Homebrewers Association | AHA Forum

General Category => General Homebrew Discussion => Topic started by: Crispy275 on July 29, 2010, 03:37:25 pm

Title: The AHA needs your help!
Post by: Crispy275 on July 29, 2010, 03:37:25 pm
We are looking for clubs that currently have insurance who would be willing to share the information with staff and the Governing Committee.

Please PM your contact info to me (Chris Frey), or send me an email to crispy275@comcast.net.

Specifically, we are looking for requirements that you needed to obtain coverage (incorporation, etc.), types of coverages (events, Directors & Officers, equipment, etc.).

The name of the agent, underwriter, you get the picture. The end goal is to see if we can identify a national carrier that would be willing to offer coverage to AHA clubs.
Title: Re: The AHA needs your help!
Post by: Bruce B on August 20, 2010, 06:34:29 am
Earlier this year our club (Beer Barons of Milwaukee) wrapped up our incorporation project.  This project consisted of becoming incorporated, registering as a non for profit organization, and obtaining insurance.  Each of these steps yielded their own benefits but in the end they were all necessary in order for us to obtain the insurance coverage we now have.

The first step was to register with the State of Wisconsin as a Limited Liability Corporation (LLC).  This was completed in August of 2008 and the club is legally known as the Beer Barons of Milwaukee Cooperative.  This step gained the club two advantages.  First, it protects the club Officers and Event Leaders from being sued in the event of some kind of unfortunate incident.  Prior to becoming an LLC if something happened each Officer or possibly Event Leader could be sued individually.  Now that we’re an LLC, in the event of a law suit, an individual would name the club in the suit, not individual members.  On the flip side, the second thing that incorporation gains the club is the ability for the club to take legal action against an individual or another corporation.  So in the event of fraud or a contract dispute, current club Officers can initiate legal action and future club Officers can see it through to the end.  Prior to incorporation if legal action was required the current club Officers would have to initiate it and see it through to the end (which could be many years after they leave office).

The second step in the project was to register with the Internal Revenue Service as a non for profit organization.  This step was taken so the club would not be required to pay federal and state income taxes for the educational services and charitable contributions that are provided from the fees that are collected.  In December of 2009 the Barons were approved by the IRS as a 501 (c) (7) organization, which means non for profit social club.  It's important to note that in order to register with the IRS we had to submit a copy of our constitution, by-laws, and non-discrimination statement.  Here is a link to the Barons for those that might like an example -> http://beerbarons.org/about/constitution.html

The third step was to obtain the necessary insurance for the club.  We already had a special single event policy for the beer festival we hold each June (www.worldofbeerfestival.com), but we didn’t have anything for our monthly club meetings, our Brew-U classes, or club board members.  Since we were now a non for profit organization we were able to obtain a policy that covers all of our events, loss of property, and liability for our board members.  It’s important to note that in order to obtain this insurance coverage we had to be registered as a non for profit organization.  I’ve emailed the details of our insurance coverage to Chris outside of this thread along with the name of our insurance agent for follow up.

The incorporation effort also investigated taking a fourth step, the possibility of seeking sales tax exemption; however that would have required the club to pursue a Public Charities and Private Foundation status.  While the club does provide some nice sized charitable efforts at this time, the amount of charitable effort required to achieve this status would greatly change the way the club operates today.

Hope this helps.
Title: Re: The AHA needs your help!
Post by: Crispy275 on August 20, 2010, 11:46:02 am
Thank you for sharing this with the collective on TechTalk. After meeting you and other Beer Barons this past summer at the Minnesota National Homebrewers Association Homebrewers Conference, I knew I had finally meet a club that could provide direction.

I really appreciated your club sharing all of this information that you did with me: the insurance documents and the steps your club went about doing this. Your step-by-step explanation serves as a guide to other clubs who may be contemplating obtaining siilar insurance.

I will to also put your post in the Club Resource section of this website, so that others who are forming clubs, or thinking about taking their club to the next level will be able to find it.

Again, thanks for laying it all out for others to find!

