Risk mgt violation costs ASU big
 

A risk management violation involving alcohol, an underage girl, and a driunk driver may cost the brothers at ASU big time.

Appears that there was a rush function a couple of years ago. Girl has three beers and departs. She is crossing a street and is struck by a drunk driver. Her intoxication became an issue at the trial against the drunk and then the brothers at ASU who provided beer to the underage girl were brought in. Lloyds says no coverage for a risk management violation.

I have the article from Doug case detailing the incident if you're interested. Please drop me a note at JGezelius@msn.com and I'll forward it along to you.

We gotta be careful out there!!!

ZAX

John G

It's also posted/link in the Risk Management/hazing forum.

As a semi-newbie, I'm not aware of where the hazing info appears. Anybody got an address?

ZAX,
Bill Foltz
BO 130
Illinois State '77

Link?
 

This is the sue happy world we live in:(

3 beers and this young lady jaywalks and gets hit by a lawyer who had been drinking!

I wonder if they did a blood alchol test on her? Did she just try to short cut to get to a dorm or a Soro. House?

Granted she was under 21 the legal age forced on the states by the Federal Govy. or get state road funds cut off!:mad:

To hold the feet of the Chapter to the fire is ridiculous and
ludicrious but the nature of the beast into todays Risk Management World!:eek: These young men did nothhing that is nothappening all over the Greek World!:(

But we as Greeks take the brunt of it because we are Greeks!:eek:

Article from AZ republic
 

Arizona Republic
July 18, 2003

No insurance coverage for ASU frat that served alcohol before fatal hit-run

by Jessica Wanke

An Arizona State University fraternity lacks the support of its insurance
company in a $1 million settlement it was ordered to pay for its role in
the 2001 death of an incoming freshman.

On June 12, a Maricopa Superior Court entered a judgment to be paid by
Lloyds of London, the insurer of the Lambda Chi Alpha fraternity, as part
of a civil suit filed by the deceased student's family. The insurance
company is saying the fraternity's policy does not cover such an incident.

Only days before the fall 2001 semester was to begin, Jessica Woodin, then
18, left a party at the fraternity's house on "old row" after drinking
three beers, according to court testimony. And at about 2 a.m., Woodin
walked into Apache Boulevard against the McAllister Avenue crosswalk light
where she was hit and killed by drunk driver Mark Torre, a Phoenix lawyer.

During the trial in 2002, the subject of Woodin's intoxication came up as a
factor in her death.

After Torre was convicted and sentenced to 9½-years in prison, the family
began to look at the other parties involved in the incidents of Aug. 18,
2001. The Woodins identified the fraternity as one of the parties who were
partially responsible for their daughter's death.

In the settlement the prosecutors agreed to not collect the money from the
fraternity chapter or its members and now they are unable to collect the
money from the insurance company.

Executive vice president of Lambda Chi Alpha national, Tim Helmbock, said
the organization pays for a policy that protects its students against
injuries or accidents, but because the members at ASU violated the law by
serving alcohol to minors, they cannot be covered.

Mark Meltzer, the Woodin family's attorney, said that he has been dealing
with the fraternity's ASU chapter, their national headquarters and the
insurance company separately, but that the interests of all three are
intertwined.

The family's civil suit has several other defendants, including the law
firm Torre worked for and the two Scottsdale bars, Axis Cigar Bar and Z
Tejas Grill, where he and a fellow lawyer drank prior to hitting Woodin.
Meltzer would not say whether there were any other settlements.


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This is the text of the Arizona Republic article. I received it from Doug Case and the Fraternal News list:

isnt the whole point of having lloyds to cover us is in the event of a risk management violation? ive always been confused with our insurer, i thought as long as we paid the bill, we were covered.

Paying the bill isn't enough. Insurance is a contract. As part or our agreement with the carrier we agree to play by the risk management rules agreed upon by the fraternity and the insurer. Keeping up our part of the bargain means that we have to keep our promises, not just pay the tab when we get a bill.

If we break our promise with the carrier then the carrier can deny coverage. If we play by the rules and something bad happens then we are covered. If we don't play by the rules and something happens then we can be denied coverage.

I don't want the example to sound childish at all, rather, these are some basic concepts of insurance law.

An exaple might help. If you buy a house you will probably have some sort of general peril type of policy, commonly called a "Homeowner's" policy. One provision might be that it applies to non-commercial activity in your home; things like slip and falls for visitors, dog bites, that sort of thing.

If you engage in commercial activity in your home, such as seeing clients there, then the house becomes more like a commercial establishment.

