Forty-two states and the District of Columbia have decriminalized marijuana or approved marijuana use for medical purposes, which obviously poses problems for women’s fraternity and sorority House Corporations and chapters regarding the use of a federally-banned substance on chapter property. From an insurance standpoint, we recommend that your housing and membership agreements require compliance with all state and federal laws.

Fraternal Law addressed medical marijuana in their September 2009 issue. In the article, Timothy Burke sited several recent court cases that would support our recommendation above:

Since that time, the courts have continually upheld the rights of employers over their anti-drug policies. The Chronicle of Higher Education addressed the use of medical marijuana on college campuses. According to the Chronicle article, “medical marijuana users at Humboldt State, Fort Lewis and other colleges are advised to live off campus and leave their medicine at home.” At a panel session during the National Conference on Law and Higher Education, “speakers on the panel here pointed out that the ‘federal trump card’ gives universities legal cover to ban marijuana use without fear of challenge under the Americans With Disabilities Act or similar state laws.” Colleges in Colorado, for example, which has approved marijuana even for recreational use, have the right to define what conduct is expected and permissible within the respective communities and campuses, on or off campus. The same is true for women’s fraternities and sororities.

Women’s fraternities and sororities have the same right and ability to require more prohibitive rules on their property than are required in non-sorority-owned housing. Just as women’s fraternities and sororities ban alcohol on their properties, so too can they ban the use of illegal substances. Experts agree that it is important for women’s fraternities and sororities to communicate well in regards to behavioral expectations with their members and volunteers upfront.

We understand that this is a difficult issue to tackle, and we want to help you determine how best to manage this risk. Should you have any further questions, please do not hesitate to contact us.

We are seeing an increase in an exposure that is not as we had previously presented to the insurance company regarding the type of the individuals who are serving as House Directors. The conventional understanding has been that the individual is a single female performing this function of overseer of the property on behalf of the house corporation and the chapter.

We are now uncovering an environment which is quite contrary to this scenario. We have seen examples of the following:

· Single Female with a child

· Husband and Wife Couple

· Single Male

· Husband and Wife Couple, expecting a child

The role of the House Director is to be the one individual who can be responsible for the management of the chapter house which includes, but is not limited to, the safety and security of the members and the physical property. This is indeed a big job that needs the time and attention given to it that only a single person can do. Having a husband or worse yet, a child on the property is, in our opinion a huge distraction, just on the issue of work performance alone, let alone the increased liability exposure.

The liability exposure is severe for the following reasons based on the type of exposure:

Male House Director:

· The resident members and general membership are women. Having a male in this position could create some safety and security issues.

· As a male, this person would be restricted from a number of areas within the house in which he has responsibilities. This would render him unable to perform all of his duties.

Male Husband not employed by the house corporation:

· Potential for this individual to be considered an “employee” of the chapter or house corporation and be eligible for what is 24 hour Worker’s Compensation coverage.

Child:

· Chapter property does not contemplate infants/children and all those associated concerns about safety of the child.

· Potential for the fraternity/sorority policy to become a health insurance policy for the child should he/she be injured while on the property. We

have had such a claim already from one of our clients who had a four-year-old in residence.

· Injuries to children are especially problematic when it comes to how insurance coverage applies. If the injured child is less than 18 years old, the claim basically remains open by the insurance company until the child reaches the age of maturation (typically either 18 or 21 years old) for the state in which the injury took place.

The insurance underwriters do not support the presence of single male House Directors. Though not ideal, in the case of a married House Director whose husband wants to live in the chapter house, we ask that you call your Client Executive for the sample agreement we recommend. We have one in which the House Corporation/Chapter is hiring both the husband and wife, and one in which the House Corporation/Chapter is only hiring the woman. Employing a House Director’s husband has not only far-reaching liability ramifications and workers’ compensation concerns, but it is also a matter of tax implications.

In addition, we cannot allow any children of House Parents/House Directors to live in the facility. We ask that no exceptions be made for this exposure.

We welcome your comments and hope to continue to keep our policy “contemporary” to the collegiate landscape as it changes. The above guidelines will be further refined after we have had an opportunity to gain some additional insight from our clients on this important matter.

We understand that this is a difficult issue to tackle, and we want to help you determine how best to manage this risk. Should you have any further questions, please do not hesitate to contact us.

