2016 Spring Insurance and Member Safety Bill
How and when does my chapter receive its Spring Insurance and Member Safety Bill?
Chapter officers and volunteers will be emailed a copy of the bill and supporting letter in early January. It must be paid by February 20, 2016.
What is the new charge for the Spring Insurance and Member Safety Bill?
As a result of significant premium increases incurred, all chapters will see an $8 increase to the per man member fee (from $141 to $149) for the 2016 Spring Insurance and Member Safety Bill. The $550 chapter base fee will remain the same.
How is my chapter’s Spring Insurance and Member Safety Bill calculated?
SigEp’s Spring Insurance and Member Safety Bill covers the cost of our insurance program and services that help chapters create a safe and healthy environment.
SigEp’s insurance program is created for and funded by all SigEp chapters. Chapters will pay a $550 chapter base fee as well as pay $149 per man (as reported on your Periodic Membership Report filed in March, 2015). Sigma Epsilon Chapters (SECs) that are less than two years old pay a reduced rate of $275 per chapter and $74.50 per man. This discount is provided to SECs as they inevitably carry additional, required expenses as a new chapter that others do not such as Ritual equipment, chartering banquet, chartering retreat, etc.
Here is an example of how a 70-man chapter’s 2016 insurance fee would be calculated:
($550 chapter base fee + $149 X 70) = $10,980
Why is my chapter paying more than other SigEp chapters?
There are two ways that a chapter might pay more than other SigEp chapters: if they are late in paying their Spring Insurance and Member Safety Bill or if they have had a claim in the last three years.
1) Late payment
Failure to pay the entire balance by February 20, 2016, will result in a 5% surcharge of the remaining balance.
2) Recent claims
Chapters will be assessed an additional charge (surchage) for up to three years after an insurance claim is filed against their chapter. The amount of the surcharge is set by the size of the claim. The surcharge assessment has been increased to minimize the burden on chapters that avoid claims by abiding by SigEp's risk mangment policies. The claim surcharge model is:
$0-$24,999 claim payout/reserve = additional 5% of spring bill
$25,000-$49,999 claim payout/reserve = 15% of spring bill (was 10%)
$50,000 - $99,999 claim payout/reserve = 20% of spring bill (was 15%)
$100,000 + claim payout/reserve = 30% of spring bill (new increased surcharge level)
Note: A surcharge is placed on a chapter’s record for three consecutive years after the claim is made.
What are the discount opportunities on the Spring Insurance and Member Safety Bill?
To reward chapters that are operating safely and adhering to SigEp’s risk management policies, the National Board of Directors has revamped our discount model:
• Chapters with no risk management policy violations or sanctions on their record from January 1, 2015 to December 31, 2015, will receive a 3% discount of the total amount.
• Chapters who received a Buchanan Cup in 2015 with no risk management policy violations or sanctions on their record from January 1, 2015 to December 31, 2015, will receive an additional 2% discount for a maximum discount of 5% of the total amount.
We eliminated previous discounts to directly incentivize behavior that reduces claims that have caused these fee increases.
How will a chapter know if they are eligible for the discount?
The discount will be calculated and shown on your chapter bill.
What constitutes a policy violation and sanction?
A policy violation occurs when the chapter violates one of SigEp’s or the university’s risk management policies. The violation is determined by SigEp, the university and the insurance company. For example, if a chapter purchases alcohol with chapter funds that is a direct violation of SigEp's risk management policy #2.
Sanctions are actions taken to discipline a chapter creating unnecessary risk when they violate a risk management policy or the university’s conduct code. They can be given to the chapter by the university, governing body, and/or national Headquarters. Sanctions can be educational (i.e. required risk management training) or punitive (i.e. placing a chapter on social probation for a specified period of time).
Sanctions levied for procedural violations of policies or procedures that do not relate to member safety (i.e. recruitment violations, campus posting policies, etc.) do not impact the chapter’s eligibility for the insurance discount. However, events or behavior that violate SigEp’s risk management policies but do not solicit a sanction from the host institution or governing board can impact the chapter’s eligibility at the discretion of the Fraternity staff.
Member Safety Education and Support
How can my chapter provide a safe and healthy chapter experience?
As a chapter leader, you control the quality of the members in your chapter. Recruit brothers that embody Virtue, Diligence, and Brotherly Love and you will minimize the likelihood of destructive behavior existing in your chapter.
Make sure all members fully understand SigEp’s risk management policies and hold them accountable to them.
To learn about these policies and supporting resources, please visit our member safety page. Additionally, reach out to Risk Management Director Kathy Johnston at firstname.lastname@example.org with any questions.
Why is member safety education so important?
Nothing is more important than your health and safety. SigEp wants its members to have a quality fraternity experience and your safety is critical to this end. Therefore, SigEp is committed to providing essential educational resources and support to enable chapters to be successful in creating a safe and healthy environment. We also want members to understand that violating these policies can void insurance coverage.
Why did SigEp make changes to the current risk management policies?
Our staff revised these policies to help you better understand SigEp’s policies and how to implement and enforce them at your chapter. Some of the prior language was ambiguous making it difficult to understand. The former policies did not include some updated policies that are represented as exclusions in our current general liability insurance policy. Therefore, the revised policies are more clearly defined to ensure chapter members/leaders have a better understanding of the policies and how to implement them and hold brothers accountable to them.
What specifically has changed?
The former risk management policy document was called the “Statement on Chapter and Individual Responsibility”. It is being replaced by the Risk Management Policies of Sigma Phi Epsilon Fraternity. Changes include:
• Clear and concise policies that are easier to understand.
