Risk Management Insurance

[john1082]

The liability coverage that we have been able to obtain carries some conditions. The carrier has stated that if you engage in specified activities to reduce risk then they will ensure certain risks.

Some of the conditions are: (1) that the chapter must obey liquor laws (2) engage in a series of training sessions designed to reduce risk (3) conduct activities in such a manner as to reduce risk of injury / claim. If you don't follow the rules laid down by the carrier, you have broken the contract and there is no coverage.

With respect to the liability for falls, most of them are alcohol influenced. being drunk and falling seem to go together. Too much booze = claims.

Fire is very scary. Fraternity houses, as has been stated, tend to be older and in rougher conditions. There may have been modifications made to the house by the brothers that do not meet applicable building or fire codes.

To add to this unpleasant set of circumstances, there have been fires during the night following a party when the members and guests are sleeping it off. LXA had this very thing happen at Texas in the early eighties and a girl died of smoke inhalation. Alcohol may not start the fire, but it aggravates the problems with evacuation.

Kids in college do dumb things. Guys in fraternities sometimes do dumber things. An insurance carrier is in business to make money and they set their rates so that they will still make a profit after claims are paid. The low rate of return in the stock market (and low rates for other investments as well) dictate higher premiums to cover the lower yield on insco investments and the predictable claim payouts.

Risk management is a fact of business life today and GLOs are businesses. It is not negotiable with a carrier. Play by their rules or go without coverage. Violation of the LXA risk management policy led to the closing of Arizona State and UCLA, to name just two chapters that we've lost. I had the unpleasant job of telling our national board that Towson State had to be closed for risk management problems - very unpleasant duty.

If the chapter plays by risk management rules, I'm covered as a volunteer. If they break the rules I may be without coverage. A chapter advisor has every reason to push risk management as he or she is risking all that they have worked for should a suit be filed and the carrier declines coverage.

And oh yes, add potential crimional liability as well. Fullerton PD has promised me that I will go to jail if I'm present and there is under-age drinking, whether I am aware of it or not. In some ways, I am putting my license to practice law in the hands of eighteen year old freshmen at the chapter house every time they have a party.

That's reality. Harsh, isn't it.