In order to maintain a positive and supportive environment within sororities, as well as manage the risk of escalation during disagreements, it is essential to establish effective mechanisms for dispute resolution among sorority members.

As the cost and administrative burden of litigation continues to grow, MJ Sorority supports the inclusion of binding arbitration clauses in membership agreements as a fair and efficient form of dispute resolution. Binding arbitration clauses are standard practice in many industries today, and if executed thoughtfully, can benefit both the organization and its members.

What is arbitration?

Arbitration is a formal method of dispute resolution that provides an alternative to traditional litigation. Overseen by a neutral arbitrator or arbitrators, parties to a dispute present evidence, make arguments, and are bound by the arbitrator’s decision, much like the formal litigation process. However, there are some important distinctions between arbitration and litigation. Arbitration is a private process and typically much more efficient. Additionally, parties to an arbitration choose the arbitrator presiding together, or in the case of a tribunal, each choose an arbitrator, who then in conjunction with one another, choose the third arbitrator on the panel.

How do arbitration clauses become relevant during a dispute?

Typically, arbitration clauses are leaned upon when one of the parties to a dispute changes its mind about using the arbitration process and wants to “have their day in court.” The court then looks to the original agreement to determine the validity of the arbitration clause and if the language of the arbitration agreement passes muster, the court will hold the parties to their agreement and send the dispute to a neutral, third-party arbitrator.

This is why arbitration clauses should be presented as part of an organization’s membership agreement, ensuring that there is a clear written record from the moment a member joins the organization.

What are the key components of an arbitration clause?

To ensure that arbitration clauses included in membership agreements are enforceable, a few key components should be present:

  • Specific language—The agreement should clearly outline what types of disputes will go to arbitration. The agreement must clearly state that signing the agreement means that both parties waive their right to recourse in court.
  • Meaningful choice—Courts want to ensure that all parties to an agreement have equal bargaining power. New members should be given meaningful opportunity to study and ask questions about their membership agreement, including the arbitration clause.
  • Notice/Acceptance—When implementing a dispute resolution program using arbitration, the contracting sorority needs to have a written record of putting their existing members on notice of the program, if applicable. Where possible, a sorority should collect assent to an arbitration program from existing members via signature. Inclusion of an arbitration clause in the membership agreement for new members satisfies these concerns.
  • Confidentiality—While arbitration takes place behind closed-doors, meaning that the proceedings are not open to the public, there must be an additional clear agreement to maintain confidentiality. It’s recommended that membership related offenses be handled internally to maintain the privacy of members and foster trust and openness in the dispute resolution process. Including confidentiality language in the arbitration agreement will bind parties to the to keep the process confidential.

Keeping these components in mind while drafting arbitration clauses will bolster their validity and ensure all parties have clear expectations of the arbitration process.

What are the challenges of binding arbitration? What concerns does MJ Sorority have with arbitration clauses?

When arbitration clauses first came into fashion in the early ‘00s, courts were mostly deferential to such clauses and did not entertain challenges to their validity. In the last 15 years, courts have become much more wary of arbitration clauses, in some cases, finding them unconscionable, meaning that they are held invalid.

Claims of unconscionability, while hard to win, are important to consider when drafting and distributing membership agreements with arbitration clauses.

What is the benefit of arbitration over mediation or traditional litigation?

The arbitration process is private, helping parties avoid potentially lengthy, public, and expensive litigation. Furthermore, unlike in mediation, the arbitration process authorizes a neutral arbitrator to make a decision about the dispute, including the arbitration award, which is then only confirmed by a court. Typically, the arbitration agreement will include language that waives the parties’ right to appeal on substantive grounds in a court of law, limiting costs for all involved.

What is MJ Sorority’s Opinion on arbitration for dispute resolution?

While organizations should examine arbitration laws in each state of chapter operation, binding arbitration clauses are generally recommended to be part of membership agreements. If used, these clauses should be carefully worded to be specific and reasonable to both the contracting member and the organization. Organizations must demonstrate that there is equal bargaining power between the contracting parties and that the language used is specific and unambiguous. Organizations should also put existing members that have not signed an updated membership agreement on notice of an arbitration program’s implementation and collect assent via signature where possible.

