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I'm not a lawyer, but was on a House Association which became incorporated to reduce our personal financial liability. It was my understanding at that time, that it was to protect our personal assets should the House Association run into financial difficulties. For instance, we were renting a house from a landlord and the chapter rented it from us. If the chapter was delinquent in paying rent and we, in turn, could not pay the landlord, we wouldn't be personally responsible because the HA was incorporated. If a HA takes out a mortgage and is not incorporated, then the people who signed those closing papers could be personally responsible for paying that mortgage. Incorporation protected us from losing our own house, credit rating, etc. because of problems with the House Association.
In a civil law suit, individuals can be named and therefore, if you are in a position of authority, you should consider a personal liability rider on your home owners insurance. And yes, the Fraternity's liability insurance only covers you if you're following all the rules. If a totally sober person falls down a flight of your stairs in your house, you're covered. If a minor who your chapter provided alcohol to falls down the stairs in your house, you're not.
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