If somebody slips and falls in a business the costs can be much higher. The carrier quoted you a rate for a home, not a business. If you tried to get coverage on the cheap by calling your business establishment your home then you might have a coverage problem.

How about the recreational breeding of pit bulls? Silly example, but if you bred pit bulls at home you might have a higher risk of dog bite injuries than if you had a single golden retriever. If you told the insurance carrier that you had a golden retriever and in actuality you had a backyard full of pit bulls then the risk would change and it could be said that you misrepresented the facts in order to minimize the risk (cost) to you.

Bottom line is that risk management is a risk reduction program designed to cut the liklihood of injury. That results in lower premiums. As it is the risk associated with insuring a college fraternity lies somewhere between insuring the Love Canal and Three Mile Island*. We don't need higher premiums.

John Gezelius
California, '78

* the Love Canal was a toxic waste problem on the east cost in the seventies. An entire neighborhood had to be purchased and torn down as part of the remediation effort. Three Mile Island is a nuclear power plant that had an 'incident'. The risk of ensuring a fraternity therefore lies somewhere between toxic waste dumps and nuclear power plants!

If Lloyd's isn't going to cover, then I would venture to guess that we will see ASU join NIU in having their charter revoked and the chapter closed.

They'll probably have to sell the property (if they do own it) to cover as much of the settlement as possible.

You would think that LXA would learn from Rutgers, Iowa State, and now this. Something tells me we'll see proposals to have LXA go dry at the next GA next August.

The actual settlement on this was $150,000 (or maybe it was $250,000); the negotiations began at $18,000. My husband discussed this case with the Lloyds' representative at his own fraternity's Executive Board meeting last month. The settlement was not the original $1,000,000.

I believe that we will see additional pressure to go totally dry at all events: Undergraduate, alumni, EVERYTHING. The undergrads will see all sorts of sanctions and the alumni will be pushed to be role models. What is worrisome is that anyone who opposes the proposal will be seen as obstructionist, non-visionary, old-fashioned - choose your own derogatory term.

Events such as this drive home the point that frat boys can't be trusted. Unfortunately, even though this event was an isolated event, that won't placate those who wish to further restrict the Greek community or even shut it down.

going totally dry is a bad idea. phi delta theta tried it and some friends i have in a phi delt chapter say that nationally, rush numbers fell, most chapters broke the rules anyway, and social events really hurt. and during rush, you dont go out and say that you drink, its pretty much just assumed when rushing a fraternity, however having to come out and say "we're dry" will turn away so many potential rushees. I dont want to hear the argument about how we have the best brotherhood and ritual, b/c i know that for a fact, but new guys wont know unless they join, and if being dry turns them away, then theyll never know. If something is proposed at GA, it wont pass, passing such a motion would be quite a blow to the national fraternity as well as chapters, and it could be a knockout blow too. to sum it up, going dry is a dumb idea!!!!!

I would preface my comments by saying that I'm not trying to pick a fight with anyone, rather, these comments are based upon 25 years or so of observing how the legislation is proposed at General Assembly.

Further restrictions on alcohol may well be proposed, and they will be moved forward, quickly. Debate may be spirited, but the Resolution will ultimately pass. Resolutions are seldom proposed without a firm lock on the requisite number of votes needed to pass them. Not supporting the concept, but that's how it works.

Should it appear that draconian measures will be a non-starter, a 'feel good' resolution will be proposed to suggest to those who pushed the initial measure that we really tried to do something.

Cynical? Perhaps. There are multiple dynamics involved. It may be too much of my Berkeley Poli Sci nature coming out in this analysis, tempered by several years in the intel business at the Pentagon.

John G

well, there was a motion proposed at the last ga about dropping the name fraternity to brotherhood, and that failed, so stuff is proposed without the needed number of votes to pass, no one at regionals liked that one. i dont think the make up of the active chapters now would pass any motion about going dry. all the brothers from other chapters get sick of talk about us going dry. im not trying to glorify alcohol, but im facing reality, its apart of the college experience, the fraternal experience, and people will go down in a blaze of glory to keep this fraternity non-dry. if any of you have been at a conclave or any conference, it shows that guys like their beer. also, ive been told by alumni that measures like this have been proposed before, and failed, itll do so now. we either lose a few chapters by them being stupid, or lose even more chapters by going dry, thats the choice.

im not trying to to get into some big argument about alcohol, im just strongly opposed to going dry, and i know itll do more harm then good.