Further Information:

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The NPC community is working very hard to ensure that their organization represents diverse membership. An important dimension of this effort is the question of whether your chapter house is accessible to members and guests with a disability, be it a physical or a mental condition.

We have heard from several clients who expressed an interested in an accessibility audit, in which their chapter houses could be inspected to see where the facility could be made more accessible.

One question that has arisen is regarding doing the audit for a location and what liability may be created by doing an audit and not addressing the deficiencies identified for accessibility. This question, first off, needs to examine what liability in fact is being imposed upon sorority chapter houses, if any. The natural assumption is that disability accessibility is imposed through the Americans with Disability Acts (ADA). Please review our resource on this topic that illustrates that the ADA does not apply to fraternal organizations (aka sorority chapter housing).

However, there may be some local municipalities that have imposed similar ADA-like regulations which may or may not apply to the sorority chapter houses.

Therefore, with the lack of any applicable regulation(s) there is no liability imposed on the sorority chapter house. In the absence of any liability, if an accessibility audit is completed and for whatever reason any or none of the recommendations are not addressed, there is virtually little or no threat to your organization or the chapter house.

We do believe that there could be liability if there are promises made to a specific member or prospective member for a condition to be addressed, and the chapter ends up being unable to do so, which could potentially result in a contractual liability claim (also referred to as breach of contract).

Should you have additional questions or concerns regarding this subject, feel free to contact your Client Executive.

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One of the least understood federal regulations are those included in provisions of the American with Disabilities Act (ADA). This legislation was passed in 1990 to extend the civil rights protection prohibiting discrimination to persons with disabilities.
ADA addresses the three major areas of employment, government services and public accommodations. Title III of the Act specifically
addresses the requirements of a building that is subject to this legislation.

As with most federal regulations, they often times are not accurately used and such is the case with local governments and sometimes universities will use this federal regulation terminology to serve as a big stick in their community to lead others to believe that they must comply with the ADA. They state that certain new codes are ADA required when in fact it is not part of the legislation which deals with those entities that are eligible under the Act.

Before we can even comment on whether this can be an accurate statement, it begs the question of whether women’s fraternity/sorority (sororities) properties are even subject to this legislation. The answer to that question is a resounding no, as sororities are not subject to this Act for a variety of reasons, primarily the fact that sororities are considered “private clubs” and, as such, are not subject to this legislation. Should you desire to read more detail on why a sorority is not subject to ADA, refer to this Fraternal Law article.

Should you have any questions, please don’t hesitate to reach out to your Client Executive.

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Purpose of background checks

There have recently been several situations in which a university/college instructs and/or requires that all chapter advisors and house corporation volunteers submit to background checks. We would like to address the request for background checks from a risk management standpoint.

Background checks have long been used in the hiring process and are designed to protect existing employees, assets, members and other individuals with whom the employee may come into contact. A more recent trend has occurred where some type of background check is required for adults who work with young children, youth, or even young adults. “Background check” is a common term; however, there are two main types of background checks, each searching for different information and providing different results.

  • Criminal Background Checks: This will look into the criminal past of an individual, revealing such things as misdemeanors, felonies, and sexual offenses.
  • Credit Checks: A credit check will uncover an individual’s past credit history. This can include loans, mortgages, other lines of credit, and bill-payment histories. Credit reports will not disclose the nature of a problem, such as divorce, medical bills, job loss, etc. In order to qualify to receive credit reports, there are significant compliance hurdles as well as a set up fee.

Background Checks for Employees

Criminal background checks are considered prudent business practice for employees who have significant control over employer property and for those who manage physical and financial assets as well as any other employees. If you choose to run background checks, it is recommended that you develop a policy which would define the positions that are subject to background checks, as well as how you will act upon the information that is discovered during a background check.

We believe that this may yield some benefit to you in the process of hiring employees. However, we have reviewed our worker’s compensation, employment practices and bond claims experience and the claims that occurred with these employees would not have been predicted from the review of a background check. As a tool, it can be of use in specific situations of employment such as where an individual handles the expenses or the inventory of the chapter house property.

