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How Recent Florida Worker Compensation Changes Will Impact Your Operations

Making hotel insurance simple, and saving you money in the process.

You may be aware of this recent judgment, maybe not. Either way, you definitely should be, because it has ramifications for every hotelier (and any other business owner) across the country. Even though Florida is often quite idiosyncratic in its lawmaking, this recent change has big legs, and there’s no doubt that some iteration of it will roll out nationwide.

First – credit where credit is due – I’d like to point out an article on the matter so you can educate yourself on what has transpired. Read it here:

The short story is that benefits to injured workers will be compensable going back in time for as long as five years. Seeing as how this was mandated by the Florida Supreme Court, your own state will likely react sometime soon. As a hospitality employer, you won’t appreciate the end result. Claims that you had closed with your insurance carrier can now be reopened, leaving you vulnerable. Yes, these will be absorbed by the prior insurance company, but they will eventually cost you more money!

If you have a claim for an injured worker from three years ago that was settled, the employee was paid for lost time and you thought it was done and over. But now they can re-open the claim and ask for more back wages.

How does that work? Claims paid under workers’ compensation trail with you over time. In the insurance industry, we call this an experience modifier – it is a multiplier placed on your overall premium due. Under 1.00 is good, 1.00 is average and above 1.00 is not good. The formula is complex but your insurance advisor should be promulgating this factor every year to make sure it is accurate.

As a senior manager, you should know what your experience modifier is – yes, if asked, you should be able to say, “We have a 0.82 or a 1.71.” Whatever it is, you should know it and be able to explain it!

If your premium is, for instance, $100 based on payroll by class code, eventually this number is multiplied by the experience modifier. If you are under 1.00, you pay less; if you are over, you pay more. But with this new law, we now have to go back and retroactively adjust our numbers based on what we think will be paid out. If you operate within the Sunshine State, I can conclusively say that your premium is going to increase.

The entities that do this promulgation (NCCI and other state rating entities) calculate the final number from data received by the insurance companies without questioning the accuracy. It happens six months prior to the new policy being issued and it goes back many years. So if a claim that was closed is now reopened with more expected to be paid, the calculation changes the total incurred in the equation.

As an example, if a worker was paid $10,000 to handle medical expenses, that is a done deal. The indemnity portion is the future payments of lost wages to the employee injured on the job site. This number is very hard to quantify, though. Does the employee want to return to work or stay home? Will they do a lesser job to maintain the dignity of working while injured? Do you offer a return to work policy? Do you have a safety program or a drug-free workplace that the injured employee possibly violated? The motivation of the employer and the employee to get back to work is mixed with the severity of the injury.

To conclude, every case is different, and so are the statutes for each state. While you are likely too busy to peruse every insurance-related headline that flies through your daily newsfeed, just know that what has just happened in Florida will likely be adopted by other states. As hotels are sizeable labor employers, I wouldn’t say this is cause for alarm, but definitely something to have a conversation with your insurance agent at some point soon to assess how well you are covered.

(Article by Tom Cleary, published in Hotel Interactive on August 23, 2016)

About the Authors 


Tom Cleary is an Equity Partner with the Sihle Insurance Group in Clearwater Florida and a member of Cayuga Hospitality Consultants. Based in Florida for his entire career, Tom has expertise in commercial insurance with a focus on hospitality and real estate as well as flood and wind exposures. Products offered include property, liability, automobile, crime, umbrella and workers’ compensation throughout the United States and the Caribbean. Tom also serves as a regional director for The Cornell Society, has been a board member and longtime member of the Florida Restaurant and Lodging Association, and serves in an advisory capacity to the Resort Hotel Association.


The Four-Pillar Imperative of Hotel Positioning

Do you really understand how to position your hotel and then profit from that positioning? We show you how in a few smart steps.

Positioning your hotel can be a matter of profit or loss. However, it’s not as easy as it seems. Though this subject is discussed often, it’s frequently misunderstood. And how exactly do you create successful positioning and is your hotel positioned correctly?

