Chapter Facility Management, Insurance & Liability. Todd Mattox Education Consultant, HRH/Kirklin & Co., LLC

Transcription

1 Chapter Facility Management, Insurance Liability Todd Mattox Education Consultant,

2 Background of Co, LLC. 100% dedicated to serving college student and alumni organizations Founded in 1991 as Kirklin, now a wholly subsidiary of Hilb Rogal Hobbs (HRH) since 2002 Insurance and Risk Management programs provided to numerous college student and alumni organizations 52 NIC fraternities 5 NPHC fraternities sororities 12 NALFO fraternities sororities Professional co-educational fraternities Numerous local and small fraternal organizations Over 1,300 fraternity properties insured through the Fraternal Property Management Association (FPMA) Insurance Brokerage Agency We work for you, not the insurance adjuster/underwriter 2

3 Your Legal Structure as a House Corporation? Advantages of Incorporation Provides a legal organization structure Provides established methods of governing the organization to include the election of the board of directors, membership and voting rights, and provides the establishment of duties and obligations of officers, directors and members Provides a stable structure, being usually perpetual duration Limits legal liability of officers, directors and members arising out of contract or out of trot liability Provides a more readily recognizable entity to the business community and state/federal authorities to include qualification as a not for profit entity at the state and federal level. This would include greater acceptability upon application as a 501 (c) 7 organization. 3

4 Fiduciary Responsibilities House Corporation Directors Each house corporation board member has a duty of Diligence Loyalty Obedience 4

5 Fiduciary Responsibilities House Corporation Directors (continued) Articles of Incorporation Annual Return Filing with State/Federal Contracts and Lease Agreements Physical Plant Upkeep Proper Insurance Workers compensation General liability Property Coverage Financial records maintained 5

6 Responsibilities House Corporation Directors Provide general advice and guidance to undergraduate officers in managing the facility and property Supervising of long-term housing, authority for financial details related to housing, and direction of planning for future housing needs, including management of the chapter s reserve fund Coordination of general alumni activities, communications and reunions to encourage the alumni to continue their interest and support of the chapter and the Fraternity, especially if there is no alumni chapter Meet regularly to review the rent, finances, upkeep on the physical plant, insurance coverage, and to provide input to the bylaws of the chapter that relate to the house corporation 6

7 Additional Responsibilities of the House Corporation Develop individual lease agreements for members and general tenant lease agreement for chapter Develop standard facility rules and policies (ex. no smoking, candles, space heaters, extension cords, etc.) Employ a professional property management company to perform regular maintenance and repairs for the facility Assure the facility is properly prepared for seasonal and school breaks, regardless if members are in the facility Operate the facility and corporation in line with all applicable laws and regulations (federal, state, local) 7

8 Additional Responsibilities of the House Corporation Develop clearly defined roles and responsibilities for all chapter employees (cook, house director, resident advisor) with due diligence in selection/screening process Financial accounts maintained accordingly with audit and review performed by CPA, co-signature on all checks, and reconciliation of accounts performed by a third party without access to accounts 8

9 Lines of Defense to Risk There are three basic lines of defense against any tort liability claim. Loss Prevention Loss Control Insurance Contract 9

10 Facility Maintenance Mechanical items and systems professionally inspected and serviced on an annually or more frequent basis Plumbing system professionally inspected and serviced on an annually or more frequent basis Electrical and emergency systems professional inspected and serviced on an annually or more frequent basis Roof professionally inspected and serviced on a biennial basis Foundation and overall structure professionally inspected and serviced on a biennial basis Self inspection process in place and conducted on an annual or more frequent basis 10

11 Fire Health Safety No smoking policy, smoking only allowed outside of facility on level surface with appropriate disposal receptacle Fire sprinkler system installed throughout the facility, including member suites and common areas All appropriate fire safety regulations are met and/or exceeded, including kitchen areas, member suites and common areas Proper posting of evacuation plans in member suites and throughout facility, especially common areas Participation in regular fire drills with results reviewed by corporation board and property manager Fire extinguishers and hard wired detectors are properly and adequately located throughout the facility 11

