SCFMS Insurance Program

The South Central Federation of Mineral Societies has established a Commercial General Liability Insurance Policy with American States Insurance Companies. The policy is a standard issue policy that contains the same language written on all businesses. The company is a subsidiary of SAFECO Insurance and is a standard insurance company. The insurance premiums are very low and the coverage very broad because of that. The cost is currently three dollars ($3.00) per club member.
The policy limits we currently have are:
$2,000,000 aggregate per year
$1,000,000 per incident per year
$ 50,000 fire damage any one fire
$ 10,000 medical expenses any one person
The purpose of the policy is to provide insurance against third party lawsuits. That means this is a liability policy and NOT a medical policy. It is to protect the Federation and participating clubs from lawsuits from people who are not covered under the policy. This policy covers the clubs for all club related activities such as regular club meetings, club shows, club picnic, field trips, displays in public places, demonstrations at schools or other places, and other related activities or events.
A good way to view this policy is like a person who only carries liability insurance on his automobile. If he has an accident that is his fault the insurance company will pay to repair the damage to the other persons property but will not repair the insured’s vehicle. If the insured wants to have his vehicle repaired, then he must carry and pay for comprehensive and collision coverage adding a large increase to his premium. The Federation carries a liability only policy. Our policy will cover us for damage we do to other people or property. It does not cover damage we do to ourselves. Remember this is not an automobile policy and does not cover auto accidents to and from field trips or anywhere else, nor is it a medical expense policy. That is why we must carry our own automobile insurance policy and medical insurance policy. Because the policy is a standard policy it is the best of its kind available today.

This is something I have been working on for four years and thanks to Keith Harmon we have finally got a program. We are the only federation that does not provide this service. This is group liability insurance – liability only. It will protect your club, your officers and your members from any liability claim made by a non-club member. Some of you are required to provide liability insurance in order to lease your show facility. You probably pay $350 to $500 annually for this coverage. This group insurance will provide you with the same coverage for as little as $1.16 per member if we can enroll enough clubs with a combined total membership of 1500' In other words, a club with 50 members that now pays $350 for insurance would get the same two million dollars of liability coverage for $58. A tremendous savings.'

Each club would be individually insured. Certificates of insurance will be available for $20. Your club, your officers and members would be covered annually for your show, meetings, field trips, rock swaps, picnics, banquets, parties or any sanctioned club activity. Even if you are not required to have insurance for your show, you would be foolish not to have this coverage. Most clubs and officers do not know how vulnerable they are to liable suits. We hope to get a packet to you soon with the details of the coverage. In the mean time, check your current coverage. Discuss this at your meeting so you will be able to make a decision. Four clubs have already said that they are ready to sign up as soon as they get an application.

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To: All SCFMS Officers and Chairperson

From: George E. Browne, President

Subject: Group Liability Insurance

Enclosed is the insurance packet that was sent to each club. Please encourage your club to consider this program. We realize that there is an extremely short lead time but we need to receive the insurance questionnaire as soon as possible and hopefully no later than the second week in September. These forms will let us know which clubs are and are not going to participate. They will also give us the preliminary member numbers that we need to plan the implementation of the project. I ask that the district vice presidents contact each of their district clubs and urge them to consider the program and return the questionnaires. Keep a record of your telephone or other expenses and submit it to the treasurer for reimbursement.

We hope that the majority of our clubs will participate. This is an excellent program that the Federation can offer. In our opinion every club should be insured. Most clubs do not realize just how vulnerable their officers and members are. One lawsuit could wipe out a club and be financially devastating to its officers. We hope that we never need to file a claim but it is comforting to know that there is protection if it should occur.

In the long term this program may promote Federation growth. Clubs that are not currently members may consider joining just to take advantage of this opportunity. Several of these clubs could pay their Federation dues and the insurance premiums and this would be less than their current individual insurance. If you have contact with these clubs please let them know about this program. If they are interested get them in touch with the appropriate district vice president or the executive secretary.

Just a reminder: Federation dues will be due November lst.