The insurance company underwriters have accepted the sorority class of business based upon the exposures that are normally present for housing, such as member-only female tenants, no alcohol allowed on the premises and having a House Director live on the property. The coverages provided under your organization’s national insurance program have been designed and priced based upon these guidelines.

The House Corporation may desire, on occasion, to rent out the chapter property to a third party. There are certain parameters that must be in place in order for the insurance carrier to consider supporting the arrangement, which include the following:

Please contact us to discuss any potential rental arrangement you may be considering, and we can determine if the arrangement is acceptable from an insurance and risk management standpoint. We will talk through the plans, discuss the exposures involved and help you determine the best course of action and discuss other risk reduction/management techniques you may want to consider.

The one word that most aptly applies to a woman’s fraternity or sorority is the word “sisterhood,” defined loosely as collegiate women watching out for each other. It is this very value that has brought about the well-intentioned chapter programs referred to under a variety of titles, the most common being designated driver or “sober sis” programs.

Mother’s Against Drunk Driving (MADD) has encouraged better decision-making by individuals when drinking and driving. Collegiate young adults are typically less experienced drivers, and, statistically, this age group has a crash rate per mile that is four times higher than all other drivers according to the Institute for Highway Safety. As a result, we are seeing more and more interest in finding ways to keep young adults safe.

Many of our clients chapters have designated driver or “sober sis” programs, in which certain chapter members sign up to serve as designated drivers for other chapter members in hopes of providing safe transportation to and from the chapter house for those members who may be intoxicated. These types of programs are obviously very well-intentioned; however, from a risk management perspective, they surprisingly do more harm than good to the Sorority/Fraternity for some of the following reasons:

As a department, our position is this: we can only support designated driver programs when they are associated with an official event. In other words, from an insurance perspective, requiring various chapter members to take weekend evenings to stay sober and pick up other chapter members from the bars, parties, etc., is a no-no.

The following is a claim example that helps to give real-life substantiation for our position:

Background: The Lambda chapter of Zeta Pi Sorority had a “sober sis” program in which the chapter members would rotate the responsibility of staying sober for a few weekends a semester so that other chapter members would be guaranteed a designated driver on those evenings when they might need a safe ride home.

Scenario: Bridget Jones, Lambda Chapter Member, and several of her friends went out to the local bars for the evening. Because they had been drinking, Bridget called Lambda’s “sober sis” for the evening to come pick up her and her friends and return them safely to the chapter house. Laura Smith was the designated “sober sis” for that particular weekend, so she left for the bars to pick up Bridget and her friends soon after Bridget called. On their way home, Laura came to an intersection with a flashing red light. Believing that the intersection was a four-way intersection, Laura proceeded through the intersection after stopping. The intersection was actually only a two-way intersection with a flashing red light for one direction and a flashing yellow light for the other direction. The vehicle that was coming from the other direction did not stop because he had the flashing yellow light. Subsequently, Laura’s vehicle was struck by the vehicle coming from the opposite direction. Bridget suffered injuries to her upper body and face, none of which were life threatening.

Result: Bridget’s attorneys estimated her current medical costs at $250,000, and Bridget sued the following individuals and entities for over $800,000:

*The events described in this case study are based on actual events; however, the names, dates, and several other details have been changed for confidentiality purposes.

We have seen an increase in the number of requests from the collegiate chapters to participate in the concession area for an athletic event at the sports stadiums.The requests generally come about because the company managing the concessions wants the group to show evidence of insurance; thus a request to us for a Certificate of Insurance. From an underwriting standpoint, we have some concerns about this exposure and will work with each request to minimize the ultimate liability to your organization. Below are some specific guidelines:

Fortunately we are finding that the concession management firms will work with the participating chapter and will enlist their assistance for areas other than the alcohol sales of an event.

We bring this to your attention not only to point out a trend of increased requests, but also to inform you of several recent lawsuits, which supports our underwriting position on this fundraising activity.

If the person selling the alcohol was an employee of the beverage provider, then the litigation trail and liability stops there. However, if the individual who dispersed the alcohol was involved in an organization like a sorority, then there exists a very strong probability that that organization would be brought in to the lawsuit (see here and here for examples). Hence, our fear about the ultimate liability of not only the local chapter, but also the national organization would be at risk.

We encourage you to communicate these risk management guidelines within your organization to ensure that each activity being considered is addressing the many different risk exposures.

Should you have any questions or concerns on the above information, feel free to contact your Client Executive.

