty to exercise "reasonable care" for the safety and security of their guests, either to:
a) Correct any situation that can constitute danger (mostly when there are similar incidents reported);
b) Warn on the existence of that danger.
• Hotels may be "vicariously liable" for the NEGLIGENCE of their employees, vendors or 3rd party contractors.
• Take corrective measures to prevent re-occurrence
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Alert - Suspicious Claimants
• Opportunists, repeat offenders, professional and organized fraud;
• Motives: greed, financial pressure, moral hazard, arrogance, etc…;
• Indicators: very friendly, very angry, previous history, suspicious circumstances, altered documents, non-disclosure of proper information or documents, exaggeration and fabrication, with an intention to make a gain or cause a loss;
• How we might defeat it: develop an anti-fraud culture, while respecting the company policies and the applicable laws.
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1. RESORTS
2. INSURANCE
3. LOSS ADJUSTING
4. LEGAL DEFENCE
Four Steps of Claim Management
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What is a Loss Adjuster?
• Insurance claims expert
• Appointed by Insurance/reinsurance carrier
• May specialize in a certain field, e.g., liability claims
• Independent, impartial – first party claims
• Third party claims – we’re on your side!
• Duty to act professionally
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The Role of the Loss Adjuster
• Establish the circumstances of loss – Insurer’s eyes and ears on site
• What happened – who, what, where and when?
• Cause – involvement of forensic experts/interview witnesses
• Extent of Loss & Damage – type of injury/extent of physical loss or damage
• Gather evidence – potential defence?
• Subrogation – can I get my money back?
• Communication – with both Insured, Insurers & third parties
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Who is at Risk for Claims?
• Hotels
• Restaurants
• Spas
• Water parks
• Theme parks
• Golf course operators
• Marine & aviation operators
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Risks & Sources of Potential Liability Claims
• Swimming pools
• Water parks
• Water sports
• Marine pleasure craft
• Desert safaris
• Aviation – hot air balloons/light aircraft
• Slip/trip & fall
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• Food poisoning
• Fire
• Golf course risks
• Theft of personal effects
• Valet parking
• Amusement rides
• Miscellaneous – e.g. legionnaire's disease
Risks & Sources of Potential Liability Claims (cont.)
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Loss Adjuster Enquiries
• Review of initial documentation received
• Review policy coverage
• Arrange site attendance
• Inspect the situation of accident/incident
• Establish the standard operating procedure
• What went wrong, if anything?
• Gather evidence
• Interview witnesses
• Take photographs
• Prepare report(s) for Insurer’s consideration
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1. RESORTS
2. INSURANCE
3. LOSS ADJUSTING
4. LEGAL DEFENCE
Four Steps of Claim Management
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Liability Claims: Litigation Process
• UAE Courts:– Civil Courts– Criminal Courts– Shariah Courts
• Litigation divided into three stages:– Courts of First Instance– Courts of Appeal– Court of Cassation
• Procedures of the UAE Courts• Role of advocacy / pleadings • Proceedings in Arabic• Expert appointment
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Liability Claims: Duties and Legislation
• Employers required to ensure the health of safety of employees at work, and of visitors to premises
• Breach of this duty, leading to death or injury, can give rise to both financial and criminal penalties
• Principle legislation:
– Labour Law (Federal Law 8 of 1980)
– Penal Code (Federal Law 3 of 1987)
– Protection of Workers from Hazardous Works (Min. Dec. 4/1 of 1981)
– Working in Remote Areas (Min. Dec 27/1 of 1981)
– Employee Penalty Guidelines (Min. Dec. 28/1 of1981)
– Prevention of Hazards at Work (Min. Dec. 32 of 1982)
– Standards of Medical Care (Min. Dec. 37/2 of 1982)
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Types of Liability – Criminal / Administrative Sanctions
• Penal Code
• Contains financial and detainment penalties
• Labour Law and Ministerial Decisions
• Breach of H&S obligations punishable by fine >AED10k and/or imprisonment for >6 months
• Fines can be levied against the company, but officers could face imprisonment
• Imprisonment usually only imposed where gross negligence has occurred
• Administrative Sanctions:
• Ministry of Labour and Social Affairs is the competent authority to “police” the workplace and apply certain administrative sanctions
• Ministry can suspend or cancel a company’s licence in the following circumstances:
• Failure to take adequate precautions against H&S risks to employees, visitors
• Failure to remedy violations of the regulations
• Failure to report an accident or death in the workplace
• With the exception of a failure to report an accident or death in the workplace (which attracts immediate criminal proceedings), administrative sanctions are usually applied prior to any criminal sanctions.
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Types of Liability – Fixed Compensation
• Shar’ia Principles:
• Diya (blood money for causing a death, currently set at AED200k)
• Arsh (compensation for causing injury, operates on a sliding scale)
• Ghurah (compensation for causing death of an unborn baby)
• The effect of Diya on other forms of compensation?
• Cassation No 119/2004 it was held that claim for material losses (i.e. LOE) can also be made
• Claims culture in the UAE
• Comparison with other jurisdictions
• Damages awards
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Types of Liability – Fixed Compensatory Damages
• Any other relevant laws?
• Article 282 Civil Code: general provision whereby those committing acts causing harm to others can be made to account for their actions
• Article 290 Civil Code: damages may be reduced in the case of contributory negligence
• Article 291 Civil Code: principle of joint and several liability
• Vicarious liability?
• Article 313(b) Civil Code: those who suffer damage/loss due to a harmful act committed by a subordinate/employee by virtue of, or during the performance of his job.
• Supervisor: whoever has actual control by way of supervision and direction over a person who caused the damage
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Hazards of Litigating in the UAE
• No binding precedent
• Lack of disclosure rules
• “Without prejudice” communications
• Settlement negotiations / admissions of
liability
• Protracted proceedings
• Forum shopping
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Q & A