The Modern Hotelier #261: Understanding Insurance for Hotels | with Brian Popelmayer
===
David Millili: Welcome to The Modern Hotelier Hospitality's Most Engaged podcast. Don't forget to like, follow and subscribe and let us know about today's episode in the comments. We are here at the Hunter Conference in Atlanta, and I'm with Brian Popelmayer from Lockton Companies. Welcome Brian. How you doing? 
Brian Popelmayer: Hey, Dave, always good seeing you. 
David Millili: So tell people, how did you get into hospitality? 
Brian Popelmayer: Well, it's funny. So I've been in the insurance business for 23 years now, over that stretch, the first 20 years on design, the insurance under rank side. I did a lot of travel, had employees in 12 cities across the country, clients in pretty much every state. And then, about 12 years ago, got into the hotel side from an insurance standpoint as an underwriter, and then now as an insurance broker. And I love to travel with my family, love to travel for business, and the hotel space is so relatable. 
David Millili: Can you tell everyone a little bit more about Lockton companies?
Brian Popelmayer: Yeah. Lockton companies we're the world's largest independent and privately held insurance broker. We have 4 billion in revenues, 150 offices around the world. And for myself, I'm one of the unit leaders of our real estate and hospitality practice, and we have over 140 hotel clients on the books right now.
David Millili: We continue to hear hotel companies talking about how insurance costs provide an update on insurance marketplace and the casualty of lines of insurance. 
Brian Popelmayer: Yeah. So if you look at the insurance marketplace, it's continuing to evolve. You're probably hearing it here, talking to different hoteliers about insurance rates continuing to rise when you focus in on liability, so general liability, excess liability, casualty rates. We're continuing to see them increase. So if you go pre pandemic insurance costs for hoteliers, were roughly about 1.2% of operating revenue, they're now around 2%, right? So they continue to climb from a liability standpoint.
Right now we're seeing rates, still going up about five to 15%, depends on if you have a select service hotel, independent, right? Branded, full service, and maybe as high as 15% on the rate increase side. And we're also starting to see carriers exit the space, right? So it's important for us as specialists in the hotel sector to find those carriers that know the space well, find new entrants to make sure rates are driven down for our clients. But we're also seeing insurance underwriters start to exclude more coverages, which is problematic for hoteliers. 
David Millili: What are the liability exposures? The hoteliers are knowingly or unknowingly going to have to bear on coverage?
Brian Popelmayer: Yeah, I think when I talk about exclusions, some of the main ones right now are centered around various environmental pollution, fungus, and mold. And where that becomes a problem for hoteliers is if you have Legionnaires Legionella exposure, a typical general liability policy with a pollution exclusion, mold exclusion is not gonna cover that. And when I was on the underwriting side, we've paid out high six figure, low seven figure claims for those. And so without the proper coverages, mainly an environmental policy, you run bare on those risks. And then the other big driver right now is sexual abuse and molestation and human trafficking. We're seeing more and more insurance carriers try to exclude those coverages.
David Millili: Got it. So how can hotel owners management companies get the insurance that they need from abuse? And you were talking about, you know, sexual trafficking or just issues in general. 
Brian Popelmayer: Yeah, so I think that the biggest thing is sit down with a broker such as locked in. And kind of walk through what you're doing as an organization to prevent those incidents from occurring and what you would do if an incident does occur, that's a big thing for the underwriters on the insurance carrier side right now, is just getting their arms around what's the exposure for you as a Hotelier, and then for us to explain why you're better than most hotels out there and why they should cover that in their liability policies. Or if we have colleagues in London, and so we can go Lloyd's to London and get a sexual misconduct liability coverage.
And actually, I'll be in London in a few weeks talking to markets, however, if you're going out to buy that separate coverage, one thing I would recommend is to look closely at the policy wording because a lot of SML policies only cover hotel employee sexually assaulting a guest. When there's also exposure for a guest assaulting another guest. So we have solutions for that as well. 
David Millili: Alright, so what are you seeing in the property insurance marketplace right now? 
Brian Popelmayer: Yeah, the property insurance actually space is one of positive news, right? So we've had essentially since the last year, seven consecutive years of rate increases in the insurance marketplace. Specifically, the property. Now rates are actually softening in the property realm, and we're seeing for our clients anywhere from 10 to 20% rate decreases and for cap prone locations that had severe rate increases over the last seven years, we're even seeing decreases as high as in the 20% range.
David Millili: Other things that you in locked in the team at Lockton are doing to help hotel owners? Management companies control insurance costs and actually help protect the balance sheet. 
Brian Popelmayer: Yeah, I think the big thing for us in 2026 is we're trying to have our clients return to growth. And we're doing that by investing in technology and resources. So if you look at technology, we recently released a locked in real estate intelligence platform, and that platform allows us to, in real time, look at what rates are we seeing in the hotel space. What kind of coverages are our clients carrying? What kind of limits program structure, what insurance carriers are providing those rates?
So it allows us to be pretty flexible and quick for our hotel clients, both owners and management companies, to find them the best rates and start to drive costs down through loss control, our claims advocacy. So that's a big focus for us and our clients right now. 
David Millili: What have you been hearing from your meetings here at Hunter this week?
Brian Popelmayer: Yeah, I think the biggest thing for my meetings so far at Hunter are around sexual abuse, molestation, human trafficking. It's the first thing that most hotel owners and management companies are asking me about, and they're trying to figure out the solution for how to get coverage, what they should be doing as an organization. If you look in my home state of Illinois, the Illinois Hotel and Lodging Association is starting to drive legislation that's being stricter on proposing fines for hotel owners that aren't training their staff on. How to prevent human trafficking on an annual basis. 
David Millili: Yes. Two of us have met at a couple different events, couple different conferences. Why was it important for you to come to Hunter this year? 
Brian Popelmayer: Yeah, I think Hunter is one of those shows that we go to every year. It's well put on, it's a good group, large attendee population. You have C-suite individuals, you have both owners, management companies. It's very educational, but at the same time awesome to network and for us to further our relationships with our current clients and expand our relationships with future clients. 
David Millili: So before we wrap this up, what do you see? You've been at this many years. What's the biggest mistake that you think hoteliers make when it comes to insurance? 
Brian Popelmayer: Yeah. I think the biggest mistake is not knowing how the insurance process works, what information to give underwriters to make sure you're driving best in class rates, as well as best in class coverages. And just because you have a certificate of insurance that states you have general liability limits of a million, excess limits of 25 million that doesn't mean that all policies are the same, so you need to seek out a professional that can actually help you protect your balance sheet. 
David Millili: So let people know how they can get in touch with you, how they can find out more about Lockton.
Brian Popelmayer: Yeah, I could be reached on social media on LinkedIn or I could be reached directly at my phone number (216) 926-2054 or brian.popelmayer@lockton.com
David Millili: Alright. I love it when people give their phone number. That means you're confident. Well, that does it for another episode of The Modern Hotelier, the Most Engaged podcast in hospitality. We are here at the Hunter Conference in Atlanta. So whether you're watching or listening, we appreciate you and hope to be with you again soon. Thanks for joining us, Brian. 
Brian Popelmayer: All right, thanks David. And before we cut this off, just wanna say congratulations to Steve and his wife on the birth of their daughter.
David Millili: Thank you very much. Good. Yeah. We wish he was here. 
Brian Popelmayer: Yep. Missing. 
David Millili: Thank you.