Liability Insurance for Train Club

[Anonymous]

Our model train club sets up layouts for the public at libraries, public events, and train shows. A year or two ago we bought liability insurance to protect our members in case someone from the public somehow got hurt at one of our events. The policy premium doubled ($250/year to $500/year) this past year. We're trying to determine how other Clubs are handling liability insurance. (NMRA supposedly covers Clubs with 100% NMRA members, but not sure and we have a number of anti-NMRA members). Discussion with NMRA's affiliated insurance company seems to indicate that through them it would cost $750/year (there seems to be a minimum $$ amount that insurance companies will write a policy for and it's creeping toward $750/year). How are other Clubs handling liability insurance and how are their costs?

[Anonymous]

That's pretty steep considering the probability of actually having a claim on the policy. Of course you can eat up $1000 pretty quickly. Without insurance the club will pretty much disintegrate once a suit is filed.

You should also check into what liabilities individual members may have should something happen. Without insurance, an injured party may decide to just sue everyone. You might also want to consider incorporating your club. While not perfect, it may afford some insulation for individual members.

As I am not an NMRA member, nor do I know how many members your club has, you may want to work the numbers. How much per member does it cost to obtain insurance? How does that compare to membership? If joining the NMRA is say $25.00 and the cost per member to purchase insurance is $30.00. I'd join up whether I was anti NMRA or not.

[Anonymous]

Already crunched the numbers-(at the NMRA cheap membership price 23 members is greater than the $500 we're paying (we have 50 members). Also, we are a registered 501(c)(3) organization.

[Anonymous]

Good move. Please be sure though that you cross all your T's and dot all your i's to protect your 501(c)(3) and corporate status. I can't tell you how many folks find out too late that they didn't follow the rules (director's meetings, separate funds etc) until they were sued individually as the corporate veil was pierced.

[cacole]

The Cochise & Western Model Railroad Club, Sierra Vista, Arizona, has liability insurance with the only company we could find that was willing to sell us a policy. Every club member's automobile or homeowner insurance companies would not even talk to us about coverage. I don't remember the name of the insurance company we have, but the policy costs $250 per year. Their rate went up $50 per year after 9/11/01 and they blamed it on the World Trade Center terrorist attacks, claiming that they had to raise rates because of their financial losses. I think every insurance company in the country raised rates then.

[Anonymous]

I used to do this years ago but on a show by show basis. It would cost around 50-75 bucks for a 1,000,000 dollor group policy just to cover that one event. Ours would last all day in Malls, Libraries, etc. We would have 3-5 events a year, so you can see, anyway you go, it does mount up.