At the 154th Anniversary Convention held June 30th thru July 3rd in Orlando Florida it was announced that Theta Chi would be making changes to its current general liability insurance program in relation to coverage for undergraduate chapters and house corporations effective October 1st. This change is being made due to the rising cost of insurance and litigation incurred by Theta Chi chapters and house corporations. To date all house corporations have been provided “general liability” coverage at no additional charge when their associated undergraduate chapter paid their risk management assessment. Theta Chi has elected to accept a reduction in the coverage made available to undergraduate chapters and house corporations under the national fraternity sponsored program to a limit of $250,000 per occurrence (chapter/house corporation) and $500,000 in the aggregate per location in an effort to control future cost of insurance.
Recently I sat down to review the insurance coverage by house corporations that have loans with The Norwich Housing Corporation. I found that several corporations had low or no Business Income (BI) and Extra Expense Coverage (EE). So I started to wonder how many other Theta Chi house corporations don’t have adequate BI and EE coverage. If something happens to the chapter house and the house corporation has a mortgage, how is the corporation going to pay the monthly mortgage? What are they going to do to house the brothers living in the house?
To get a better understanding of this coverage, I contacted our friends at Willis North America. As always, they were able to provide me some great information on this issue.
Business Income (BI) and Extra Expense (EE) is an additional coverage available through most insurance programs. While it is not required, it is a recommended coverage and all chapters owning or leasing a property should purchase it. Business Income (BI) and Extra Expense (EE) coverage protects a chapter against a financial loss in the event a chapter house becomes uninhabitable and the income generated by its tenants is lost. It also protects against increased expenses to keep your chapter operating without interruption. A covered loss must be the cause for the loss of income or increased expense in order to be covered.