Miami Kappa Sig hazers lose $12.6 mil verdict

[HotDamnImAPhiMu]

Kappa Sigma won't go under. That's why they have insurance, to cover things like this. It's just like if I hit someone with my car and they sued me -- the money comes from insurance, not my bank account. (Well, except for later when my insurance costs become astronomical and I can't afford to feed my cat because I'm paying the insurance company so much money.)

Their headquarters is in Charlottesville, Virginia. I doubt they'll be sued. It DOES sound like the blame is being placed on the two guys -- wonder why them, though, and not the entire chapter?

[James]

The chapter president has a legal liability for the actions of the entire chapter. I have heard of a chapter president going to jail for something when he was out of state at the time of the incident.

Thats something that used to wake me up with cold sweats at night.

Originally posted by HotDamnImAPhiMu
Kappa Sigma won't go under. That's why they have insurance, to cover things like this. It's just like if I hit someone with my car and they sued me -- the money comes from insurance, not my bank account. (Well, except for later when my insurance costs become astronomical and I can't afford to feed my cat because I'm paying the insurance company so much money.)

Their headquarters is in Charlottesville, Virginia. I doubt they'll be sued. It DOES sound like the blame is being placed on the two guys -- wonder why them, though, and not the entire chapter?

[PhiPsiRuss]

Originally posted by shadokat
Wow...all of us will feel the effects in the insurance.

You don't know that, and that may not be even close to being true.

The reason why the FIPG is no longer the Fraternity Insurance Purchasing Group, is because sororities did not want to continue to subsidize the higher insurance costs of the fraternities in the FIPG.

We do have the ability to shield our insurance costs from the impact of other groups in our industry. That's a reason for the FRMT's existence. Many national fraternities would love to join the FRMT, but have a track record that would cause the cost to existing FRMT members to rise.

Originally posted by Rudey
I know we're in FRMT and I'm really interested in seeing how this all works with insurance. When we all join FRMT, what have we joined?? Does our insurance get pooled with others so if 20 of us put in 1 Million each and there is a $20 million lawsuit against a member fraternity that loses, will it be drawn from that?? That makes no sense so it can't be it but then what the hell is the FRMT? Is it a group to lobby for cheaper insurance costs?

I don't know how the financing works, but the FRMT is more than a lobbying group. It is a reinsurance group, and I forget exactly how reinsurance differs from insurance.

I e-mailed our FRMT rep with a question about this Kappa Sig incident, and if it will affect us. I should get a reply e-mail by Tuesday, and then I'll post the answer here.

ETA There's an explanation of what the FRMT is in this newsletter:
http://www.frmtltd.org/data/frmt_news/1997_fall.pdf

[AlphaXiGirl]

Originally posted by russellwarshay

The reason why the FIPG is no longer the Fraternity Insurance Purchasing Group, is because sororities did not want to continue to subsidize the higher insurance costs of the fraternities in the FIPG.

http://www.frmtltd.org/data/frmt_news/1997_fall.pdf

FIPG NEVER had anything to do with actually purchasing insurance. The sororities NEVER subsidized any part of insurance cost for fraternities in the FIPG.

In the early years, it was thought that the group could have its own insurance company but those plans were abandoned before ever being implemented. I think because too few groups joined and the cost was prohibitive.

[PhiPsiRuss]

Originally posted by AlphaXiGirl
FIPG NEVER had anything to do with actually purchasing insurance. The sororities NEVER subsidized any part of insurance cost for fraternities in the FIPG.

In the early years, it was thought that the group could have its own insurance company but those plans were abandoned before ever being implemented. I think because too few groups joined and the cost was prohibitive.

You're right. It didn't, but if it did, with sororities as part of it, the sororities would have effectively been subsidizing fraternities.

[KSigkid]

Originally posted by James
The chapter president has a legal liability for the actions of the entire chapter. I have heard of a chapter president going to jail for something when he was out of state at the time of the incident.

Thats something that used to wake me up with cold sweats at night.

i hear that...being fraternity president comes with a huge insurance policy for a reason.

kappa sig will not go under because of this; what the results are though, i don't know.

[Kevin]

Originally posted by KSigkid
i hear that...being fraternity president comes with a huge insurance policy for a reason.

kappa sig will not go under because of this; what the results are though, i don't know.

The sad (and scary) thing is that based on what we've seen from the chapters of most nationals (my own included), this kind of accident followed by a verdict like this could happen to any of us.

I know we say it all the time here, but there really needs to be a better self-policing of GLO's. I mean, we all say that we are now against hazing, but how many of us can say that and then claim that we know for a fact that no chapter of our frathernity hazes?

I hear talk at national conventions which tells me otherwise. It tells me that hazing is alive and well in my fraternity -- and that it's accepted by many as the norm as it has been for many, many years.

I'm at a loss for what possibly could solve this problem.

[DeltAlum]

Kappa Sig could fail in two ways if they lose this suit:

One, if they're self insured, as are many fraternities, they may not have $12 Million.

Two, again if they lose, their rates could go up so far that individual members would be priced out of the fraternity because dues could go so high to cover the insurance.

And it is almost certain to affect all fraternities because it makes us at least appear to be bigger risks. Thus, higher premiums.

[exlurker]

We may not know what effect this will have on insurance until after all the appeals -- which will most likely come -- are exhausted.
On Saturday or maybe Friday the Palm Beach Post had a story about the verdict. The article said that the dead pledge's family might try to collect from Kappa Sigma's $20 million insurance policy, and / or from the homeowners policies of the families of the defendants (worth about $800,000). Whether those insurance figures are accurate or not, I don't know.

And of course collecting might be difficult.

[James]

Further information says that Kappa Sigma as a national fraternity was dismissed as a defendant.

[exlurker]

Originally posted by James
Further information says that Kappa Sigma as a national fraternity was dismissed as a defendant.

Precisely. That's why it's hard for me to see how the family of the drowned man could collect anything directly from the fraternity's insurance.

[DeltAlum]

"The jury ordered Kappa Sigma president Travis Montgomery and another fraternity officer, David May, to pay Meredith's parents $6.3 million each. The parents' attorneys said they would tap the fraternity's insurance to collect the money."

Remember those huge insurance policies that chapter presidents (and advisors, etc.) have? Doesn't the fraternity buy them?

In these days when many of us don't put in claims for minor damage so our auto insurance won't go up, why is it difficult to undertand how this kind of judgement will affect chapter and nationals insurance?

[James]

Also keep in mind kiddies that neither the university nor the police department considered this incident to be actual hazing. Neither filed charges.