What is your risk management position on spray tanning at the chapter house?

We have had several questions about spray tan companies coming to the chapter house to offer their services to the residents of the chapter house. We recommend the following minimum guidelines for this practice:

  • Make sure the tanning area is tented and well-ventilated.
  • Just like with any independent contractor that comes on the chapter property, we recommend that you secure a Certificate of Insurance from the spray tanning company, as well as have a contract between the company and chapter. For more information, read this resource.
  • Only allow members to participate in the tanning activity; do not open the service to non-members or guests.

These recommendations also hold true for any other similar services that you might invite onto your property, such as a massage therapist, stylist, etc.

What is the risk management position on collegiate chapter members and chapter advisors serving on a local house corporation board?

Pursuit of strong risk management will sometimes get in the way of solid business practices. A prime example of this is the reluctance of a house corporation board to have either collegiate chapter members and/or chapter advisors on the board. The fear being the threat this could pose of not “fire walling” liability away from the HC of the chapter operations.

In that the chapter operations and house corporation operations are equally and jointly insured under your organizations national insurance policy, this should be less of a concern from a liability standpoint. We do believe that the increase in the communication between the two operations will be greatly enhanced, which ultimately provides for a healthier relationship between the two entities.

One possibility to help narrow this liability would be to have them as non-voting members of your local house corporation board and a minority in number. The local house corporation is taxed at running the most optimum business for its resident members/other members and using available resources to do so makes sense.

What is your position on hoverboards?

Due to the recent fire concerns surrounding hoverboards, we recommend that House Corporations prohibit the use and possession of hoverboards on chapter property.

Are alumnae allowed to stay at the chapter house overnight or for events?

From an insurance standpoint, alumnae are allowed to stay in the chapter house for controlled and specific events; however, they should be reminded that the same rules apply to them as to member tenants, including no alcohol, no male visitation, and that a House Director be on premises. We also recommend that the commercial kitchen be closed off for any event.

What is the insurance position on installing ATMs at the chapter property?

The current policy does not address the exposure of having an ATM on-site, however, the underwriters have not considered that as a possible exposure. Having an ATM would likely increase insurance rates because of the increased risks of burglary and theft. The safety of the residents is an additional concern, as unsavory characters could see that ATM as an easy target for theft and the members’ liability in their responsibility for it, should something go wrong. With the increased use of credit cards and online banking, as well as the abundance of ATMs in banks, on campus, in stand-alone kiosks and convenience stores, it is our recommendation that the risk isn’t worth the minor convenience that it might provide for your members.

We have an employee who was accused of a previous embezzlement at her prior employer. We have put in place strong controls with the employee to ensure that no funds are stolen. Is there anything else we should do?

The insurance coverage is very clear on this point. If you, as an insured, are aware of a theft, forgery, or other fraudulent, dishonest, or criminal act committed by this employee while employed by your organization, there is no coverage for this individual. If you chose to employ a person with a previous record of theft or forgery, he/she will need to be placed in a position where he/she does not have access to any funds. Additionally, if an insured becomes aware of a theft, forgery, or other fraudulent, dishonest, or criminal act committed by an employee involving money, securities, or other property valued over $25,000 prior to their employment with your organization, there is no coverage for this person under the Crime coverage.

Are there any concerns with collecting member or volunteer’s social security numbers?

We have been asked this question more frequently lately, and, yes, collecting individual’s social security numbers poses a huge financial risk to the organization. There are various levels of information that an organization can collect about its members, volunteers, clients, etc. Names and addresses make up the lowest tier of information. Social security numbers rank highest and must be properly secured. Most states have statutes in cases of data breach that obligate the organization responsible for collecting individual’s information to pay for notification costs and, often, credit monitoring for the individuals affected. We are finding that the average cost per individual in cases of data breach is around $217; multiply that by your number of members, and you can see why we are concerned about our clients collecting social security numbers.