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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.
HOW DO WE MANAGE RISK?
RISK
Eliminate It!
If you can eliminate a risk, you should attempt to do so; however, it is often difficult to completely eliminate risks.
Reduce/Minimize It
You 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 insurance
company, rather than your organization. Other means of transferring risk include requiring an entity to add you on as an
Additional Insured to their policy.
HOW DOES THE ORGANIZATION’S INSURANCE PROGRAM WORK?
Property Coverage
Liability Coverage
Automobile Liability
Coverage
PROPERTY COVERAGE
The property that the [Fraternity/Sorority] owns at the chapter
house.
The property coverage that the organization purchases covers the [Fraternity/Sorority’s] property, such as the furniture and kitchen equipment at the chapter house,
for example.
PROPERTY COVERAGE
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 the insureds (the Fraternity/Sorority, House Corporation, Chapter, Members, Volunteers, etc.) should they be named in a lawsuit from a third-party .
Let’s say you serve as the
Chapter President and
plan a party for your chapter.
At the party, a fight breaks out and
several people are injured.
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 following the rules and
policies of the [Sorority/Fraternity], you would be protected by
the organization’s insurance program.
Remember!Your [Fraternity/Sorority] has purchased the broadest coverage possible to protect you
should you be named in a lawsuit due to your affiliation with [Fraternity/Sorority name], so
long as you are following the guidelines of the organization. The liability 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.
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
AUTOMOBILE LIABILITY COVERAGE
If you take your car to school, your/your parent’s automobile 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 liable and
negligent, you may have to pay
monetary damages to
compensate for property damage
or destruction, physical injury, emotional pain, rehabilitation and/or legal expenses.
Responsible for some act or event that causes harm
or damage to another.
Can I be sued? Anyone can be
sued for anything at anytime. Even if
the suit is eventually thrown
out, you/the organization may still have to cover significant legal
fees and expenses. There are so many specifics that go
into answering that question that we
cannot confidently answer it either “yes” or “no.”
TRUE OR FALSE?
True False
A chapter member cannot be held for criminal activity due to her
participation in a fraternity/sorority event.
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.
True False
A chapter member is serving as the chapter’s “sober sis” for the evening, and she gets in an
accident in which two people are seriously injured. The
fraternity’s/sorority’s insurance policy will cover the chapter
member’s liability.
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.
True False
Three chapter members have a party at their off-campus
apartment. The fraternity/sorority cannot be held liable for any claims
that arise out of the party.
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.
True False
If I sign a contract on behalf of my chapter/organization that has
unfavorable contract language, I might be exposing my organization
to increased liability.
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!
Contact us with any questions
www.mjsorority.com888.442.7470
©MJ Sorority, 2012. For use with permission only.