Insurance and Risk Management Basics for New Members

1. New Member Orientation:
Insurance & Risk Management
Basics for New Members

2. 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.

3. HOW DO WE MANAGE RISK?

4.  Eliminate It!
RISK
If you can eliminate a risk, you should attempt to do so;
however, it is often difficult to completely eliminate risks.

5.  Reduce/Minimize It
You can minimize risk with risk management policies (e.g. no alcohol
in the chapter house, social planning guidelines, etc.)

6.  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

7. HOW DOES THE ORGANIZATION’S
INSURANCE PROGRAM WORK?

8. PROPERTY COVERAGE
The property that the
[Fraternity/Sorority]
owns at the chapter
house.

9. PROPERTY COVERAGE
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.
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.

10. LIABILITY COVERAGE
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 .
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 and
Let’s say you serve breaks out and several policies of the
as the Chapter people are injured. [Sorority/Fraternity], you
President and plan would be protected by the
organization’s insurance
a party for your
program.
chapter.

11. 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.

12. 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.

13. 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.

14. 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 sued
negligent, 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/the
property damage or organization may still
destruction, physica have to cover
l injury, emotional significant legal fees
pain, 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.”

15. TRUE OR FALSE?

16. A chapter member cannot be held for
criminal activity due to her
participation in a fraternity/sorority
event.
True False

17. 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.

18. 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.
True False

19. 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.

20. 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.
True False

21. 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.

22. 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.
True False

23. 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.

24. 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!

25. Contact us with any questions
www.mjsorority.com
888.442.7470
©MJ Sorority, 2012. For use with
permission only.