Bi-monthly newsletter from the MJ Insurance | Sorority Division.

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We are proud to announce the addition of another women's fraternity to the MJ Sorority Program. Alpha Chi Omega Fraternity became a client of MJ in April 2015, and we welcome their leadership and volunteers to the insurance and risk management program!

With the strength and numbers of our Sorority Program, we are in a unique position to be able to detect trends affecting the sorority business. It is this analysis that allows us the opportunity to quickly engage in communication to our clients and to develop risk management tools to address those issues accordingly. Our best method of communicating these resources is this very newsletter.

We mention this to serve as a reminder that we are very intentional in the subjects that we insert into all of our communications, whether it is the News and Notes, the quarterly Employment News, or various other risk management bulletins throughout the year.

These should serve as red flags to you and your counterparts tasked with the vital roles for your organization, be it with the local house corporation, the chapter, or in other leadership capacities. We encourage you to review all of our communication pieces and pay particular attention to the topics we choose to highlight in each email blast.

Enjoy the rest of your summer!
Cindy Stellhorn

Executive Vice President
Sorority Division

Risk Control: Heat Detectors

As Travelers Insurance Company Risk Control Consultants travel around the country to inspect our clients' properties, they are reporting back to us any concerning trends that they observe repeatedly. We are reporting them here in hopes that an observation that Risk Control makes at one property might help another chapter house across the country. .

For more information on Risk Control, refer to our website or contact your Account Executive.

Heat Detectors

See the automatic sprinkler article below for additional information on the use of heat detectors. We recommend that you use heat detection systems in your attic. Some additional reminders:

Be sure smoke and heat detection systems are UL Listed or FM Approved systems and have been properly installed by .
The National Fire Protection Association (NFPA), Standard 72, National Fire Alarm Code, is the recognized standard for ITM of fire alarm equipment.
Local or state fire codes may also be different from NFPA 72 and impose stricter ITM standards. The building owner or manager must be aware of the local and state fire codes. It is especially important to realize that if local and state codes are stricter than NFPA 72, then the stricter code applies.
Keep in mind a heat detector is just that... a detector. It will do nothing to extinguish a fire.

For additional information, review this resource developed by Travelers.

Automatic Sprinkler System Update: NFPA 13R

The ruling body for commercial buildings fire safety codes is the National Fire Protection Association (NFPA). This entity determines the fire safety codes and is the recognized standard by which all businesses are to follow. This includes the fraternity and sorority chapter houses on college campuses.

It is the NFPA that sets the codes for the types of sprinkler systems that must be or can be installed in a building primarily based on its occupancy. In 1896, they developed the first code for systems in residential or habitational type occupancies NFPA 13.

NFPA 13 is designed to serve two distinct purposes:

To eliminate the risk of bodily injury or death of residents/guests
To significantly reduce fire damage to the property and any subsequent water damage from the fire response efforts

The building must be 100 percent sprinklered including attic space whether accessible or not. The costs to install can be substantial for the following:

Piping must be steel which is more labor intensive to fabricate
Attics must be also be sprinklered
Aesthetic work is more substantial with the exposed steel pipes

For a variety of reasons such as cost and labor, the NFPA came out in the 1970s with a modified code for residential housing, the NFPA 13R (Residential) Code. The main purpose of this risk management tool was purely the protection of lives, unlike NFPA 13 which also was protecting the physical property and thus has substantial benefits to the property exposure.

A criterion for the residential housing qualification was that the structure had to be less than four stories in height. As such, the sorority chapter houses did qualify for NFPA13R status, with the only caveat being the attics were not to be used for any purposes and were to have limited access to the attic space by the residents.

When the interest for sprinkler systems began to escalate, we were successful in getting the insurance company to provide substantial credits for a property that met the NFPA 13R code. A credit of 40 percent is applied to your location's property premium. Even though the primary benefit was life safety or the liability exposure, the insurance company agreed to apply this credit to the property premium:

As generally 57 percent of the account premium is for the property exposure whereas the liability was only 15 percent thus the dollar discount was far more substantial
As an inducement to get the property owners to budget for a sprinkler system.
To support the best risk management tool for life safety of your members, employees and guests

Over the years, we have seen an exposure emerge which has become a challenge; that being the very fact that the chapter house attics aren’t sprinklered. In the MJ Sorority Program, of the six property fires over $100,000 in claim costs, four of them started in the attic which was unsprinklered and had no other type of fire detection system present.

The biggest problem comes from the fact that the fire burns for some time in the attic and/or roof area, and it isn’t until it burns through the attic flooring for the debris to land on the next floor before the sprinkler system is engaged and the fire department is altered. The second problem then comes when the fire department gets there and has to release a lot more water than normal to extinguish the fire because the fire has been burning longer. Thus you have more of your building damaged by the fire and more water damage in trying to put it out.

The liability insurance company underwriters are still very pleased that there is reduced, if not completely eliminated bodily injury exposure, but the property underwriters are growing concerned about the exposure as we have seen it develop.

The obvious solution to this dilemma is to install sprinklers in the attic but suffice it to say that this would be virtually impossible for primarily cost reasons. We have done extensive research on this matter and can reach no other conclusion.

We can however recommend another solution to the fire protection alert delay that presently exists. That recommendation is installing a “heat sensor” to your existing fire alarm system in the attic space. With the sudden rise in the temperature in the attic (beyond just the summer heat), the fire department gets alerted to a fire much faster and there is ultimately less property damage.

Please see the risk control section above for additional information on heat sensors for your reference. In the future, we do anticipate that this will be required as an additional tool in the chapter houses to maintain the property sprinkler credit in the future. We will use this time to promote this tool and the ultimate requirement in the renewal communication and our newsletters so everyone is made aware and can budget accordingly.