One of the more challenging exposures of writing a women’s fraternity or sorority is keeping the insurance and risk management recommendations “contemporary” to the changing dynamics of a campus women’s organization. As the size of the chapter increase in membership numbers, more and more sorority sisters are gravitating to alternate housing where several of them may live together. On those campuses where sorority chapter houses are not as common and/or a sorority does not physically have a chapter house, it has been common for some of the sorority sisters to secure housing together.

Irrespective of the reason, the number of “living arrangements” outside of a traditional chapter house is increasing and are being referred to and/or being considered by the campus community as the “X Sorority” chapter house. We refer to these locations as unofficial houses.

These unofficial houses pose a number of problems to the national organizations and, ultimately, to the insurance
coverage. The concerns include the following:

We have seen a significant increase in claims that are coming from those locations that are not the actual chapter house, but instead from these unofficial houses. We have identified this concern to your national leadership. We also know that, as a volunteer, you are more apt to be aware of the existence of these types of housing arrangements. Should you have one of these types of arrangements on your campus, we would ask that you bring it to the attention of your leadership. Upon their review, we have encouraged them to involve us, if needed, in addressing the housing situation specifically.

[See this article from Fraternal Law titled “Dormant Chapter Houses” for additional information]

Here’s the scenario: a Chapter Advisor calls us and explains that several chapter members have come to her concerned about a fellow chapter member who is exhibiting signs of a severe eating disorder. The Chapter Advisor asks us what to do to avoid any allegations of infringing on the chapter member’s privacy. We receive calls similar in nature to the fictionalized scenario above at least once a week. The individual calling typically sites concerns of violating the Family Educational Rights & Privacy Act (FERPA), a federal law that protects the privacy of student education records. Although the legislation originally passed in 1974, FERPA has received increased attention more recently following the tragic events at Virginia Tech and the shootings in Arizona. There are a few key facts about FERPA that are especially important for our clients’ leaders and volunteers to keep in mind:

We encourage you to familiarize yourself with your organization’s risk management policies and procedures when a member’s health is at risk. The leaders of your organizations have gone to great lengths to equip you with the resources and tools to know how to handle these types of situations. In emergency situations, we also encourage you to contact the appropriate University officials. Most campuses have trained individuals on staff that deal with emergency situations day-in and day-out.

In 1996, NPC adopted a unanimous resolution regarding peer monitoring.  The resolution states that member groups should refrain from serving as Panhellenic and Greek enforcement officials at social events and that the NPC expects its member groups to resist pressure from university personnel for their members to serve as social event peer monitors.

The resolution was adopted due to concerns that the monitors were not trained and that monitoring imposes a duty of enforcement that cannot be met, which creates a duty where heretofore none existed, therefore imposing negligence on participating groups and the fact that the universities are not indemnifying the monitors for his liability.  There was also some concern about the possibility of one group’s member retaliating against another group for some prior allegation of rule breaking.  NPC’s legal counsel and insurance carrier have advised against peer monitoring.

Since the adoption of this resolution, many universities have attempted to persuade NPC groups to participate in peer monitoring or party checking.  Recently, a question was posted on the AFA listserve regarding peer monitoring and party checking.  Interestingly enough, Mitch Crane, an attorney and member of Sigma Phi Epsilon Fraternity, posted the following response, which goes hand-in-hand with NPC’s resolution:

In most cases, monitors were lax under fear that their own chapters would be sanctioned in return if they enforced the rules.  On two cases, men were threatened physically.  There certainly are some institutions where this type of monitoring appears to be effective – but it takes mature and brave men and women to do it.

Another issue I have raised is the fact that in almost all cases the party monitors are not covered by liability insurance – this puts liability on the individuals and/or the uninsured councils.  In the few cases where the councils and the party monitors are on the institutional liability policy, there is a great exposure to suit if the monitors do not do their jobs properly or if they come and go and an incident occurs later in the evening.

Purely from the point of view of enforcing policy and also protecting oneself from suit, any monitoring of parties should be by the campus police or by another law enforcement agency and not by undergraduates of fraternity and sorority advisors.

We certainly support an organization’s responsibility to hold their own members accountable for appropriate behavior.  To that point, we are in complete agreement that monitoring of social activities outside of one’s own organization should be done by an insured third-party.  You should continue to decline any university request for participation in peer monitoring or party checking activities.

