Our contract with the venue says that we have to add the venue as an “additional insured.” What does that mean?
Additional Insureds are specifically designated parties that have the same benefits afforded by the insurance coverage that you have as a named insured. This means that you will have to share your policy limits with any Additional Insured to your location.
The most alarming trend is the request for a non-insured to be added to your policy and given the full rights under the policy. In doing so, you forfeit the opportunity to sue this “Additional Insured” for their actions, which may have well been the only reason why a claim occurred. A classic example of this type of scenario would be:
The sorority chapter is hosting an event at the local park where you have contracted with a caterer to provide the food and alcohol for the event. The caterer is requiring evidence of your insurance coverage and wants to be added to your insurance policy as an Additional Insured.
For example, let’s say that the caterer was not practicing good risk management and over-served someone who became intoxicated and then assaulted another attendee at the function. Your insurance policy would be obligated to defend this caterer and potentially pay for any judgment against them. We prefer to have each party to a contract rely on their own insurance coverage and then rely on the “courts” to determine where negligence lies and ultimately where the liability rests for paying for injury or damages.
When we reference a “third-party” in our Certificate/Event Review Request Form, we are referring to any entity other than the parties to the contract.
For example, if you have a contract with a facility to host an event, your organization and the facility are both parties to the contract. If a separate vendor is providing the alcohol, they would be a third-party. It is important that the third-party meets your organization’s risk management guidelines. Check with your sorority headquarters to learn more.
It depends on what exactly is required by the specific venue and the nature of the event. We require two weeks’ notice for Certificate of Insurance/Event Review requests in order to ensure timely delivery. Completing the Certificate of Insurance Request Form in its entirety is the best way of ensuring timely processing of your Certificate request.
I have a Certificate of Insurance that I received for an event that we had last month. Can I use it again for an event that is being held next week?
No, MJ Insurance offers recommendations based on prudent risk management. Your national organization has the ultimate decision as to the approval of your event based on your organization’s risk management policies and the specifics of the event.
We do have a list of risky activities that we find very concerning. For more information, read our position paper on the topic.
We have developed a resource that will help you identify the common pitfalls that you should be aware of in dealing with contracts. The document, along with several additional resources related to planning events and contract review, can also be found in our website Library for future reference.
If I am injured during a sponsored event or at the chapter house, will the organization’s insurance policy pay for my injuries?
When a member or volunteer is injured during a sponsored event or at the chapter house, they need to rely on their own medical insurance to pay for their injuries, unless the organization is grossly negligent in causing their injuries. The General Liability policy exists to defend the organization’s members and volunteers should they be named in a lawsuit. It is not a substitute for a personal medical insurance policy.
We discourage the practice of scavenger hunts because of the inherent risks from both an automobile and general liability standpoint.
Some of the inherent risks include the following
For the automobile exposure:
- event requires speed to compete in the competitive event
- drivers may be traveling on unfamiliar roads/streets
- driver can be distracted by passengers excited with the “race” or hunt
- tendency for alcohol to be involved in the event
For the liability exposure:
- event requires participants to travel where they may not be familiar
- potential exists of hazing influence
- tendency for alcohol to be involved in the event
- many times the event has a fraternity as a co-sponsor and there is less confidence in the other organizations’ insurance coverage and risk management procedures
- liability waivers of responsibility that the participants may sign are less likely to hold up under challenge
In addition, many of our clients have policies that forbid scavenger hunts, so, as always, be sure to check with your specific organization before engaging in questionable chapter activities.
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.
Our concern with off-duty police officers is that it is unlikely that they carry their own General Liability and Workers’ Compensation coverage, so if something were to happen to them, the organization could be liable as the employer. We do not want to be in a position where an armed off duty police officer would be considered an employee of the organization, so a more practical solution would be to contract with a security company. In our opinion, security guards contracted by the organization should not be armed.
All Certificate requests must be submitted directly via this form at www.mjsorority.com. For more information on Certificates of Insurance, check out these resources that we’ve developed on our website: Certificate section of the Insurance Summary, Reviewing Contracts document, Certificate section of the website.