Therefore, we are recommending that you not seek to comply with the sprinkler recommendation for the attic space of your property, but pursue the installation of the heat sensor instead.

Should you have any questions on the above information, feel free to contact Heidi Lewis, Senior Account Executive, at heidi.lewis@mjsorority.com.

This information is reproduced here via this memo if you wish to share it with others.

Newest Resources

Make sure your members are carrying insurance to protect their personal property while living in the chapter house. More details here.

We are working to duplicate the Insurance & Risk Management Summary under the Coverages tab on the website - check it out!

We have 50+ frequently asked questions answered at the FAQs section of mjsorority.com - check them out and let us know any that we've missed.

We are seeing a dramatic and concerning increase in embezzlement claims. Make sure that your chapters and house corporations have these minimum risk management practices in place.

Q: How long does it take to process a Certificate of Insurance?

A: It depends on what exactly is required by the specific venue and the nature of the event. We recommend that you submit requests two weeks in advance in order to ensure timely delivery, but we are happy to help you with Certificate requests at any time. Completing the Certificate of Insurance Request Form in its entirety is the best way of ensuring timely processing of your Certificate request.

Read this resource before submitting a Certificate request. For additional resources of Certificates of Insurance, event planning, and contract review, please check out our website.

For many more frequently asked questions, check out our FAQs on our website.

Employee Safety Basics

Due to the increase in workers' compensation claim frequency and severity, we developed the Employee Safety Basics module, which you can watch at your leisure by registering here. We encourage you to have your House Directors view this webinar, and then have the House Directors view the webinar with the remaining employees at the chapter facility.

Please take 30 seconds to help us develop our next webinars by completing this short survey.

Historic Building Coverage

The national insurance policy offered by MJ Sorority provides the important coverage for your chapter house. The coverage is designed to repair or replace your building if damaged or destroyed by the comprehensive perils (causes of loss) in the insurance policy. The method used by the insurance company at the time of loss is to replace the damaged property with materials that are of like kind and quality of that which was damaged. This means that modern materials and modern workmanship will be used to repair or replace the property.

For most chapter houses, replacement cost coverage is appropriate for what look you want to maintain/retain of your building. If however your chapter house is considered “historic” by a Local Register, a National Register, or National Landmark Register of Historic Places, you may prefer a different approach.

Under these registers, the property owner has obligations to reproduce the damaged features to the exact same design, decorative style and dimensions that existed prior to the loss, using identical materials with respect to kind and quality used historically for building.

Previously we did not have a mechanism in the policy to provide for the “reproduction costs” of these historic chapter houses. We are pleased to introduce a new coverage that can be added for your historic designation which can provide the coverage to actually reproduce the identical feature of your building if damaged.

To qualify for this coverage, you will need to secure an appraisal on your chapter house for its historical value and worth. Once secured, we can then add the coverage on to your location for the important additional coverage. In adding this coverage, we will use the appraisal value for the building and the current property rate will have a five percent surcharge added for the enhanced coverage.

Should you have any questions on the new insurance coverage, please contact your Account Executive.

Business Partner Spotlight: Billhighway

We believe strongly in partnering with like-minded firms that enable our clients to operate more efficiently and safely. Accordingly, we invite the Gold Sponsors of our annual MJ Housing Forum to share an article with our newsletter subscribers. Please read below for a submission from our business partners at Billhighway on preventing fraud.

Fraud Happens

Billhighway

Fraud happens. We know it does. Fraud is possible whenever sensitive information changes hands. In an economic climate that makes every dollar precious, no organization wants to lose 5% of its annual revenue to fraud.
Most businesses and nonprofits experience fraud in one of two ways: occupational fraud or embezzlement occurring inside the organization when an employee, board member or volunteer misappropriates assets; or consumer fraud when a customer, donor or someone outside the organization steals assets from the organization. Here are some concrete precautions every organization can take to safeguard against fraud.

Automate all donor or member payments
Create controls for checks and ACH payments
1. Limit the number of officers who have access to accounts
2. Require multiple approvals for payments made by check
3. Block ACH payments – this lets the bank know that electronic payments made using the bank routing number and the account number are unauthorized
4. Use a prepaid debit card to make vendor payments
Establish rules for communicating and storing sensitive information
1. Never send passwords via email
2. Use only https:// websites for sensitive information. You can confirm if a website is secure by verifying that “HTTPS” is present at the beginning of the URL.
3. Clean house periodically – shred documents and close unused accounts
4. Regularly change passwords (make sure they are alpha numeric and contain characters)
Develop a system for investigating irregularities
1. Create a security SWAT team
2. Make investigating irregularities the team’s top priority

For more information, contact:
Meghan Doyon
248-273-0074
mdoyon@billhighway.com

MJ Sorority Division: Who To Contact

If you're planning an event or have a Certificate of Insurance requests, please contact Ruth Akers.

For all claim questions, please contact Heather Cox.

For contact changes, please contact Allison Mrasek.

For educational resources and website related questions, please contact Sara Sterley.

For all other questions or requests, please contact your organization's Account Executive.

Help Us Spread the Word

This email is sent to the contacts that we have on file from each organization's headquarters. Please forward it onto your colleagues who might find the information helpful.

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Additional resources all the time

We are constantly updating our existing resources and developing new resources, so that we can enable our clients to proactively address trends before they become problematic.

Be sure to bookmark our website at www.mjsorority.com - the premier place for all things women's fraternity and sorority risk management.

Contact Sara Sterley, Director of Risk Management Education, with your suggestions.