Fraternal Organization Insurance Policy Information
Fraternal Organization Insurance. Are you the head member of a Knights of Columbus, an American Legion, a VFW, a Moose Club, or any other type of Fraternal Order? If so, there's no doubt that you want to do your best to ensure that the members of your club are enjoying as many benefits as possible.
While it may be hard to think about something bad happening, there is a chance that something could go awry at a meeting or on the property of your Fraternal Order and someone could file a lawsuit against you.
Fraternal orders are comprised of groups of people with related interests or goals who form an organization to pursue those interests or goals. Fraternal orders may be formed for the pursuit of pleasure, to perform a public service, to educate the public and provide funding for medical or scientific research, or to inform and advance a particular charity, philosophy, religion, trade, political, or social issue.
Some have snack bars or full-service restaurants that may be open to the public. Alcoholic beverages may be served at social events. Fraternal orders may be funded solely by membership dues or financed with fundraisers and donations.
In order to protect yourself, your organization, and anyone who is involved with your group, it's extremely important that you invest in the right type of fraternal organization insurance coverage.
Fraternal Organization insurance protects your order from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked fraternal organization insurance questions:
- What Is Fraternal Organization Insurance?
- How Much Does Fraternal Organization Insurance Cost?
- Why Do Fraternal Orders Need Insurance?
- What Type Of Insurance Do Fraternal Service Organizations Need??
- What Does Fraternal Organization Insurance Cover & Pay For?
What Is Fraternal Organization Insurance?
Fraternal organization insurance is insurance coverage specifically designed for fraternal organizations, such as fraternities, sororities, and lodges. It is a type of group insurance that provides various benefits and protection to members of the organization.
These benefits may include life insurance, health insurance, dental insurance, disability insurance, and accidental death and dismemberment insurance. The purpose of fraternal organization insurance is to provide members with affordable insurance options and protection, while also promoting community and fraternal spirit among members.
How Much Does Fraternal Organization Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small fraternal organizations ranges from $37 to $59 per month based on location, size, payroll, sales and experience.
Why Do Fraternal Orders Need Insurance?
Fraternal Orders can face any number of mishaps. Someone could slip and fall at a meeting, a member of your group could file a lawsuit against you claiming that you misrepresented the club, a member of your group could embezzle funds; these are just some of the issues that may arise.
Given the fact that we live in a very litigious society, having the proper insurance coverage in place is absolutely essential for a Fraternal Order. Insurance coverage will protect you from the risks that are associated with your club; for example, if a member trips and falls over a wire that wasn't highlighted, sustains an injury, and files a lawsuit against your organization, you could be held liable for the damages, including medical care and any compensation that a court might deem you responsible to pay.
Without Fraternal Organization insurance, a situation like this could put your organization in serious financial peril; however, if you have the right coverage, your insurance provider will help to cover the costs that are associated with this type of situation - and any other number of risks.
What Type Of Insurance Do Fraternal Service Organizations Need?
There are several types of Fraternal Organization insurance policies that Orders should have in place to properly protect their organizations. Some of the most basic forms of insurance coverage that are highly recommended include:
- General Liability - This type of insurance helps to pay for the cost of medical expenses, as well as legal fees that are related to injuries and property damage that a Fraternal Order may be liable for. For instance, if a piece of equipment malfunctions during a meeting and injuries someone, general liability insurance would help to pay for any medical care that the individual may require. If that person files a lawsuit against you, your policy will also pay for your legal fees.
- Property Insurance - In the event that the building your organization operates out of is damaged, a property insurance policy will help to cover the cost of repairs. For instance, if a severe wind knocks a tree over onto the building and damages the roof, as well as some of the contents inside the structure, the carrier of your property insurance policy will help to pay for the repairs or anything that may need to be replaced.
- Liquor Liability - If alcohol is served in any capacity at your location, you definitely want to have a liquor liability insurance policy in place. Any establishment that serves alcohol is liable for damages or injuries that occur when someone who was served drinks at that establishment causes an accident. For example, if a member of your club had one too many drinks and then caused a crash, you could be looking at serious legal problems, as the intoxicated individual was served drinks at your establishment. Liquor liability insurance will help to protect you from these types of legal problems.
- Directors and Officers Liability - This type of policy provides protection against any legal defense costs and damages that may arise if someone files a wrongful act suit against you. For example, if a club member files a claim against one of the directors of your Order, stating that he or she made false allegations or misrepresented the organization, D&O insurance would help to cover the costs of any personal losses the director may incur. Your coverage can also reimburse you for any losses that the club, itself, may suffer.
These are just some of the forms of Fraternal Organization insurance coverage that should be considered. The specific type of coverage will vary from organization to organization and depends on a variety of factors; the size of the club and the nature of the activities that occur at the organization, for example.
