New Member Orientation:Insurance & Risk Management Basics for New Members
Risk Management = Sisterhood Effective risk management is, at its core, a sisterhood issue.Looking out for one another and acting in each other’s best interests is part of what your fraternity/sorority is all about. It’s no surprise, then, that the right “risk management” answer to a question is almost always also the right “sisterhood” answer to a question.
Eliminate It! RISK If you can eliminate a risk, you should attempt to do so;however, it is often difficult to completely eliminate risks.
Reduce/Minimize ItYou can minimize risk with risk management policies (e.g. no alcohol in the chapter house, social planning guidelines, etc.)
Transfer It The most popular way to transfer risk is by purchasing insurance coverage, which transfers the exposure to risk to the insurancecompany, rather than your organization. Other means of transferring riskinclude requiring an entity to add you on as an Additional Insured to their
HOW DOES THE ORGANIZATION’S INSURANCE PROGRAM WORK?
PROPERTY COVERAGE The property that the [Fraternity/Sorority] owns at the chapter house.
PROPERTY COVERAGEThe property coverage that the organization purchases coversthe [Fraternity/Sorority’s] property, such as the furniture and kitchen equipment at the chapter house, for example. A member’s personal property is NOT covered by the fraternity/sorority’s insurance program. Members need to rely on either their parent’s homeowner’s insurance or a personal tenant’s policy to protect their personal property while living at the chapter house.
LIABILITY COVERAGEThe liability insurance is third-party coverage, meaning that it protects theinsureds (the Fraternity/Sorority, HouseCorporation, Chapter, Members, Volunteers, etc.) should they be named in alawsuit from a third-party . The venue where the party was held, as well as the injured parties, sue you, the [Sorority/Fraternity], the chapter, and many others. So long as you were At the party, a fight following the rules andLet’s say you serve breaks out and several policies of the as the Chapter people are injured. [Sorority/Fraternity], youPresident and plan would be protected by the organization’s insurance a party for your program. chapter.
Remember! Your [Fraternity/Sorority] has purchased the broadest coverage possible to protect you should you be named in a lawsuit due to your affiliationwith [Fraternity/Sorority name], so long as you are following the guidelines of the organization. Theliability insurance is third-party coverage, meaning that it protects the insureds (the Fraternity/Sorority, House Corporation, Chapter, Members, Volunteers, etc.) should they be named in a lawsuit from a third- party.If you are injured at the chapter house or during a chapter event, you will need to rely on your own personal medical insurance in case of an injury.
AUTOMOBILE LIABILITY COVERAGE If you drive your personal automobile on [Fraternity/Sorority] business and are involved in an accident, you will not be covered by the [Fraternity/Sorority’s] automobile liability policy. The [Fraternity/Sorority’s] automobile liability policy exists to protect the organization if it is named in a lawsuit involving an automobile, not individuals.
AUTOMOBILE LIABILITY COVERAGE If you take your car to school, your/your parent’sautomobile policy will continue to cover your personal automobile while you are away at school. If you do not take a car with you to school, you will want to ensure that you are still listed as a driver under your/your parent’s automobile policy, if you plan to drive any automobile while away at school. Several insurance companies offer “student away at school” discounts for this types of coverage, so be sure to check with your insurance agent before you leave for college.For more information about the organization’s automobile coverage, please refer to the Digging Deeper: Non-Owned Automobile <http://www.mjsorority.com> document on our website.
WHAT DOES IT MEAN TO BE HELD LIABLE? If you are found Responsible for Can I be sued? liable and some act or event Anyone can be suednegligent, you may that causes harm or for anything at have to pay damage to another. anytime. Even if the monetary damages suit is eventually to compensate for thrown out, you/theproperty damage or organization may stilldestruction, physica have to cover l injury, emotional significant legal feespain, rehabilitation and expenses. There and/or legal are so many specifics expenses. that go into answering that question that we cannot confidently answer it either “yes” or “no.”
TRUE OR FALSE?
A chapter member cannot be held for criminal activity due to herparticipation in a fraternity/sorority event.True False
Explanation• If a chapter member is accused of a criminal activity (e.g. hazing is a felony in 48 states), their affiliation with the fraternity/sorority will not protect them from criminal prosecution.
A chapter member is serving as the chapter’s “sober sis” for theevening, and she gets in an accident inwhich two people are seriously injured. The fraternity’s/sorority’s insurancepolicy will cover the chapter member’s liability. True False
Explanation• The liability in a car accident follows the owner of the car. It would depend on how the lawsuit was structured as to whether or not the fraternity/sorority would be brought into the lawsuit. ( See the previous slides on the automobile liability coverage.
Three chapter members have a party at their off-campus apartment. Thefraternity/sorority cannot be held liable for any claims that arise out of the party. True False
Explanation We often use the “duck analogy” when discussing official events - if it looks like a duck, walks like a duck, and acts like a duck, it’s a duck (i.e.• if an event appears to be a fraternity/sorority event, it will be construed as a fraternity/sorority event). Basically, in the event of a claim, you are leaving it up to a judge and jury to determine whether or not it was an official event. Furthermore, if there is a claim involving injury, the fraternity/sorority is seen as having the “deepest pockets,” and the claimant (and the claimant’s family and attorneys) will name the fraternity/sorority in the lawsuit if there is any possible way to draw the organization into the claim. Check www.mjsorority.com for claim examples.
If I sign a contract on behalf of my chapter/organization that hasunfavorable contract language, I might be exposing my organization to increased liability. True False
Explanation• Contracts often have unfavorable language that could put your fraternity/sorority at risk if a claim were to occur. For that reason, we recommend that you contact us prior to signing any contracts with insurance language and/or requirements. For more information, check out the Contracts 101 e-module at www.mjsorority.com.
Next Steps: Discuss some recent events that your chapter has participated in and the various risk management concerns at each event. Review the Insurance Summary available at www.mjsorority.com Check out and bookmark the hundreds of resources available at www.mjsorority.com Follow us on Twitter @mjsorority and LIKE us on Facebook!