The reason for going dry is very simple - insurance companies will not cover fraternities who have had big payouts due to law suits unless they have a "dry" policy in place. Without insurance, there can be no fraternity. It is working with some groups. Yes, there are many who disagree and some who refuse to abide by the policy; however, if they do not abide by the policy and there is an incident, the insurance does not cover them. It is just that simple! Would you rather change or see your fraternity go under because of one law suit which is all it would take if the insurance coverage is not there.

The name change was not a "paradigm shift" as going dry would be - I think that John is talking about those radical changes to the fraternity that don't make it to the GA floor unless the votes are locked. For example, the switch from pledging to associate members - THAT was a BIG shift in the way we operate.

What I see coming is a shift BACK to where fraternities were policy wise - alcohol has not always been a part of the fraternal existence. LXA was dry until sometime in the late 60's, I believe.

I'm not an advocate of going totally dry, but, the more ASU's that happen, the more it will become clear that we simply can't AFFORD not to be dry - that is where the pressure is coming from with several fraternities - and yes, many, like Phi Delts will have major problems getting the initiatives completely implemented - it will take time. Look at LXA and NIU - they still had the pledge philosophy, and I would suspect there are still chapters out there secretly engaged in that practice, not the AM experience we are supposed to do. But, it will make it easier to weed out those chapters that choose not to adopt new measures - it will make internal control more efficient.

It's a part of human nature to be not open to change. But, look where the fraternal world has come from when faced with "life-threatening" challenges: hazing - we've made tremendous progress, all GLO's. There are isolated incidents, but, it's not the widespread "accepted" practice that it once was. The 1960's - Vietnam - everyone kept saying fraternities would phase out with the culture changes the nation was enduring: we're still here. In loco parentis: we survived eliminating that practice. WWI, WWII, when greeks were for the most part shut down: we came back. The most dynamic and exciting thing about brotherhood is that it is adaptable, and overcomes obstacles- even our Ritual teaches that, among other things. I think LXA changing, and allowing alcohol onto chapter property and at events is something that will eventually have to change. Alcohol unfortunately a part of the college experience, but it doesn't necessarily have to be part of the Greek experience - we don't have the monopoly on beer bashes, nor should we: we should be adopting the practice of positive social experiences, not something inherently self-destructive. The ASU case will probably resonate as much as the Rutgers and Iowa State incidents of decades past. We must be willing to admit our mistakes, and sincerely try to mend our ways.

It is a Truism, "Animal House" Partys are out because of the very things mentioned above.

But, partys are equal to drinking. Granted years back most states or a lot of them had 18 as drinking age for beer. Partys are for socializing and relaxing and having fun. Not getting stupid drunk and driving a car or putting date drug in drinks.

But, again with the but, the risk management end of it has cost many Greek Organizations a lot of money.

I was at the chapter one time and there was several lets go out partys going on. Two of the Brothers were there as they were the designated driver for the night! I thought that was fantastic! I did not go party, I went with them to get Brothers back to the house! I got a lot of respect for them that night!:)

I think "The Going Dry" will pass, but, not to stop drinking per say. It is just saying do not drink in the house or where The Fraternity can be held responsable. Do not let anyone get killed or in a situation where it can happen!

It will come to past!

id rather not change and look at other alternatives in making sure guys arent stupid, but id bet willing to bet the fraternity becomes small if we go dry, rush will hurt, active retention will hurt. its not either go dry or no coverage, how bout we look at other companies? id explore other options first, so to answer your question, no, at this time, we dont change.

Sorry Bro. but why do you think that Lloyds is THE HIGH RISK Insurance Co?

We at LX Z have looked at a lot of avenues!

Liability, forget it! You wont be touched!:(

We did our own House Insurance as could shop around.

But for an overall view, Lloyds is The High Risk Co!

That is about it in a nut shell! Do you have your own House Ins. at the Block House In Lincoln??

When did LXA leave FIPG? Or are we still a member of that group that now uses Lloyd's for insurance purposes?

If Lloyd's is the LOWEST cost insurance that LXA and other's were able to get, there are no other alternatives for lower premiums, that's for sure.

LXAAlum, dont know if to many Insurance Companys would touch a Greek Org. In TOTO!:(

Well for Risk Management anyway!

But for individual Chapter buildings that might be different!

Lloyds has always been for high risk Ins. Of course they damn near went belly for the out lay of cash!:eek:

I remember that LXA joined many other fraternities in FIPG in the early 90's. I know that Sigma Chi departed FIPG a few years back, and haven't heard much of FIPG since - just curious if the organization still exists, and if LXA is a member.