List Of General Fraternal Organizations
- Afro-American Sons and Daughters
- Aid Association of Lutherans
- American Hellenic Educational Progressive Association
- American Legion
- Ancient Mystical Order Rosae Crucis
- Ancient Order of Hibernians
- B'nai Brith
- Benevolent and Protective Order of Elks
- Brotherhood of St. Andrew
- Columbian Squires
- Concatenated Order of Hoo-Hoo
- Danish Brotherhood in America
- Dramatic Order of the Knights of Khorassan
- Epsilon Sigma Alpha International
- Fraternal Forestry
- Fraternal Order Orioles
- Fraternal Order of Buckles and Spurs
- Fraternal Order of Eagles of US and Canada
- Fraternal Order of Moai
- Fraternal Order of Owls
- Grand United Order of Oddfellows Friendly Society
- Gyro International
- Honorable Order of the Blue Goose, International
- Imperial Court System
- Improved Order of Heptasophs
- Improved Order of Red Men
- Independent Order of Odd Fellows (or IOOF aka Odd Fellows)
- International Order of Alhambra
- International Order of Twelve Knights and Daughters of Tabor
- International Organization of Good Templars (or IOG)
- Junior Chamber International (Jaycees or Junior Chamber of Commerce)
- Junior Order of United American Mechanics
- Kiwanis International
- Knights of Charity International
- Knights of Columbus
- Knights of Peter Claver
- Knights of Pythias
- Knights of the Golden Eagle
- Knights of the Maccabees
- Lions Clubs International
- Moose International
- National Haymakers Association
- Native Sons of the Golden West
- Optimist International
- Orange Order
- Order Sons of Italy in America
- Order of Heptasophs
- Order of Scottish Clans
- Order of the Arrow (BSA)
- Ordo Templi Orientis
- Rosicrucian Fellowship
- Rotary International
- Round Table Club
- Royal Antediluvian Order of Buffaloes
- Sertoma International
- Sons of Confederate Veterans
- Sons of Norway
- Sons of Union Veterans of the Civil War
- Sons of the American Revolution
- Sons of the Revolution
- The National Grange of the Order of Patrons of Husbandry (The Grange)
- Unico National
- United States Junior Chamber
- Vasa Order of America
- Veterans of Foreign Wars (VFW)
- Woodmen of the World
- World War Veterans
- Zonta International
Fraternal Services Organization's Risks & Exposures
Premises liability exposure is moderate due to the number of people visiting the premises. Visitors can be injured from slip and falls. Floor coverings must be in good condition, with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. Fund-raising activities must be evaluated to determine whether a special events policy is needed. If there are outside contractors, certificates of insurance should be obtained and maintained.
Personal injury exposures include alleged assault and battery, discrimination, and invasion of privacy.
Directors and officers exposure is moderate. Policies and procedures should be published and consistently followed, especially as they relate to membership, membership revocation, the election of officers, and removal of officers.
Liquor liability exposure arises from liquor sold as a part of the order's regular operations. Servers must be trained to recognize the effects of excessive alcohol consumption, to verify the age of those ordering alcoholic beverages, and to refuse service to underage members or guests. Court interpretations have been inconsistent on the application of the liquor exclusion on clubs. Any group that regularly sells liquor as a part of their normal activities should consider purchasing the coverage to avoid costly litigation following a loss.
Workers compensation exposure may be limited to office workers who may develop repetitive motion injuries such as carpal tunnel syndrome. Workstations should be ergonomically designed. Restaurant workers can experience cuts, burns, puncture wounds, slips, falls, and back sprains from lifting.
Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals. Any contract with outside firms must specify who is responsible for providing workers compensation coverage to the workers. If the subcontracting firm is responsible, the fraternal order should obtain certificates of insurance to verify that coverage.
Property exposure is moderate as operations generally include cooking facilities. Ignition sources include electrical wiring, heating air conditioning systems, and cooking equipment. Electrical wiring must be up to code for its current use. If there is cooking from restaurant operations, controls such as automatic shut-off devices and temperature controls need to be in place. Grease filters should be cleaned and maintained regularly.
Activist fraternal orders on socioeconomic or political issues may antagonize others not supportive of their viewpoint and may become targets for acts of intimidation that include vandalism, arson, and firebombing. Additional security may be needed.
Crime exposure comes from employee dishonesty and theft of money and securities. Employee dishonesty coverage should be expanded to include faithful performance and to include volunteers as employees. Fraternal orders are unlikely to perform background checks on members handling money. Precautions against dishonesty include having a separation of duties between persons handling money and reconciling bank statements.
Two members should verify cash collections as fund-raising events may result in a large buildup of cash. Money should be regularly collected and moved away from the collection area, preferably to a safe. Regular deposits should be made.
Inland marine exposure includes accounts receivable from dues and fundraising events, computers, and valuable papers and records for donor lists and member records. All records must be duplicated and stored at an off-site location for easy restoration in the event of a loss. A special floater may be needed for property used in parades or special events.
Business auto exposure is generally limited to hired and non-owned for members running errands on behalf of the order. Some groups may provide transportation services for members. If there are owned vehicles, all drivers must have licenses appropriate for the vehicles driven and acceptable MVRs. There should be established criteria for those who are allowed to drive any owned vehicles and how the vehicles may be used. All vehicles must be maintained with records kept in a central location.
What Does Fraternal Organization Insurance Cover & Pay For?
