It can happen in an instant, but the results can be catastrophic. A passenger van shuttling guests from airport to hotel careens off the road, crashing into the center divider. Upon collision, the top-heavy shuttle rolls, ejecting unbelted guests from the vehicle. Policemen, firefighters, and paramedics arrive on the scene to perform immediate trauma care, transporting the most critical to the hospital. Even in the lucky event that there are no fatalities, the hotel owner’s exposure becomes subject to major scrutiny. Fifteen-passenger vans have long been the preferred choice of hotels looking to provide a cost-efficient means of transporting their guests. But, regardless of make, model, or passenger capacity, operating hotel shuttles present a significant risk for hotel ownership.

First, these cumbersome motor vehicles designed to transport passengers pose an increased safety risk that’s multiplied by each passenger and each piece of luggage in that vehicle. According to the National Highway Traffic Safety Administration (NHTSA), from 1997 to 2006, more than 1,000 15-passenger vans were involved in fatal collisions; among them, an average of 64 percent flipped.

Design flaws inherent to this class of vehicle are responsible for this increased risk of tipping. Studies conducted by the NHTSA have determined that placement of passengers and cargo within the vehicle can present center-of-gravity issues that contribute to rollover. According to collision data examined by the NHTSA, “15-passenger vans with 10 or more occupants had a rollover rate in single-vehicle crashes that is nearly three times the rate of those that had fewer than five occupants.” Improperly sized and/or inflated tires also have been linked to a significant increase in risk of collision and turnover. Finally, the bulk and scale of these vehicles can present considerable maneuverability challenges for an inexperienced driver, especially during inclement weather.

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Despite the many improvements made to the newest models—including stability control, tire- pressure monitoring systems, full passenger-side airbags, anti-lock brakes, rear-view cameras, and improved safety glass—more pressure has been placed on state and federal legislators in recent years to regulate the use of these vehicles. Insurance carriers, in turn, have examined their coverage offerings and tightened the requirements mandated within their policies. Many carriers are no longer offering coverage to shuttle vans with more than 10 passenger seats.

Whether a hotel chooses to offer shuttle services or not, the goal should be to maintain the highest standards for those within one’s care.

The prospect of a lawsuit arising from an accident involving a shuttle van full of hotel guests is indeed daunting. From vehicle safety and inexperienced drivers to ADA accessibility and a potential risk to guests and their property, there are countless considerations an owner or ownership group must examine before offering hotel shuttle services.

Whether a hotel chooses to offer shuttle services or not, the goal should be to maintain the highest standards for those within one’s care. Like any other risk a hotelier faces, a decision on how to handle that risk needs to be made. The options always are the same and fall into one or more of these categories: avoid it; reduce it; retain it; or transfer it.

Risk Avoidance

Not surprisingly, the simplest approach to reducing the risk is to eliminate the shuttle service altogether. In today’s digital age, hotel guests now can summon transportation options to their desired pickup location with the push of a button. In smaller markets that transportation network companies have yet to penetrate, the local taxicab industry can likely provide point-to-point transportation to a hotel. Not offering a shuttle service is the best way to avoid the liability and possible lawsuits associated with an accident.

Risk Reduction

Risk reduction involves any hotel policy or procedure that would reduce sources of potential liability. For any hotel that chooses to operate a hotel shuttle service, there are many ways to reduce the risk of accidents and follow-up problems arising from an accident. Examples of risk reduction can include:

  • Hiring more experienced drivers
  • Training all shuttle drivers in safety and defensive driving skills
  • Enforcing a strict policy for cell phone use for all drivers
  • Mandating pre- and post-trip inspections of the shuttle
  • Requiring seatbelt usage by all passengers
  • Refraining from placing cargo on the roof of the vehicle
  • Implementing a vehicle maintenance program that meets or exceeds the manufacturers’ recommendations—especially for the tires
  • Requiring shuttle drivers to have a commercial driver’s license or pass a driving certification course

Committing to a set of policies and procedures can significantly reduce the potential for risk and therefore significantly reduce the liability to hotel ownership. Following as many of these recommendations as possible is in the hotel’s and its guests’ best interests.

Risk Retention

Risk retention is acceptance of the risk and the potential liability arising from it, as is. It is the intentional and deliberate acceptance of future losses in connection with the hotel shuttle service. There are times when retention of risk, as is, can be accepted. Shuttle vans full of hotel guests should not be one of them. Planning and truly understanding the entirety of consequences as they relate to hotel shuttle services is critical when considering offering the service. Simply offering a shuttle service without any risk-reduction systems in place can lead to charges of negligence and even gross negligence on the part of ownership when there is an accident.

EXPLAINER

Indemnity Clause

An indemnity clause is a key piece of any contract. It identifies who is liable for what when liability arises from the agreement between the parties on the contract. These clauses transfer specified liabilities and third-party actions to the proper party. When deciding to outsource hotel shuttle service to a third party, it is extremely important that the indemnity clause be written with the utmost clarity. Indemnification agreements are completely independent of insurance coverages and exist to protect the hotel from the financial consequences of the third-party shuttle service’s actions. Due to the inherent nature of indemnity clauses, they are often the subject of post-risk event interpretation. This is why it is so important that they be designed with the utmost care and perspective. Left unchecked, an indemnity clause can be incredibly one-sided and push liability to the wrong party.

Risk Transfer

Risk transfer involves the contractual transfer of risk from one party to another. Transfer of liabilities related to a hotel shuttle service can be accomplished through a couple of methods. The first is through insurance. Hotel ownership buys an auto policy that properly covers the shuttle vehicle, and the limit of the policy is the amount of liability transferred to the carrier. The problem arises when the limit is too low for the exposure and an accident is severe enough to exceed the policy limit. Therefore, if the decision is made to spend money on insurance, it should be spent on proper liability and excess liability limits.

The second and less common type of risk transfer can be accomplished through a third-party shuttle service that assumes liability and performs transportation services on behalf of the hotel. An indemnity clause written into this contract most often is the legal mechanism whereby a hotel’s liability is transferred to the third-party shuttle company. However, it is essential that this contract be reviewed by an attorney—especially if the provider insists that it’s “a standard contract.” Making sure the third party has high enough limits on their policy is key. A contract and its indemnity clause are only as good as the money behind them.

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