What has emerged since that time is a “modification” of the actions expected under a peer monitoring system.  This comes in the recognition of the flaws of the prior system and an acknowledgement that a modified system, now being labeled “peer observing” could be appropriate within the Greek community. In several recent situations, university professionals were not looking for this to be a group to group enforcement practice, but simply an expectation that each group is responsible for its own self-governance or its own monitoring of the activities.

In that the term “Peer Monitoring” has taken on several different meanings, it may be wise to create a new term which draws from the goal of this practice, which we believe to be that each group is accountable for the actions of its members.

As such, we are inclined to consider this practice differently and would be supportive of a “refreshed” look at the practice and the potential for embracing a new policy on how to achieve the accountability that is being sought of the member groups.

As conditions change, it is important to take another look at how exposures are evolving and the “reform” initiative discussion should effectively accomplish this for our clients.  We wanted to share the risk management and insurance perspective to assist your leadership in tackling this critical challenge.

We understand that this is a difficult issue to tackle, and we want to help you determine how best to manage this exposure. Should you have any further questions, please do not hesitate to contact us.

We are often asked about the worthiness of using liability waivers by our clients. In the past, under the advice of legal counsel, we have taken a somewhat ambivalent attitude toward encouraging our clients to have their members sign waivers or requiring that non-members participating in chapter events sign waivers as we were concerned that the waivers wouldn’t stand up in court.

However, over the past several years, there has been a shift in case law that has caused us to reconsider our position on waivers and releases. This, coupled with the dramatic increase in liability incidents and claims among our clients, has caused us to re-evaluate our position. Our research and the advice of legal counsel now indicates that participant waivers/releases may be advantageous for our clients in two ways prior even to the test of court:

We are now encouraging our clients to utilize participant waivers (both for their own members and for events sponsored by the Fraternity/Sorority with non-member participants) for the following types of events:

We have developed a participant waiver/release template for our clients’ use. Please be sure to read through the waiver in its entirety and make necessary edits so that the waiver applies to your specific event. You will see examples and further information in the footnotes of the waiver/release template.

Once the appropriate waiver has been drafted by included the requested information in the template form, waivers may be distributed in paper or electronic format. If distributed and collected as hard – copies, chapters should either keep the paper copies or scan and save as an electronic file in accordance with your organization’s document retention policy. It’s important that chapters not go to all of the effort of collecting signed waivers to simply dispose of them the day after the event as claims often come much later than that.

A potentially better option is to use a web-based liability waiver platform that will help your chapters create and distribute waivers to participants and then save signed waivers in a searchable database. There are a few websites that offer this. One such company that we recommend is SmartWaiver as we believe that the waiver creation and distribution process is relatively seamless and pricing is reasonable and upfront.

For additional information, please refer to the article published in Fraternal Law (link). Should you have any questions or concerns, please contact Estacia Brandenburg, JD, MJ Sorority Client Executive.

As with any non-profit organizations, finding and retaining volunteers can be a difficult task. In addition, an effective organization has a path way for these great volunteers to be able to contribute and rise up the ranks of leadership. All too often, the complex question arises of “whether a volunteer can continue to serve as a local alumna for a chapter or a house corporation once they also assume a national leadership role?” There are two distinct answers to this question.

The first answer is a rejection of this dual capacity service of an alumna. The primary issue is a concern that the national officer may expose the national organization to liability for local entity’s actions, subsequently forfeiting the defense of ignorance of the local entity’s operation.

The second answer – and the one that we think more appropriately applies to the women’s organizations – is that the threat of increased liability from this dual capacity is offset by the distinct advantage that we believe comes from a national officer continuing to provide leadership to the local entity be it a chapter advisory board or a local house corporation board. We see this leadership as a positive for both the national and local entities.

Ideally the national officer should be freed up to focus on this important national position that she has been appointed or elected to do for her sorority. A new volunteer can be added to your ranks to fill the local volunteer position. If this is not possible, then there should be no hesitancy to allow the dual-capacity position of your national officer.

Two members attended a semi-formal event in which alcohol was served by a third-party vendor. Both members were over 21 and reportedly had been drinking at the event. It is believed that they were walking home from the party and became disoriented and lost. One member tripped and fell as she walked into the street. The other member tried to help her up, when they were both struck by a car. One member was killed and the other member sustained serious injuries.

At this point, no charges have been filed against the sorority; however, the statute of limitations in the state in question has yet to expire.

