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.

What is a third-party (i.e. in reference to a contract)?

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.

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 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.

What are your recommendations regarding BYOB?

We recommend that you contact your Headquarters about your organization’s policy regarding their BYOB policies. Each organization has their own policies regarding alcohol and events.

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.

What is your position on scavenger hunts?

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.