Background Checks for Volunteers

Criminal background checks for volunteers have been generally used when adults are working with minors. Because chapter advisors and house corporation volunteers for a sorority work with members who are almost exclusively adults (above 18 years old), this is less of a concern. We see many inherent issues with any requirement of the sororities to subject their volunteers to these types of requests. What is it that the requestor is hoping to achieve with the securing of background checks for the volunteers?

Critical points to consider:

  • The organization runs the risk of getting too much information, which if abused and not handled properly could develop into a violation of the volunteers’ right of privacy.
  • It would be administratively difficult, if not impossible to maintain any type of a current and accurate list of alumnae volunteers either serving as chapter advisor or as house corporation volunteers.
  • If said list is posted but later not maintained, your liability is increased should a volunteer’s name not be on the list and a problem emerge from her actions.
  • Alternatively, a posted list may increase the organization’s liability for a defamation of character lawsuit, should a potential volunteer feel that she was unfairly included on such a list
  • The cost to secure the background checks would be a significant financial burden upon the organization. Should the university take on this responsibility, it begs the question of why would they want to “invite in” greater liability?
  • The member groups have a good system in place to address behavioral issues of their collegiate members however we are less confident in the area of alumni issues. Should some disturbing information materialize from a background check, this may be problematic for the group to deal with the issue.
  • If a background check would yield some concerning information on a person, who makes the decision on the volunteer, the university or the sorority?
  • Should there be a volunteer who is not allowed to work with a chapter, what problems does this present to their status, as a member of your organization?
  • The only way to secure any type of a background check is to have the individual’s Social Security number. This is problematic for a number of reasons:
    • Volunteers may be hesitant to release this information
    • Any location that has the SS#’s of individuals has significantly increased their exposure to a data breach claim of this information which is referred to as Personally Identifiable Information (PII)
    • The costs associated with data breach allegations is substantial with the state law requirements of notification, providing credit monitoring services and the reputational harm to the organization
    • The Sorority community has worked very diligently these last several years to eliminate the need for our members SS#’s and this would undo that work and could put the organization at great risk.
    • Volunteers are often hard to engage and retain and the requirement for a background check may deter someone very qualified from volunteering.

The only instance in which we feel the benefits of getting a background check on a volunteer outweighs the risk is for any volunteer who is serving as a treasurer and has access to substantial funds of the organization. A modest credit check may reveal some prior behavior that should be noted.

However, we have also reviewed our past claims of volunteers and, once again, a background check would not have revealed any prior violations and therefore would not have prevented any loss or claims. What we find with these types of claims, primarily embezzlement, that it is an independent action due to current issues facing the volunteer. We do not often see “career criminals,” diminishing the effectiveness of this risk management tool for our clients.

It is our stance that background checks pose a substantial increase of risk to our clients and we are opposed to this requirement. We fail to see the need for this additional information and in creating this requirement the increased risks far outweigh any potential benefit.

Background Check Provider

IntelliCorp (Preferred Alliance Partner of Travelers)

Travelers, the insurance company that provides the workers’ compensation coverage for MJ Sorority clients, has partnered with Intellicorp to offer comprehensive and affordable background checks for Travelers customers. IntelliCorp is a nationwide provider of comprehensive background checks and employment screening solutions. Refer to this resource for additional information. Register directly via this site and contact your Client Executive for your policy number.

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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:

  • Unofficial houses are not owned by the women’s fraternity/sorority and are typically less safe
  • Residents do not believe that the rules of the organization extend to the housing arrangement, as they would argue that the situation is just a few sorority sisters securing housing on their own
  • In the absence of having an actual chapter house and with the majority of the residents being affiliated with one specific sorority, it is not too big of a leap of logic for the campus to construe this residence as the legitimate sorority chapter house

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.

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We are finding an increasing number of chapters using event planning companies/individuals to organize their social and philanthropic functions. While we do understand that planning for large events is often complicated and time-consuming, we are finding that many of the event planners that we have dealt with are not taking the time to review the contracts with the venues, often leaving our clients obligated to much more expansive and concerning liability and negligence verbiage than we are comfortable with in these contracts. In addition, because the event planner/s does not know your organization’s specific policies, we are finding that chapters that outsource their events to event planner/s are often not abiding by their fraternity’s or sorority’s policies regarding event planning.

