Reference no: EM132841036

Hotel Risk Management in the Wake of the Erin Andrews Case

Once upon a time, ESPN host and celebrity Erin Andrews checked in to the Marriott Nashville while traveling to cover sports events. We all know what happened next - a stalker, a camera in the peephole, a viral video and a massive lawsuit finding the hotel at fault (and rightfully so given the scale of this security breach). What's most important for you as hoteliers not directly affiliated with this property to understand are the implications of this case - both from a risk management as well as an insurance perspective - of which there are many.

The scariest part of all this is that even with the best practices already in place, this incident might have still happened. However, what every hotel must learn from this is that the hotel was not found culpable by a jury because the stalker was successful, but because the property made it easy for this stalker to make the video.

Lessons from the Erin Andrews Case

No one was ready for the calamitous events that would begin to unfold in 2008. Not Erin Andrews, not her stalker Michael David Barrett, and certainly not the owners of the Marriott hotel who would eventually be sued for more than $26 million. The issue of risk mitigation seemed all but irrelevant until it was time for the hotel to defend itself during a very public trial. For all involved, issues of privacy, risk, insurance, and liability were set out in plain view. It all began during a seemingly routine hotel stay in Nashville, Tennessee--Erin Andrews, a well-regarded Fox Sports correspondent booked a room and assumed her safety (she was working for ESPN at the time). She was then unknowingly filmed in the nude by her stalker, Michael Barrett (who intentionally sawed off part of the peep hole to her door in order to easily film her). The video went viral, viewed millions of times on the Web. Andrews' assumed privacy and safety had been a rouse, and because the hotel staff informed Barrett that she would be staying there, liability became the topic of discussion. West End Hotel Partners, which owns and operates Nashville Marriott at Vanderbilt University where Andrews was staying, had hardly accounted for the need for a risk mitigation strategy that would address exposures indirectly related to their operations. But the murkiness of this case begs the question of what hidden risks were present. Each hotel is independently operated-does each location come with unique risks? Who is liable if a patron commits a crime; or, as in this case, commits a crime using information garnered by hotel staff? Risk mitigation involves taking steps to reduce the likelihood that some risk will come to fruition, resulting in a loss. Part of this work should take into account those risks that aren't easily seen. A jury heard testimony from all three parties and concluded that Barrett and the hotel were liable for damages experienced by Erin Andrews. Barrett was arrested and served two years in prison. Erin Andrews eventually won her civil lawsuit and was awarded a total of $55 million. But here is where it gets interesting: the jury found Barrett to be 51 percent at fault and required him to pay more than $28 million. West End Hotel Partners was found to be 49 percent complicit and was required to pay more than $26 million. As a well-recognized corporation, Marriott has insurance in place to sustain itself after losses occur. But Marriott's attorneys argued that Barrett was the person who should take full responsibility, as Barrett was the one who performed the act. What Marriott didn't take into account ahead of time is that the organization would have to bear some liability for the inadvertent actions taken by its staff, even if those actions did not directly break any laws. That is, hidden risks can contribute to corporate loss in unexpected ways. For closely-held midmarket businesses, risk mitigation is fundamental to business stability. It's the commitment to keeping operations running like a well-oiled machine and to recognize risks preemptively. The story of Erin Andrews, Michael Barrett, and Marriott was sensationalized in the media, drawing public attention with more and more veracity after each milestone in the case. To some, the story held entertainment value; a situation that might only happen to big-named celebrities.

Although Erin Andrews won a monetary award of $55 million, experts believe she will not receive the full figure. As reported by CNBC, "Tennessee, where the trial took place, is one of 18 states where a defendant is only responsible for paying his/her/its share of the damages they caused, subject to certain exceptions, according to a recent survey by the law firm, Wilson Elser. If the judge decides an exception applies, it could make the hotel responsible for the whole $55 million." Appeals and post-trial motions may affect the true outcome of this case.

CNBC also reported that "A court may conclude that the hotel should have foreseen that, by negligently sharing Ms. Andrews' hotel information with Barrett and agreeing to put him in the room next door, Barrett would intentionally videotape Andrews resulting in all of the harm to her that followed. The Tennessee Supreme Court has said that, if the victim of wrongdoing can show all of that, a negligent party like the hotel may be responsible for paying for the damages caused by Barrett."

Based on the Erin Andrews' case, create lists and or outlines of information of ways to identify, address, reduce and maybe even eliminate risk within a hospitality organization. Make them into a short paragraph addressing the steps you recommend hospitality businesses take to help reduce risk and limit their liability.