Title: Re: The AHA needs your help!
Post by: Bruce B on August 20, 2010, 12:07:35 pm
No problem Crispy.  Happy to help.
Title: Re: The AHA needs your help!
Post by: bonjour on August 20, 2010, 12:29:37 pm
I copied the post to the Club board and made it sticky

Thanks Bruce, appreciate the info.
Title: Re: The AHA needs your help!
Post by: tumarkin on October 22, 2010, 01:18:19 pm
Just wondering if any progress has been made on this?

My club, Hogtown Brewers in Gainesville, FL, is incorporated & tax exempt, but we don't have any insurance for meetings, officers, etc. We also get insurance for a single event each year. We have the beer concession at the Medieval Faire run by the City of Gainesville. We are considering/planning a possible annual beer festival as well.

Does the  Beer Barons policy cover your annual beer event as well as meetings, etc or is that still covered under a separate policy?

I suspect that each policy is probably different (club size, events, other factors?),  but what is the cost of the Beer Barons coverage for meetings & officers?

Title: Re: The AHA needs your help!
Post by: Bruce B on October 23, 2010, 11:32:33 pm
Hi Mark,

Regarding the Beer Barons we have 3 policies; Commercial Lines Policy (Provides liability coverage for directors, officers, and trustees), Commercial Property Coverage, and Commercial General Liability.  All of these policies were set up to cover our monthly meetings, our educational classes, and our annual beer festival.  It's important to note that we had to achieve non-for-profit status in order to qualify for the Commercial Lines Policy. 

You're correct about the differences for each club impacting the cost of the policies.  State & Federal regulations, number of attendees, etc all influence the costs.  The policies for this year are based on our 2009 numbers which were 12 monthly club meetings (average attendance of 114), World of Beer Festival (360 attendees), 12 officer meetings (average attendance of 12), our class schedule (between 7 and 10 sessions), and the other beer festivals that we serve at (between 3 and 4). 

I'd be happy to put you in contact with our agent if you'd like to talk to him about your situation.  Just let me know.
Title: Re: The AHA needs your help!
Post by: Mikey on October 24, 2010, 02:00:25 am
Kind of takes the fun out of home brewing.  Just saying.
Title: Re: The AHA needs your help!
Post by: Bruce B on October 24, 2010, 04:28:40 am
Definitely not as fun as brewing and enjoying it.  Unfortunately accidents can happen.
Title: Re: The AHA needs your help!
Post by: Bruce B on October 24, 2010, 04:37:26 am
The first step was to register with the State of Wisconsin as a Limited Liability Corporation (LLC). 

I messed up with this statement.  We actually incorporated as a non-stock cooperative with the State of Wisconsin.  My apologies.
Title: Re: The AHA needs your help!
Post by: Mikey on October 24, 2010, 04:56:24 am
I have a good friend that has said for many years the problem with our society is because of 2 things, programmers and attorneys. I'm having a hard time disagreeing with him.
Title: Re: The AHA needs your help!
Post by: tumarkin on October 24, 2010, 12:45:33 pm
Yes, I'd appreciate the contact info for your agent. Thanks!!

Anytime you look at insurance & the reasons/need for it, it tends to take some of the fun out of it. I've had these discussions with Gary and others at the AHA, and while no one is aware of an instance where an alcohol related accident after a club event or meeting has resulted in club or officers being sued, that could change at any time.  As your friend knows, we live in a litigious society and the lawyers go after everyone they can in hopes of tapping into the deep pockets. insurance is a good option if it's affordable and the club has the resources to buy it (our luckily does). so we'd at least like to look into the possibility.

this is the kind of thing where the AHA can really serve the members. an insurance carrier is going to be more willing to offer a reasonable deal to multiple clubs rather than just one.
Title: Re: The AHA needs your help!
Post by: Mikey on October 24, 2010, 01:41:17 pm
Don't get me wrong, I completely understand why you're doing it, but it's still sad that it has to be done.

When you think about it, it's kind if ironic. The AHA does all it can to break down the legal barriers to home brewing, yet legal corporations have to be set up to protect home brewers..