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View Full Version : Do photo clubs need insurance, incorporation?



dsphotog
10-Aug-2014, 13:15
I'm vice pres. of a small local photo club, (about 22 members) do we need to incorporate?
Do we need liability insurance?
Any recommendations for insurance companies?

SMBooth
10-Aug-2014, 14:21
Not sure what country your in but you do in Australia.

Michael Kadillak
10-Aug-2014, 19:26
We have had a large format B&W photo club in Denver for over three years now and the thought of incorporation and insurance never once came up.

Why in God's name would one need to consider such actions? Here in Colorado we get together once a month to show prints and receive critique and participate in an occasional photo show. Rather like going to a cafe to drink coffee and talk photography. We have all learned from the process.

Winger
10-Aug-2014, 19:57
The clubs I was in in PA had to have insurance to be able to meet at the semi public areas they did - the contracts for the rooms specified that. I don't remember for sure, but I think it was around $300 per year for a million or so of coverage. It means the meeting location won't be held liable for accidents with equipment and things like that. I don't remember all the details, but I think it was fairly standard. There are also different types of organizations for incorporating so that the group can collect dues, but not have to pay taxes on them. If a group got together somewhere and no money changed hands and they didn't have to rent space for those meetings, then incorporating would probably not happen.

Bob Salomon
10-Aug-2014, 20:12
We have had a large format B&W photo club in Denver for over three years now and the thought of incorporation and insurance never once came up.

Why in God's name would one need to consider such actions? Here in Colorado we get together once a month to show prints and receive critique and participate in an occasional photo show. Rather like going to a cafe to drink coffee and talk photography. We have all learned from the process.

Watch what happens if someone falls during one of these get togethers and is injured, or worse and consults an Attorney, or if their insurance company decides to get reimbursed.

Richard Johnson
10-Aug-2014, 20:24
Why call it a club at all? Friends meet at bars and cafes, keep it informal and limit exposure.

Drew Bedo
11-Aug-2014, 06:51
I have been affiliated with a photo club (The Houston Photographic society) here in Houston Texasa since the late 1980s. None of that has ever come up that I know of.

I am currently active with a camera collectors group, also dince the 1980s. This group used to put on the Houston Camera Show near Hobby airport . . .never did a corporation or insurance that I know of there either.

What Is your concern?

dsphotog
11-Aug-2014, 09:27
Watch what happens if someone falls during one of these get togethers and is injured, or worse and consults an Attorney, or if their insurance company decides to get reimbursed.

Exactly our concern. We have been an active group for 30 years, holding meetings at members homes, presenting gallery shows, taking group field trips, etc.
I'm wondering if having everyone sign a release or waiver would be suitable protection.

rdenney
11-Aug-2014, 10:06
It depends on the nature of your activities. If people meet in regular public places that do not require prior arrangement, then there's probably little liability. So, a group that gets together socially at a restaurant can usually hide behind the restaurant's liability insurance. But if a photography club meets at a school, the school administration will probably demand insurance indemnification.

The issue is when someone plans an event at a private or normally inaccessible public location (like a school or the meeting area of a community center) that is not their home. (At home their homeowner's insurance would provide liability protection). If you plan an event, and someone outside the club is injured at the event, or in any way because of the event, the person who planned the event may get sued. Even if the injured person doesn't want to sue, their insurance company that covered their medical expenses may sue for reimbursement outside their control. Even if the suit is without merit, the cost of defending against it will often be more than the person can afford.

Protection from individual liability is one of the main reasons clubs that hold such events incorporate, and one of the main reasons they buy insurance. Every community band I've been in, for example, was incorporated and carried insurance. In part, the insurance was required to hold public performances in public spaces like schools. And in part, it was to protect the officers from personal liability. The cost of one such group that performs in public half a dozen times a year is several hundred dollars to provide the required $2M in liability coverage.

It's all about risk, and risk is about exposure and consequences. If the exposure is low enough, even severe consequences might be so unlikely that the risk is supportable.