To me that means you have identified a prime prospect, defined your competitive set, understand your product/service points of differentiation and clarified guest aspirations. It isn’t about market share position, product tier position, branding, star ratings and other commonly misinterpreted barometers.

Positioning is important in today’s hospitality environment to avoid the commoditization effect where only price is the primary differentiator. Positioning clarifies a direction for your organization, management team, employees and ownership. It provides a sense of who you are as service provider and a means to define your style of service delivery.

The success of your positioning is not necessarily driven by a unique point of differentiation or a clever phrase. In my opinion the success of your positioning is driven by the involvement and commitment of your entire organization. Even a positioning with some minor flaws can be successful if the organization is behind it. There are four pillars of a successful positioning:

Representatives from all stakeholder groups need to be involved in defining your positioning – owners, senior management, department heads, line staff and employees. You need to fully engage everyone to ensure a sense of ownership. You will be surprised at how insightful a frontline employee will be when asked his/her opinion. When you publish your key points of differentiation, you need real consensus and full support.

You must be candid about the strengths and weaknesses of your product and service. Without an honest evaluation, you don’t have a good foundation for your positioning. As an example, a destination resort that was located off the beach in the heart of the entertainment district for years tried to represent themselves as a beach resort. We convinced them that their access to the retail, restaurants and nightlife was in fact a key point of differentiation that they could leverage. Once they accepted this fact and began to position themselves as a ‘city resort’ their customers rewarded them with significant increases in both satisfaction and RevPAR.

Once defined, you need to communicate your positioning across your entire organization. Explain the positioning, how it will be used and why it will benefit the individual and the organization. Use the stakeholders directly involved in defining your positioning to spread the word and garner support. Your communication must also be ongoing and frequent – a one-and-done philosophy won’t work.

Your positioning should be reflected in everything you say and do, your service standards, enhancements, resource allocation, capital decisions, sales and marketing approach, human resource policy and budgeting. Never neglect the back of house. Your positioning should also be reflected in management communications, how employees communicate with each other and how employees assist each other to deliver to customer expectations.

As an example, a hotel we were working with defined their prime prospect as the small corporate group segment. Once they were clear on the value of this segment to their business, capital investment in the small meeting space became a priority rather than an afterthought. As a result they increased their competitive advantage in the small meetings segment and realized healthy improvements in market share.

Positioning is Alive!
Too often positioning resides in the Executive Office and is not communicated successfully. There is an expectation that because the positioning is understood at senior levels it should also be understood on the front lines. Or it is a one-time exercise – you put the time, effort and expense into defining you’re positioning and it collects dust on the shelf.

Positioning needs constant feeding to thrive. It needs to be used on a daily basis and revisited on a periodic basis. Positioning isn’t static, it evolves. As your environment changes, your positioning may need to be tweaked. Clearly positioning is more critical as a competitive advantage in full service commercial hotels and resorts. In fact, in the select-service environment, commoditization and no surprises may be the key to success.

Would your hotel benefit from a positioning exercise? Are you willing to commit to the process and use the tool ongoing? Are you willing to bring in an objective third party to conduct the exercise?

I have seen successful positioning exercises that were conducted with internal resources, but they are the exception. To get buy-in from all levels you often need a facilitator who is willing to call out a senior leader who is advancing a personal perspective.

Whether you are part of a major brand or an independent, there is value in defining you’re positioning and leveraging your positioning to gain a competitive advantage. If you are willing and able, I can tell you from experience that there will be incremental RevPAR and market share benefits that will lead to incremental profits.

About the Author


Chuck Kelley retired as Executive Vice President for Marriott’s Caribbean/Latin America Region in 2010. During his tenure the region grew to 53 operating hotels and a confirmed pipeline of over 20 new hotels. Chuck’s career spanned 32 years in the hotel business including a strong focus on the Caribbean and Latin American regions. Chuck is a 1977 graduate of the University of Hawaii Travel Industry and Management School with a Bachelor of Science Degree in Business. Contact Chuck at