28 April 2015
Meet the Money® 2015 Spotlight
The Hotel Law Blog is highlighting some of our Meet the Money® 2015 sponsors as the national hotel finance and investment conference approaches. In the Q&A below,, describes how the risk management company approaches the unique needs of hospitality companies.
You can hear from Rich and 100 other speakers at Meet the Money® 2015, coming up May 4-6 in Los Angeles. The window of opportunity for hotel deals and development is wide open, and the 25th year of our conference will help you make the right choices and meet the right people to add value to your deals in 2015 and beyond. Register now at www.MeetTheMoney.com.
Jim Butler: Tell us a little bit about yourself. Where are you from? How did you get into the insurance business and hospitality. When did you join AJ Gallagher and come to your present position? What are responsibilities at AJ Gallagher now?
Rich Clark: I am originally from Nashville, Tennessee, and started in the insurance business out of college as an underwriter with an insurance carrier. I moved to the broker side five years later to a firm in Memphis, and moved to Houston in 1985 with a national broker. Two years later, with a group of guys from New York, I opened a new brokerage firm with offices in New York, Hartford, Irvine and Houston. We sold this company to Arthur J. Gallagher in 2001, which is when I joined.
I began specializing exclusively in hospitality in 1992—three of my hospitality clients have been with me for more than 20 years. In late 2001, we launched the Real Estate and Hospitality practice for Gallagher. We later decided to create a separate hospitality practice due to the big differences in hospitality from the other asset classes within real estate. I am the National Practice Leader for Gallagher Hospitality, and a part of the newly formed Global Hospitality Practice. I remain involved in the real estate practice, and am also a Regional Director for the Gallagher Property Insurance Practice.
Jim: Tell us about some of your current or recent engagements. Who are you working with and what are you doing? How are you and your team spending your time?
Rich: We have been successful in developing insurance and risk management solutions for hotel REITS and funds that are extremely active in acquiring assets right now. We also focus on management companies and have some proprietary products for property crime and cyber.
AJG Hospitality provides coverage for approximately 6,000 hotels and 800,000 rooms. These include Ownership and Management groups. We have a dedicated team that focuses exclusively on hospitality, and training programs to enhance loss prevention and hospitality-specific claim advocacy. We do a lot of contract reviews of insurance provisions for refinancing and acquisitions. We’re also very active in the resort space.
Jim: What new initiatives are you excited about for your company in 2015? Have you developed any new products that owners and operators should know about? Anything new for developers?
Rich: In response to recent, high-profile data breaches in the hospitality industry, we have developed a cyber security product for owners who do not manage their properties — REITS and funds specifically. They can be assured that they are protected regardless of what coverage the management company does or does not carry. We have a proprietary property Insurance program for the small to middle-size owners and operators, which provides much broader coverage and better pricing than they could obtain elsewhere. We also have many enhancements in our property form, including PIP upgrades and code issues, and loss of revenue due to events like oil spills, workplace violence, and infectious diseases.
We place coverage for a number of construction wrap placements for developers that covers all parties involved in a project, including the general contractor. developer and subs, in one Insurance placement. Coverage is broader and the cost is less than purchasing through the various contractors involved, and construction defects are covered as well.
We also have a political risk/terrorism product that provides business interruption coverage for hotels within a specific radius of a covered event–the Boston Marathon bombing, for example. Practically all of the current products, including TRIA, require damage to the hotel for any coverage to apply. This is a unique Gallagher Hospitality exclusive product.
Jim: Any tips you have for hoteliers in as they plan for the future? Either traps people are falling into or opportunities missed? Any problems you have solutions for?
Rich: Cyber security is now on the radar screen. There are no standard products, so hoteliers need to choose a broker that is experienced in hospitality–particularly in the cyber security area–and make sure they are getting the right product.
Legionella and mold are also areas where we have seen some large claim activity. We have specific coverage solutions for those areas. We partner with carriers and underwriters that understand the hospitality space, and we’re able to get a good claim result even if there is a gray area involving coverage. Our claim team has many years of experience dealing with claims from major storms and mold to employment practices, carbon monoxide, legionella and construction defects. We have relationships with remediation contractors, construction consultants, adjusters and coverage attorneys to get the best claim result possible.
Jim: Your company was recognized this year by Forbes as one of America’s Best Employers and by Ethisphere as one of the World’s Most Ethical Companies. How does your company’s culture affect the way you do business?
Rich: The Gallagher Way is a book written by Bob Gallagher, former Chairman of Arthur J. Gallagher. The principles by which we operate are described in-depth in the book, and they drive everything we do. The culture at Gallagher is unique in the insurance brokerage industry and is a constant focus for us. This is our 4th year for the Ethical Company award and our first Forbes award. We are extremely proud of those, and we all work hard to ensure the standards required by both of those organizations are upheld. Our culture is what sets us apart from our competitors, along with our business model, which focuses on industry practice groups which put our industry experts at the forefront of client service. Since I joined in 2001 we have grown from 4,500 employees to over 20,000 today. Our culture has not only survived—it’s stronger than ever. Many merger partners join Gallagher because of our culture.
This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We’ve done more than $87 billion of hotel transactions and have developed innovative solutions to unlock value from hotels. Who’s your hotel lawyer?
Our Perspective. We represent hotel owners, developers and investors. We have helped our clients find business and legal solutions for more than $87 billion of hotel transactions, involving more than 3,900 properties all over the world. For more information, please contact Jim Butler at email@example.com or +1 (310) 201-3526.
Jim Butler is a founding partner of JMBM, and Chairman of its Global Hospitality Group® and Chinese Investment Group®. Jim is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” and you will see why. Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.