Rick "past and present officer of several simiilar organizations" Denney

rdenney
11-Aug-2014, 10:13
Exactly our concern. We have been an active group for 30 years, holding meetings at members homes, presenting gallery shows, taking group field trips, etc.
I'm wondering if having everyone sign a release or waiver would be suitable protection.

If the only attendees are members, then it's probably no issue. Most organizational liability insurance only protects against injury to non-members. If it's a member-based organization, members may not be able to sue on the principle that one cannot sue himself. (Where I knew such law, there was a clear distinction between owner-run corporations and member-run corporations. Most social groups are member-run corporations--it's the members rather than the stockholders who elect officers--and therefore are responsible for their own safety as a group. If someone is injured as a result of the negligence of another member, as it was explained to us, they would have to sue that individual. My wife and I carry personal umbrella liability insurance to protect against things like that, and it is quite inexpensive because the exposure is low.)

For gallery showings, I think it depends on the gallery and what sort of insurance they carry. If it's a public gallery, the responsibility for safety is probably theirs. If it's a makeshift gallery in a school auditorium, then see my previous post.

Rick "who had to deal with this last year when a member had a medical emergency that ruined a carpet at a retirement home where we were performing" Denney

Richard Johnson
11-Aug-2014, 10:17
Rick "who had to deal with this last year when a member had a medical emergency that ruined a carpet at a retirement home where we were performing" Denney

Please don't leave us hanging like that.

dsphotog
11-Aug-2014, 10:29
Not sure what country your in but you do in Australia.

We are in California, USA.
Thanks

dsphotog
11-Aug-2014, 10:30
Thanks, Rick "Great info as always" Denney

Great info, as always.

ic-racer
11-Aug-2014, 12:01
Insurance due to fear of getting sued...I guess extortion has many faces.

rdenney
11-Aug-2014, 17:38
Please don't leave us hanging like that.

He lived.

Rick "but lost about a quart of blood" Denney

Bob Salomon
11-Aug-2014, 18:06
It depends on the nature of your activities. If people meet in regular public places that do not require prior arrangement, then there's probably little liability. So, a group that gets together socially at a restaurant can usually hide behind the restaurant's liability insurance. But if a photography club meets at a school, the school administration will probably demand insurance indemnification.

The issue is when someone plans an event at a private or normally inaccessible public location (like a school or the meeting area of a community center) that is not their home. (At home their homeowner's insurance would provide liability protection). If you plan an event, and someone outside the club is injured at the event, or in any way because of the event, the person who planned the event may get sued. Even if the injured person doesn't want to sue, their insurance company that covered their medical expenses may sue for reimbursement outside their control. Even if the suit is without merit, the cost of defending against it will often be more than the person can afford.

Protection from individual liability is one of the main reasons clubs that hold such events incorporate, and one of the main reasons they buy insurance. Every community band I've been in, for example, was incorporated and carried insurance. In part, the insurance was required to hold public performances in public spaces like schools. And in part, it was to protect the officers from personal liability. The cost of one such group that performs in public half a dozen times a year is several hundred dollars to provide the required $2M in liability coverage.

It's all about risk, and risk is about exposure and consequences. If the exposure is low enough, even severe consequences might be so unlikely that the risk is supportable.

Rick "past and present officer of several simiilar organizations" Denney

So a group plans a shooting day at the local waterfall and someone falls in the river and breaks their leg and claims that they only went to this event because the club had a planned outing there. Or maybe the local camera store holds a shooting day at the wolf preserve and someone gets bitten, or trips. Or the club invites a speaker to address the group on portrait lighting and the light falls on the model.

Who has the liability?

rdenney
11-Aug-2014, 19:22
So a group plans a shooting day at the local waterfall and someone falls in the river and breaks their leg and claims that they only went to this event because the club had a planned outing there. Or maybe the local camera store holds a shooting day at the wolf preserve and someone gets bitten, or trips. Or the club invites a speaker to address the group on portrait lighting and the light falls on the model.