• A section specific to sexual assault and physical assault.
• Additional policies about the use of “fire” and operating rental vehicles or vehicles not owned by the driver to and from fraternity events.
• A section entitled “Liability Insurance Coverage” to make it clear to members that violating policies can void their liability insurance coverage.
These policies were reviewed and approved by the National Board of Directors on September 17, 2014.
What new resources were created to provide guidance in managing risk in the chapter?
The new resources provide step-by-step procedures to help your chapter plan a safe event that is in full compliance with the Risk Management Policies of Sigma Phi Epsilon Fraternity . These resources are located on the Member Safety section of sigep.org
General Liability Insurance
Who and what does General Liability insurance cover?
In the event of a claim or lawsuit, the general liability insurance policy provides liability coverage to members and volunteers who are acting within the scope of their fraternal duties as they are defined in SigEp’s Grand Chapter Bylaws and in compliance with the Risk Management Policies of Sigma Phi Epsilon Fraternity. If a chapter or member violates the law and/or risk management policies they will forfeit their insurance coverage.
The General Liability policy offers protection in the event that a third party is injured and alleges negligence on the part of the Fraternity and/or its members. This can be related to an event on or off chapter premises. The policy also protects against claims arising out of slander, libel, false arrest and invasion of privacy.
What would exclude me from coverage?
Breaking the law and/or violating the Risk Management Policies of Sigma Phi Epsilon Fraternity.
If the member/chapter is not covered for violating policy, then why are insurance premiums going up for risky behavior?
Past experience has shown that chapters and its members are at a disadvantage when it comes to lawsuits. Aggressive plaintiff lawyers view fraternities as easy and vulnerable targets with deep pockets of money.
When a claim or lawsuit is filed there is potential for significant costs to be incurred. Often times, the national Fraternity, AVC and some individuals that did not violate policy are named as defendants in the suit. Coverage must be provided to these entities and individuals, and costs are incurred as a result of legal defense and potential settlements.
Also, in many instances the insurance carrier issues a “reservation of rights” and not a complete denial of coverage. This means they will defend the chapter/member until the point in time when facts are developed that support a complete denial.
What are the limits on the General Liability Insurance policy?
The primary limits are $1,000,000 per occurrence per chapter and $2,000,000 aggregate per chapter.
What is a sub-limit?
A sub-limit is a limitation in an insurance policy on the amount of coverage available to cover a specific insured party (chapter and members). A sub-limit is lower than the primary limit and is not an additional limit.
Why did SigEp decide to adopt sub-limits at this level for the chapter and its members?
The decision to adopt sub-limits was made after extensive research on the use of sub-limits with SigEp’s insurance broker, Willis, multiple fraternal groups and legal experts. Sub-limits have proven to lead to lower claim payouts and faster claim resolutions. It limits the chapters/members exposure and reduces the target for the plaintiff. We chose a sub-limit of $250,000 per occurrence/ $500,000 aggregate for chapters and members because, based on SigEp’s claim history, these limits are more than adequate.
We chose the sub-limit of $250,000 per occurrence/$500,000 aggregate for chapters and members based on SigEp’s and other fraternities’ past claim history and determined these limits are sufficient.
Will the sub-limit provide adequate protection to the chapter and its members?
Yes, we are confident that it will provide adequate protection. In the past twenty years, there have been only a small percentage of cases that have come close to a payout of $250,000. Furthermore, since chapters do not have substantial assets there is really no need to cover a chapter with a higher limit.
Why is coverage decreasing yet premium costs increasing?
The scope of your coverage is not changing. The maximum limit is being reduced to align with the most severe claims we incur as a Fraternity and reduce the unnecessary loss that can occur when attorneys are simply looking to extend the legal process and collect unrealistic settlements.
We made the decision to decrease the limit for chapters/members as a strategy to reduce claim payouts which ultimately will lead to reduced insurance premiums for our chapters/members. SigEp faced a difficult renewal and a sharp premium increase necessitating the decision to adopt the sub-limits.
What impact does this have on the AVC and volunteers?
There is no change to the AVC and volunteer limit of coverage. They are still covered by the primary general liability limit of $1,000,000 per occurrence/$2,000,000 aggregate.
New Claims and Dispute Resolution Process
Why did SigEp decide to utilize this process to resolve member disputes?
Lawsuits brought against the Fraternity by brothers have been very costly to our organization driving up our insurance premiums. In some cases, these lawsuits have involved members that consciously chose to engage in risky behavior.
Similar to the decision to adopt the sub-limits, we worked with Willis and conducted research on the use of claims and dispute resolution with multiple fraternal groups and legal experts. Lawyers defending fraternal groups for a number of years have seen benefits to groups that utilize this process. Claims and disputes are resolved more expeditiously and economically. The Court system is not involved with this process which reduces court fees, legal fees and time invested in litigation.
Our research showed that this was the best method being used by fraternal organizations and fraternity defense lawyers.
How does this impact me as a member?
If you have a dispute or concern with the chapter, AVC or national Fraternity, it can be resolved much quicker through a mediation process than the court system.
What is an example of when this would come into play?
A few members take the new members to an off-campus location. Several activities are planned. Members are asked to consume a concoction of food and sauces as well as consume alcohol. During the trust fall activity, one new member falls and injures his back and has to seek medical attention.
If the Fraternity is not able to reach an agreement to settle the claim with the injured new member then instead of taking the matter to Court, a mediator is selected to help the parties resolve the claim. Attorneys may still be involved but the resolution is worked out through mediation and not in the Court system.