Yes, FIPG still exists. An insurance rep just recently said that it is a ridiculous set up and was slapped together in order to put something on paper that insurance companies could say fraternties/sororities had to adhere to. Lloyds WILL deal - it depends on how good the national officers are who are dealing with them and how many incidents the group has recently had. There are other groups who will insure GLO's; however, premiums are going to be high no matter what. Everyone just has to suck it up and pay -- you can't not have insurance coverage. Anyone who believes that needs to get a grip. Are there any insurance people on here who can speak to this?

That FIPG was cobbled together in haste does not surprise me at all. At the time it went together the Greek community had reacheda point where insurers were slamming the door in our collective face. There was no way for the carriers to access risk and there were absolutely no conduct standards whatsoever.

From a carrier's standpoint it would be like insuring houses sight unseen, wherever they were and regardless of compliance with building codes. Or perhaps insuring drivers without knowledge of car type, location, or driving history.

The risk management standards that we have today flowed from FIPG. The procedures that we have concerning fire, deaths, arrests, etc. all were the result of FIPG and consultations with carriers - as well as some very hard lessons based upon tragedy.

We had to do something and FIPG seemed like the thing to do at the time. I still think that it is a valuable entity and could be more pro-active at times in dealing with things such as chapter house fire safety. I promise you that a burning chapter house is the scariest thing that comes to a chapter advisor's mind!

Without insurance we are collectively pledging our fortunes and that of our families that the undergraduates wil never make a mistake. That is too big a burden to put on the alumni and the families of the undergrads. Why do I say the alumni and families of the undergrads? Because they are the only ones with something to take. A judgment against an undergrad is worthless - try collecting on it years later...

Amen! You are so right. I was an advisor for many years and my husband is an advisor and a national officer. I have always prayed that we would never be the target of a law suit. The undergraduates need to understand the way it works. Just because they have an insurance policy in place doesn't mean they can do whatever they want. If they don't adhere to the policies, they are putting everyone at risk - including their parents.

Amen to what you both have said!:)

But sometimes trying to point out the responsability to the Young Men and Women is like blowing smoke in a tornado.

My chapter does a mentoring session each semester to work with and point out not only rushing, marketing, studying, but strong on Risk Management.

We are having a session the 23/24 of this month. The old house is to be torn down by the 18 th! New plans will be shown. But I hope when these are shown, they will understand the responsability that goes a long with it!

As to the Insurance company you are refering to, I never heard of it, so must go a long ways back! We have always done Lloyds to my knowledge! As far as the Chapter House, we go to an out source or our own contact Insurance Co.

no offense, but if you believe any undergrad group, in any fraternity will fully adhere to the policies, then thats just being naive. for instance, with auto insurance, no one follows their policy to the t, it happens, thats reality.

also, who on here said anything no insurance? howd this go from dry or not dry to insurance/ no insurance?

I know better than to expect collegiates to adhere to all of the policies - believe me, I'm not naive! However, I do recognize the realities - the insurance policy won't cover an incident if those involved were not within the policies. That is why the nationals have to have a large deductible fund - to not only cover the deductibles but to cover (if possible) what the insurance will not cover. Maybe no one except the national officers who actually deal with this in detail understand the reality but, believe me, it is a fact! If you were referring to not hearing of FIPG, I believe it stands for Fraternal Insurance Purchasing Group and it allowed the member groups to purchase insurance at a lower rate if they agreed to adhere to the policies set forth - which were pretty stringent.

Think about it from the other perspective - the General Fraternity - you could say the same thing - do you think the GF would tolerate a chapter/colony that refuses to adhere to all of the policies? Would they accept that kind of risk? No.

It's not naive - it's reality. Don't buy into the "it can't happen here" or "we've always done it that way, why change?" fallacies - all that will lead to is chaos.

Fraternities have existed as a vehicle to make their members better people by their association. "Builders of men," "integrity," "honor," are not empty phrases, but ideals we SHOULD strive to live by. We have collectively lowered our standards since the early 60's as a matter of survival, in my opinion, and we are now reaping the "benefits" of that strategy.

If we aren't going to abide or adhere to our standards that we were founded on, that haven't changed in almost 90 years, why do we even bother with the Ritual? It's not something to take lightly, by any member.

We as brothers should accept that as fact, yet also realize our members are human, and will make mistakes. But, the line on making mistakes is being drawn differently these days - there are honest "oops" mistakes, and then there are the "common sense should tell you better" or "we have a policy forbidding this - screw it" incidents that are REALLY getting us in trouble.

I have a lot more to contribute on this, but I need to get off the soap box before I reveal things I shouldn't, but, as a brother, I see this all tying back to Ritual, and we aren't doing what we swore to do when we were initiated. That is the root cause of many of our troubles, in my (ahem) humble opinion.