12 Fire Health Safety (continued) Central alarm system updated with proper monitoring devices such as hard wired detectors, audible (bell) and visual (strobe) alarms Electromagnetic self-closing doors for hallways and stairwells as well as proper fire rated doors on external exits and throughout the facility Doors and windows properly close and latch, meeting all necessary building and fire requirements The interior and exterior of the facility is clear of extraneous debris, reducing possibilities for arson and/or vandalism Supply of paint and other combustible materials is store in a dry and secure area 12

13 Facility Renovations Electrical systems updated to meet current building standards as well as accommodate for modern amenities such as computers, televisions and other small electronics Plumbing systems updated for modern facilities, including proper waste disposal and venting of facility ADA updates for facility including walkways, door handles, bathroom fixtures and other common areas and/or specific living areas 13

14 Evaluating your Rent House Corporation Rent = {Market Value x 1% per month for 12 months} + operating expenses *Rule of thumb often used in connection with apartment and rooming houses House Corporation Rent = Market Value 5.25 *This formula is another rule of thumb used in connection with rooming houses. The divisor is dependent upon local market conditions and may be determined by dividing the selling prices of rooming house properties that have been sold by their gross incomes. House Corporation Rent = Gross Income of Chapter 3 *Rule of thumb developed by the University of Minnesota 14

15 Chapter Property Insurance Fraternal Property Management Association (FPMA) provides educational assistance to fraternity volunteers in an effort to strengthen their ability to manage the chapter properties of their fraternal organization provides a comprehensive and competitively priced property insurance program to protect the physical plants that house the undergraduate members Benefits of participation in FPMA A semiannual FPMA newsletter that focuses on risk management and issues facing property managers and their fraternity or organization A property insurance program that provides in most cases, broader insurance coverage for less premium A biennial inspection that provides recommendations for physical plant improvements, addressing life safety and property conditions, along with completion of a replacement cost valuation Security of knowing coverage will still be available at an affordable rate even after a significant loss 15

16 Chapter Property Insurance Coverage Opportunities Agreed Amount Provides for removal of coinsurance clause ensuring the chapter will not be personalized for unintentional undervaluation of a chapter property Replacement Cost Provides for replacement of building and contents owned by chapter or alumni association/housing corporation Business Income (loss or rents) Provides for the payment of rental income to the house corporation that would otherwise be lost if the house can no longer be occupied due to fire or to other extensive damage that prohibits occupancy Extra Expense Provides for the payment of additional expenses a chapter or corporation might incur if a fire or extensive property damage requires extraordinary expenditures Law Ordinance Provides the additional funds necessary to bring a damaged structure up to current building and safety code requirements following a fire or other extensive damage to the chapter facility 16

17 Property Inspections for facilities participating in FPMA contact: Kathy Payne, Inspection Coordinator or , extension 201 Inspections performed on at least a biennial basis for all properties Recommendations and requirements for improvement and necessary updates provided, regarding fire, building and safety regulations Facilities failing to meet requirements inspected on an annual basis until recommendation are met at a satisfactory level or subject to possible cancellation of policy Inspections performed in addition to that of health and fire safety of local governing authorities 17

18 Loss Control: What to do in the event of a property loss contact: Amber Dewitt, Claims Examiner adewitt@kirklin.com or , extension 209 Notify the fire emergency services and obtain medial attention for any injured parties. Notify the police if laws have been broken. Obtain temporary housing for any displaced residents of the fraternity. Do what is reasonable and necessary to protect property from further damage. Keep records and receipts of expenses to be filed with your claim. Notify insurance agent of the loss as soon as possible. If feasible, separate damaged/undamaged items and conduct an inventory. Take photos of all damaged property, once the facility and general area are secured. 18

19 Chapter Property Insurance Discount Opportunities 50% discount for first full and partial policy term and subsequent policy term following fire sprinkler installation 30% discount for fire sprinkler installation in third full policy term and thereafter 10% discount for modern and safe facilities (construction or major renovation of facility after January 1, 1990) 10% discount for employing a professional property management company 5% discount for multiple locations (adjacent housing) 5% discount for completion of a strategic assessment with Pennington 19

20 Estimation of annual premium Copy of current property insurance coverage policy Simple comparison in breadth of coverage, annual premium and benefits Susanne Haas Marketing Assistant Extension 203 Emily Fay Marketing Assistant Extension

21 Resources available online at FPMA application Sprinkler discount application FPMA informational brochure Property Management Educational Resources Risk Management Educational Resources 21

22 Thank You! Todd Mattox Education Consultant extension