2010 personal injury claims could shock hospitality industry

While the spike in tourism in 2010 is expected to bring economic benefits to the hospitality and retail industries, the sectors have not factored in the costs of potential legal action from an estimated 10 million visitors next year.

According to insurance company AIG South Africa, tourists to SA will be coming from more litigious countries, raising the risk of claims against businesses catering to the tourist trade.

“Not only are we expecting the promulgation of The Consumer Protection Bill this year, which introduces strict liability for suppliers, but people are coming from countries where litigation is far more common,” says Elton Julies of AIG South Africa’s Global Loss Control department for the Liabilities Group.

Hotels, malls and other retail outlets therefore need to have the appropriate safety precautions in place to mitigate the risk of injury or loss to their visitors.

In the US for example, the average cost for slip and trip accidents ranges from $7,000 to $25,000 in direct costs (R60,600 to R216,000). Indirect costs typically increase this amount three to five times.

Some recent personal injury settlements in SA include R600,000 for a fractured foot and R380,000 for torn knee ligaments, indicating that damages arising from claims in SA are just as costly as abroad.

A recent analysis of major retail customers in South Africa found that 40% of all claims were as a direct result of slip and fall incidents, 21% were due to cuts or falling objects, and 17% a result of trolley related incidents such as children falling out of trolleys.

AIG’s Liability Loss Control programme aims to prevent and control losses by being as proactive as possible.

“This service can help a company’s bottom line in a number of ways,” says Julies. “Firstly, identifying and mitigating risks ahead of an incident saves the company expenses arising out of legal action. Secondly, providing technical support to underwriters to better understand the risks involved ultimately decreases insurance premiums.”

AIG Consultants employs more than 500 loss control engineers worldwide. Typically, they will provide a comprehensive review of a property and the associated risks and also assist in implementing recommendations.

“We really aim to prevent incidents before they happen,” says Julies. “2010 is a huge opportunity to showcase South Africa. But there is a big reputational risk for our hospitality and retail industries, and for the country as a whole, if we do not ensure the safety of our visitors.”

AIG South Africa offers the following tips to prevent and control losses:

• Conduct regular and frequent inspections of working and walking areas to identify hazards which could cause accidents
• Provide extensive training for all employees and contractors on the prevention of accidents such as slips, trips and falls
• Report, record and thoroughly investigate all incidents including slips, trips and falls and take corrective action immediately
• In areas where the walking and working surface is likely to be slippery, non-skid strips or floor coatings should be used
• Safety signs should be posted where hazards cannot be corrected or removed. Such signs should be changed frequently
• Consult with a loss control specialist to develop a unique loss control management programme for your business
• Ensure that concessionaires, security companies and contractors have adequate liability insurance cover