Therefore, we are often finding that the chapters that engage the use of event planners believe that the event planner is handling all of the details of the event, when in fact, the event planners are not. When we are finally made aware of the situation (most often when a Certificate of Insurance is requested), it is often very late in the planning process, which makes it difficult to modify the contract or plan a different event, depending on the severity of the contract language.

If your chapters are using event planners, we would encourage you to make sure the event planners are aware of your organization’s event planning policies, as well as communicating to your chapter officers that they still need to verify that they are meeting your organization’s risk management policies even when they engage the use of an event planner. In addition, we recommend that when Certificates of Insurance are requested, that you provide both the contract from the event planner and the venue to us at MJ Sorority.

Should you have any questions or concerns, please contact Ruth Akers.

For example
An Event Planner signs a contract on your behalf with additional insured language, which obligated the Sorority to extend coverage to the hotel holding the event. The hotel used glass bottles to serve drinks, some of which were broken on and around the dance floor. A chapter member’s guest sliced his foot open on the glass and severed a tendon in his foot. Because the contract obligated the Sorority to add the hotel onto their policy as an additional insured, the Sorority’s insurance policy was triggered even though the hotel’s employee broke the glass that caused the injury.

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In 2007, Virginia Tech brought national focus on the need for campuses to set strategies to prevent and rapidly address mass violence. Since that time, there has unfortunately been several other incidents where gun violence occurred on college campuses.

This national scourge of gun violence has fueled extensive debate by state legislators about the appropriate course of policy action to mitigate the public safety threat that active shooters pose to the campus communities. Much of this debate has centered on the issue of allowing firearms on the college campuses, which up until most recently have been considered no guns zones!

Currently, there are nine states that allow concealed carry permit holders to bring guns on to college and university campuses. These states are Arkansas, Idaho, Mississippi, Texas, Utah, Wisconsin, Colorado, and Oregon. In contrast, twenty states have effectively banned firearms on campuses. This legislation, however, does not reflect the substantial change in direction of the state legislature’s advocacy taking place currently.
Women’s fraternities and sororities have long prohibited the presence of concealed carry hand guns on their property. This prohibition is not unlike other prohibitions that the house corporation property owners are at liberty to set as a private organization, such as no smoking, no candles, no halogen lights, no alcohol, etc.
We maintain that any legislation being considered is addressing specifically colleges and universities obligations only. We recently saw this play out in Texas with their recent concealed carry legislation, which specifically excludes private property such as fraternities and sororities.

The only exception, of course, would be if your chapter house is owned by the university and, in that case, you would be subject to the same housing requirements as if the university occupied the property. Therefore, as a private property owner of a sorority chapter house, you are in your rights to deny the presence of any concealed carry weapon by any member, employee or guest to your chapter house.

In order to make this clear to all, we recommend at a minimum the following risk management advice:

  • Incorporate this prohibition of concealed carry firearms in your housing agreements
  • Incorporate into other agreements covering non-resident members of the same prohibition
  • Post on your chapter/house corporation website the prohibition
  • Post signs at all entrances in English and Spanish to your building alerting visitors and guest to the prohibition
  • Incorporate into your employee handbook of thus prohibition
  • Incorporate both your physical building and to also include any automobiles in your owned parking lots

This is an evolving area of legislation, so it is important that you monitor any specific state legislative action to the contrary. We clearly have the university and college communities as allies as they too are very opposed to this requirement because they view it also as increasing a risk of further violence on their communities.

Should you have any additional question on this subject, feel free to contact your Client Executive at MJ Sorority Division.

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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:

The California Supreme Court, just a year ago, upheld the right of an employer to terminate an employee for violating the company’s anti-drug policy when the employee tested positive for the use of marijuana. The employee argued that he was allowed to use marijuana because he had approval to use marijuana for medicinal purposes in California…the [California] Supreme Court, however, readily recognized that ‘no state law could completely legalize marijuana for medical purposes because the drug remains illegal under federal law.’