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To: All Federation Clubs

From: George E. Browne, President

Subject: Group Liability Insurance

I hope everyone is aware that we have been striving to get a federation group liability insurance policy. The purpose is to save our clubs a considerable amount of money and provide some much needed protection from lawsuits. All of the other regional federations provide this service. The reason it has taken us so long to get a program is because we are the smallest federation in the number of clubs and members. Now we have the opportunity to obtain this insurance at a very reasonable rate provided we can get a sufficient number of clubs to participate.

Several clubs are required to have this type of insurance in order to lease their show facilities. These individual policies cost between $400 and $600 per event. This group policy will provide the same coverage with the required certificates of insurance at a much lower cost. The policy also benefits the clubs that are not required to produce certificates of insurance. It provides annual protection including legal fees for all club activities. Some clubs mistakenly believe that incorporation makes them immune from law suits. Incorporation may limit the amount of judgment but it does not prevent the club, its officers or members from being sued. Defense of a lawsuit is very expensive even if the judgment is in your favor. This policy provides you with the legal defense.

Keith Harmon has prepared the enclosed question and answer explanation of the policy. It is written in plain English so please read it carefully. It should answer most of your questions. Also enclosed is the "insurance proposals provided by the broker. This is the policy.

LOGISTICS: This is a new program. Since we have not had any previous experience the following is our best plan on how to start this operation. As we gain experience we may fine tune the procedures but for now these will be our initial ground rules.

The policy will cost the federation $1599.00 per year based on 1500 participating individual members. Any additional members will be $1.07 each. We have no way of anticipating how many clubs will participate and what the total number of individual members will be. However we are confident that at least a total of 800 members will participate. Therefore, we will set the initial participation fee at $2.00 per member. If your club has 50 members your cost will be $100.00; 100 members would be $200.00 and so on. This is still much cheaper than an individual policy. If we have a total participation of over 800 members will we refund the excess to the clubs based on their total number of members reported.

We plan to implement this policy to coincide with our fiscal year which starts November 1, 1997. We will pay the premium on October 31, 1997. Therefore, we must RECEIVE your check in the amount of $2.00 per member on or before Oct. 31st. Note: The check must be received before Oct. 31, 1997. We suggest that you send your check no later than Oct. 15th to our executive secretary to insure that it is received before Oct. 31st. Any participating club whose check is received after Oct. 31 will be assessed a $25.00 non-refundable penalty.

The certificates of insurance will be sent to the participating clubs as soon as possible after Nov. 1, 1997. If you require additional certificates, you can request them at the time you make your application.

FORMS: Enclosed is an insurance questionnaire. We ask that ALL clubs fill out this document and send it to our Executive Secretary, Jonathan Moehring as soon as possible. We have enclosed an addressed envelope for this purpose. We need this information to determine if you are or are not going to participate in this program. Please help us out and send this information. It is very important for our initial planning.

APPLICATION: Also enclosed is an insurance application form and addressed envelope. Send this form with your check if you are going to participate in the program. This application contains some of the same information as the questionnaire. This form and your check must be received by the Executive Secretary on or before Oct. 31, 1997 to avoid a penalty. Checks should be made out to the South Central Federation of Mineral Societies (SCFMS). In order to avoid confusing your insurance premium check with your dues, please indicate on the check that it is for insurance.

SUMMARY: This is a service that the Federation can offer that is mutually beneficial to all. It is an affordable way for all clubs to obtain the much needed liability protection and a method for several clubs to save some precious club funds. In our opinion all clubs should participate. We are confident that eventually we will have an enrollment of over 1500 members and the cost will be reduced to $1.07 per member. It is possible now but it would require almost 100% participation.

SPECIAL NOTE: We have contacted the large clubs that have their own facilities. These clubs have comprehensive insurance which includes property insurance - fire theft -etc. Usually they have a liability rider. The agent has agreed to look at their policies to see if they can get a reduced rate with the same coverage. If this is possible and they purchase this insurance their membership numbers will count toward our liability totals. This would reduce our cost per member. At this time this is only a possibility. Let's hope it works out.

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If you have comments or suggestions, email me at gpenning@scfms.net

Last update: February 3, 2005