Issues to address:

It is very common for third parties to request a Certificate of Insurance that proves the fraternity/sorority or chapter has purchased insurance coverage.  This request can be satisfied by obtaining a Certificate of Insurance that shows your limits and coverages.  When a third party asks for evidence of your insurance, you need to complete the Certificate of Insurance Request Form in the appendix of this document or complete the Certificate of Insurance Request Form on our website.

Is there a contract that you have to sign that contains insurance and indemnification requirements?

If yes, do not sign the contract until you have contacted Ruth Akers at MJ Insurance. If you sign the contract, you may unknowingly be obligated your organization to unfavorable liability and/or indemnification requirements that could put your organization in jeopardy.

If you are unsure if the contract contains insurance requirements, look for the following verbiage examples:

While these examples are the most frequently used phrases that cause us concern from an insurance standpoint, contract language is often complicated, so it is always better to be safe and send the contract to Ruth Akers for review.

If a third-party is requiring Additional Insured status, they are looking to your organization’s policy to defend them and pay claims on their behalf, even if they are negligent in causing a claim. 

Additional Insured requests relating to social events are heavily scrutinized; therefore, it is important that you allow two weeks to allow for the necessary parties to review.

Request a Certificate of Insurance via this form on our website.

The below suggestions are recommendations only, not requirements.  The information below should be kept on file for your records.  We do not need copies of this information.

Please refer to your organization’s risk management policies for specific conditions required by your fraternity/sorority.

When you rent an establishment or engage the services of someone, it is recommended that you obtain a Certificate of Insurance to ensure they have purchased insurance for their operation.  If the third-party vendor does not have insurance, then the fraternity’s/sorority’s policy may have to respond, which is not preferable.  Your agreement with a third party vendor will dictate what coverages should be represented on the Certificate of Insurance.  For example:

As a guideline, the following limits of liability are a minimum that you should accept from a third- party:

We have established the above minimum recommendations for the following reasons:

A red flag should arise any time a contractor or venue shows resistance to or hesitation with these minimum limits of insurance, and you may want to reconsider your arrangement. In our experience, if a contractor or venue refuses to provide proof of adequate insurance limits, it is because they do not have any insurance, not because they do not have adequate limits.

Any time a chapter contracts with a venue, contractor or any third-party for services, it should be clear that each party is responsible for the consequences of their performance and/or work and the conditions under which the service will be rendered. This contractual relationship exists so those who are in the best position to control the exposure are also the most likely to incur the liability for those incidents that may occur. In an ideal world, each party’s insurance policies would respond to the extent that they are negligent in causing either property damage or bodily injury. The essence of this risk management technique is to transfer the liability to the entity/individual the most able to control the exposure. Establishing a minimum expectation is a reasonable effort to ensure that this transfer happens and that you are doing business with a professional and reputable entity or individual.

Does MJ Insurance approve events?

No, MJ Insurance offers recommendations based on prudent risk management.  Your National Organization has the ultimate decision as to the approval of your event. It is important that you review the rules and policies of your national organization before you begin the event planning process.

I have a Certificate of Insurance that I received for an event we had last month. Can I use it again for an event that is being held next week?

No, Certificates of Insurance are all issued on an event specific basis; therefore, each time someone requests a Certificate of Insurance from you, you must obtain another Certificate of Insurance. Furthermore, the venue/third-party requesting the Certificate of Insurance will want to be sure that their name is listed as a Certificate Holder on the Certificate of Insurance, which is another reason why Certificates are issued on an event specific basis.

I have an Insurance Overview that shows we have coverage. Can I use it when I am asked for a Certificate of Insurance?

No, the Insurance Overview contains specific and confidential information regarding your chapter and should not be shared with anyone outside your organization.

How long does it take to process a Certificate of Insurance?

It depends on what exactly is required by the specific venue and the nature of the event. We recommend that you submit requests two weeks in advance in order to ensure timely delivery, but we are happy to help you with Certificate requests at any time. Completing the Certificate of Insurance Request Form in its entirety is the best way of ensuring timely processing of your Certificate request.

We are renting a venue that will be serving alcohol. Is evidence of their state liquor license sufficient?

Each state has very strict guidelines for businesses who are licensed to sell alcohol, and we certainly recommend that you only use businesses that have a current liquor license. However, it is equally if not more important, that you require evidence of the business’ liquor liability insurance coverage, which is separate coverage from general liability insurance and will have a separate limit of liability. For much more information on this issue, please refer to our position paper.