Firm Offers Bad-PR Insurance for hotels

USA Today: In a world where bad news travels fast via social media and a hotel's sullied reputations can cost real money, you'd think that hotels could buy bad-PR insurance.

Well, now they can.

A press release by the London-based insurers, including a Lloyd's of London underwriter, says they designed their new "Hotel Reputation Protection 2.0" policy to limit hotels' liability resulting from bad publicity.

That could mean "bad" newspaper articles or blog posts about the death of a guest who'd contracted Legionnaire's disease at an insured hotel. Or scathing online reviews on TripAdvisor or other sites from guests caught by an outbreak of the vomiting norovirus bug.

The other potential sources of bad PR covered by the policy? Food poisoning - whether accidental or not, and death or permanent physical disability of a guest. And that's it.

Not mentioned, and therefore, apparently not covered: Complaints about bad food, a meeting gone wrong, ugly guestroom views or surly staffers.

The policy would pay an insured hotel up to about $34 million to cover both lost revenue and - why not? - the hiring of a crisis PR consultant.

Global insurance broker Willis Group in conjunction with Lloyd's of London underwriter Kiln are selling the policy.

"In the extremely competitive hotel industry, reputation accounts for approximately 30-40% of a business's overall worth," Willis exec Laurie Fraser says in the press release.