Fraternal organizations can be sued for a variety of reasons. Here are some common scenarios, along with how insurance can help protect these organizations by covering legal costs and potential damages:
Personal injury or property damage: If a member or guest is injured at an event or on the organization's property, they may sue the fraternal organization for damages. Similarly, if the organization's activities cause damage to someone's property, they can also face a lawsuit. In these situations, General Liability Insurance can help cover legal defense costs, settlements, and judgments arising from these claims.
Discrimination or harassment: Fraternal organizations can be sued for discrimination or harassment if they are accused of treating members, potential members, or employees unfairly based on race, gender, age, religion, or other protected characteristics. Employment Practices Liability Insurance (EPLI) can help cover legal defense costs, settlements, and judgments in cases of discrimination, harassment, and other employment-related claims.
Mismanagement of funds: If the organization's leaders are accused of mismanaging funds, they can be sued for breach of fiduciary duty. Directors and Officers (D&O) Insurance can help cover legal defense costs, settlements, and judgments for claims related to mismanagement, financial misconduct, or negligence by the organization's leaders.
Professional liability: If the fraternal organization offers professional services or advice and is accused of negligence or malpractice, they can be sued for professional liability. Professional Liability Insurance (also known as Errors and Omissions Insurance) can help cover legal defense costs, settlements, and judgments related to these claims.
Liquor liability: If the organization hosts events where alcohol is served, they can be sued if an intoxicated guest causes injury or damage to themselves or others. Liquor Liability Insurance can help cover legal defense costs, settlements, and judgments arising from alcohol-related incidents.
Cyber liability: If the organization experiences a data breach or cyberattack that compromises members' personal information, they can be sued for not properly protecting that data. Cyber Liability Insurance can help cover legal defense costs, settlements, and judgments related to data breaches or cyberattacks.
By purchasing appropriate insurance policies, fraternal organizations can protect themselves against the financial risks associated with these types of lawsuits, ensuring they can continue to operate and serve their members even in the face of legal challenges.
Commercial Insurance And Business Industry Classification
- SIC CODE: 8641 Civic, Social, and Fraternal Organizations
- NAICS CODE: 813410 Civic and Social Organizations
- Suggested Workers Compensation Code(s): 9061 Club - NOC & Clerical
8641: Civic, Social, and Fraternal Organizations
Division I: Services | Major Group 86: Membership Organizations | Industry Group 864: Civic, Social, And Fraternal Associations
8641 Civic, Social, and Fraternal Organizations: Membership organizations engaged in civic, social, or fraternal activities. Membership sports and recreation clubs are classified in Industry Group 799, and insurance offices maintained by fraternal organizations are classified in Insurance, Major Group 63. Homeowner, tenant, and condominium associations primarily engaged in managing real estate are classified in Real Estate, Industry 6531.
- Alumni associations and club
- Bars and restaurants owned and operated for members of
- Booster clubs
- Business persons clubs, civic and social
- Civic associations
- Community membership clubs, other than amusement and recreation
- Condominium associations, except property management
- Fraternal associations, other than insurance offices
- Fraternal lodges
- Fraternities and sororities, except residential
- Homeowner associations, except property management
- Parent-teacher associations
- Singing societies
- Social club, membership
- Tenant associations, except property management
- University club
- Youth associations, except hotel units
Fraternal Organization Insurance - The Bottom Line
To find out exactly what type of fraternal organization insurance your Order should carry, and how much coverage will protect your organization, speak to a reputable insurance broker. Investing in the right insurance coverage is one of the smartest things you can do for your group.
Additional Resources For Non-Profit Insurance
Find useful articles on business insurance for non-profit 501(c)(3) organizations, charities and associations.
- Animal Shelter & Pet Rescue
- Classic & Collector Car Clubs
- Fraternal Organization
- Goodwill Insustries
- Labor Union
- Parent Teacher Organization
- Public Administration
- Red Cross Chapters
- Salvation Army
- Social Work Services
- Veterans Groups
- Volunteers of America
- Youth Groups
- Specialty Community Service Organizations
- Specialty Nonprofit Agencies
The non-profit industry is an essential sector of society that plays a crucial role in addressing social issues, providing vital services, and promoting community development. Non-profits rely on donations, grants, and volunteer work to fund their operations, and any financial loss or liability can significantly impact their ability to serve their mission.
Insurance can protect non-profits from unexpected financial losses, accidents, and legal liabilities that can arise from their operations. For example, a non-profit organization may need insurance to cover damages to their property, injuries to volunteers or employees, or legal costs associated with lawsuits.
Non-profits also face unique risks such as loss of donations, damage to reputation, and loss of funding. Business insurance can help mitigate these risks by providing coverage for financial losses, reputational damage, and other non-tangible losses.
In addition, non-profits often work with vulnerable populations, such as children, the elderly, or individuals with disabilities. Insurance can protect non-profits from liabilities arising from the care and services they provide to these populations.
Overall, commercial insurance is an essential component of risk management for non-profit organizations. It helps protect the organization's financial stability, reputation, and ability to fulfill its mission and serve its community.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Computers, Valuable Papers and Records, General Liability, Directors and Officers Liability, Employee Benefits, Professional, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Fine Arts, Musical Instruments, Commercial Articles Floater, Computers, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.