Fraternal Law

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.

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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 a 24-hour job and this individual plays a substantial role in minimizing the exposure in the liability and property risks. 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:


  • Security issues with 18-21 year old women. A male house director, presumably, would have constrained use of the facility just as any other male.
  • 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.
  • Potential for the fraternity or sorority’s general liability policy to be responsible for any injury while on the premises. Unlike the volunteers and members of the fraternity/sorority, they can not recover both the medical payments and the bodily injury benefits. This becomes a huge issue for us because, in essence, we are taking a general liability policy which has been priced accordingly and turning it into a “health insurance” policy for the individual. The rate increases of health insurance coverage over the last five-six years could also become what we see in the General Liability area.
  • Potential exists that he could be construed as an “agent” (both as an employee and/or as a volunteer) of the fraternity/sorority and your policy would have to defend his actions.


  • 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 detrimental to a client’s loss ratio because the insurance company keeps claims involving children under eighteen open until the child reaches the age of maturation (typically either 18 or 21) for the state in which the injury took place.

The insurance underwriters do not support the presence of single male House Directors. In the case of a married House Director whose husband wants to live in the chapter house, we ask that you use the sample employment contracts on our website. 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.

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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:

  • Lessee is a single sex organization, not individual tenants.
  • Lessee must carry $2,000,000 General Liability coverage.
  • Lessee must include the House Corporation and the Fraternity as primary Additional Insureds.
  • Lessee must provide a Certificate of Insurance annually to the Landlord and MJ Insurance.
  • An adult supervisor needs to live on the premises.
  • Alcohol is prohibited on the premises.
  • Candles are prohibited on the premises.
  • Lessee must complete the MJ Chapter Self-Inspection form each semester.

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.

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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:

  • Designated driver programs that are organized and mandated by the chapter lead participants and other observers to assume that the chapter is ensuring the safety of the driver and the passengers. In actuality, the chapter does not have the capacity or expertise to ensure the safety of the participants. By organizing these types of programs, the chapter is welcoming any claims that may arise due to the designated driver program. On the contrary, friends (chapter members or not) who agree to pick one another up after an evening of alcohol consumption are simply helping a friend; when this practice becomes a chapter activity (advertised at chapter meetings, on Facebook, etc.) is when the liability for the chapter and Sorority/Fraternity become a concern.
  • Designated driver programs put the driver at undue risk for possible claims. Even the best drivers have accidents. If a chapter’s designated driver gets in an accident and people or property are damaged, the driver’s insurance will be the first to respond.
  • Designated driver programs typically do not screen the driver volunteers in order to ensure that the safest possible drivers are participating in the activity. A complete screening process would include gathering the following information, at the minimum:
    • The driver’s motor vehicle record, which includes information on their accident and driving history
    • Proof of the driver/vehicle’s insurance (with adequate limits)
    • The ability of the driver to handle the distractions associated with driving several passengers all evening
    • The willingness of the driver to remain sober on her designated evenings
    • The safety record of the automobiles being used by the designated drivers. A screening process for each chapter’s potential designated drivers would be difficult and timely to organize, and, even if a screening process does exist, it does not prevent all accidents.
    • Frequently, the designated drivers tend to be the younger women of the chapter because they are not yet legally able to consume alcohol. To an outsider, this practice of the older members calling the younger members to pick them up from a bar or party tends to look like hazing, which puts the chapter and Sorority/Fraternity at increased liability in the event of a claim.

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:

Claim Example

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:

  • Zeta Pi Sorority: the insurance company settled on the Sorority’s behalf with the plaintiff for $100,000
  • Bob and Linda Smith, Laura’s parents: settled with the plaintiff in excess of $550,000

*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.

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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:

  • We will not support adding the concession management firm to your policy as an Additional Insured, if the chapter members will be serving alcohol.
  • We will not support the request if the chapter members will be serving alcohol for the concession management firm.
  • We will support adding the concession management firm to your policy as an Additional Insured if it meets all other qualifications.
  • We will produce a Certificate of Insurance to the firm wanting to see the evidence of insurance if the event meets the above 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.

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