Recently, I had the privilege of participating in a discussion panel at the Insuralex 2024 Summit in Miami last May. The conference was both interesting and fruitful, living up to all expectations.
The session titled “Sun, Sand, and Suits: Cross-Border Liability Claims in the Hospitality Industry” was particularly engaging for the attendees. Together with Giovanni Fanizza, Samantha Lemery Rowles, and Bruce Marx, and moderated by Neftalí Garro, I had the pleasure of exploring both the legal theory and practical approaches to cross-border claims in the tourism sector.
The numerous examples of incidents occurring while people travel abroad highlight the critical need for collaboration among all stakeholders. This includes proactive measures from hospitality providers, legal counsels with specialized knowledge of local laws and regulations, and loss adjusters who combine a hands-on approach with an understanding of the legal framework in which they are during their investigations and assessments.
As we all know, international travelling these days almost always includes services of two or more jurisdictions. As an example, let’s take the following -imaginary- scenario:
Jean-Marc, a French national and resident of New York in the United States, has booked a week’s stay in a hotel in Mexico through a Dutch online travel agent. The hotel is a local entity with headquarters in Germany and has “sister” hotels in Florida in the USA. During his stay in Mexico, Jean-Marie decides to book a trip on a speedboat. The company offering these boat trips is another independent Mexican entity that has its own permanent stand in the hotel where it offers its trips in the hotel lobby. Jean-Marie was referred to the boat trip operator by the hotel reception. The boat trip goes across the open sea and during a wild trip with high waves, Jean-Marie hits his face on the edge of the boat and suffers serious jaw injuries. While the high waves had been foreseen Jan-Marie was not warned about this and he did not wear a seat belt on the boat. Jean-Marie holds the boating company, the hotel and the travel agency liable for his financial and emotional consequences deriving from his injuries.
The questions that arise in this above-mentioned scenario, when starting the loss adjustment investigations, include the following:
– On the basis of which law is liability determined?
– On the basis of which law is the damage determined?
– In which jurisdiction(s) is the insured, and possibly therefore the insurer, at risk of proceedings?
– How do these options interfere or affect each other?
– How does this all affect the applicable policy or policies?
Is Mexican law the jurisdiction to follow, now that this is the domicile of the hotel and the boat operator as well as the location where the accident occurred? Or should German be applied, Jean-Marie acquired his stay from a hotel chain with headquarters in Germany, would this imply that German law should be applied? But, now that he acquired the reservation through a Dutch travelling agency, is Dutch law (also) applicable? Or, maybe, should French law apply because of Jean-Marie’s nationality; or would US law be more suitable because he is a resident from the US
and there is a risk for legal procedures in the US now that the hotel chain has hotels there too? Or maybe there is a forum of choice established in any of the contracts that apply? Or should a combination of these options be considered?
When answering these questions on applicable jurisdiction, it is important that the facts, that form the basis for the assessment of the liability, are properly collected when investigating the loss event. During this process of collecting information, assessing the risk of liability and subsequently assessing the exposure is part of the loss adjuster role, sometimes jointly with the legal counsels. Based on these conclusions the chances of an amicable settlement or, alternatively, the risk of legal proceedings will be explored, and a settlement solution can be formalized with the adoption of a certain jurisdiction although more often without doing so.
In this process, it is also of importance that all the parties involved, from the (re)insurers to brokers as well as to the insured parties themselves, are equally aware of the potential risks and exposure they run. In this light, an evaluation is made to either accept a negotiated out of court solution is accepted or to prepare for legal proceedings with an unsure outcome. The loss adjuster plays a central role in assessing this exposure and in the communications with all related parties updating them and reaching an amicable solution if this is the parties’ intention.
The (re)insurance market requires that these risks which, by their very nature, are complex claims, are handled effectively and efficiently. Doing so will enable them to analyze their risks involving several jurisdictional approaches properly to reach the best risk mitigating outcome.
And for everyone who things on boating next time: you’d better buckle up!
Maurits Filet – Miami Liability Division Director
