The best protection a chapter has against legal liabilities is to use care and discretion in planning activities and to be sure that establishments with which it does business have adequate insurance coverage.
Alumni chapters providing a variety of activities for their members are exposed to various risks. Because it is not possible to provide a general liability policy to cover all alumni chapters, the information below should make you aware of the risks and suggest ways to deal with them.
First and foremost, WAA’s liability insurance does not cover alumni chapter programs. This is true because of the extreme diversity of chapter programs and the fact that such coverage would be prohibitively expensive and would require central administration of all chapter funds.
Legally, WAA is not able to accept liability for the actions or omissions of local chapter officers, or for any liability that may arise if a chapter officer improperly carries out the activities of an alumni chapter in a negligent or reckless way.
In order to limit potential legal liability, alumni chapters should:
- Be sure to use the services of a professional caterer or vendor whenever liquor or food is served at a chapter function. Individual directors and officers should ask their agents about the wisdom of obtaining additional personal liability coverage. Consult with your insurance agent when planning an activity to determine whether coverage is advisable or available for that kind of function. Chapters should consider getting liability coverage, including host liquor coverage and directors and officers (D&O) coverage. Consider the relative costs and benefits of annual coverage versus per-event coverage.
- Chapters may want to consider incorporating because this helps to restrict liability to the organization itself and to its directors and officers, rather than to every member. Members are still liable for their individual actions.
- In all areas of chapter operation, the key to avoiding liability is exercising care and using common sense in planning events. It is much better to avoid problems than to resolve them after they occur.
Potential Conflicts of Interest
It is the obligation of each officer, board member, or committee member to be aware of potential conflicts of interest involving personal financial transactions with the chapter. For example, if the chapter purchases food, beverages, or other goods or services from a member or from a business where a member has a financial interest, that member should fully disclose that transaction to the board. Thereafter, the officer, board member, or committee member must refrain from voting on or discussing matters related to that issue so as to avoid a conflict of interest.