Who has the liability?

If it's a member-run group and the person is a member, then my understanding is that the group is not liable, and the person is on his own. If the person is not a member and is injured because of what the group has done as a group activity, then the group can be held liable. If there is no group with membership, then everyone is liable for their own torts, which is how most of us go through life most of the time anyway. But the organizer can be the person liable, and for some activities, the exposure can be enough to want to manage the risk, especially if it makes sense for the group to be incorporated anyway (such as for tax status).

That's how I understand it, anyway. I'm sure there are state-to-state differences.

Rick "not a lawyer" Denney

Bob Salomon
11-Aug-2014, 19:48
Insurance due to fear of getting sued...I guess extortion has many faces.

I view it differently as insurance against the possibility go getting sued.

Greg Miller
11-Aug-2014, 20:03
Insurance due to fear of getting sued...I guess extortion has many faces.

Definition from Merriam Webster - Extortion: the crime of getting money from someone by the use of force or threats

It would be extortion of the insurance company threatened to cut a photo club member with a piece of ground glass if they did not buy an insurance policy from them.

Do people buy health insurance because they fear getting sick? Do people buy life insurance because they fear death? No. They choose to buy insurance because sh*t happens and for them it is more prudent to have insurance just in case.

Richard Johnson
11-Aug-2014, 20:21
It's not the insurance companies to blame, it's the people who sue out of greed and the lawyers who entice them. If you didn't have unethical people making frivolous lawsuits then the reasonable cases would be settled quicker with greater satisfaction and true justice. We'd also have lower insurance rates and a nicer society to live in.

Drew Wiley
21-Aug-2014, 08:23
I think it's nuts to have any kind of work collective without at least liability insurance. This IS California I'm speaking about. We have lot of great white sharks patrolling offshore, and lots of ambulance chasers on shore. They gotta eat too.

Peter Gomena
21-Aug-2014, 08:43
Our group is insured. We hold public events and even serve wine at show openings. Better safe than bankrupt.

dsphotog
21-Aug-2014, 08:47
Yes, but if I understand what liability insurance does is pay for injury or damage to non-members or a meeting site.
It seems incorporation protects individual officers and members from lawsuits.
Is this correct?

I'd like more info, if anyone having a policy could provide me contact info for a provider.

Drew Wiley
21-Aug-2014, 09:49
Anybody can hypothetically sue anybody else for anything. Just depends on whether the circumstances make Pavlov's lawyer salivate or not. There are plenty of
online guides outlining when incorporation makes sense and when it doesn't. You need to generate significant income from an enterprise, for one thing. But before
you get carried away, it is best simply to review whether the basic property insurance coverage itself carries relevant injury liability clauses. Common sense is the best first line of defense. The next basic step is to pay a trusted lawyer to review your insurance and co-op contracts and look for any serious loopholes. That usually involves a small token fee. No big deal. You also have to find some way of filtering who can and can't join, so Rasputin can't simply walk into your life. But
this is a little more tricky unless the whole nine yards is tightly held. Once again, get some coaching with a lawyer familiar with these specific kinds of scenarios.

Drew Wiley
21-Aug-2014, 10:20
... But a lot also has to do with the nature of the facilities themselves. If your club is just temporarily renting a gallery space, for example, they on their behalf should provide you with a copy of their relevant coverage. On the other hand, if you're getting involved in a long-terms lease involving any kind of shared craft space, likea collective darkroom, you need to be very careful about what the property owner is responsible for, and what you are. And common sense dictates that everything
possible be done to make the area safe, up to code, and even ADA legal. You also have to be aware of what any immediate neighbors are like. For example, I'd never set up a gallery or quality workshop adjacent to any restaurant or garage - just too risky. We had a wonderful craft collective down the street completely
burn down due to a bunch of idiots adjacent, with a lot of careless wiring. I've witnesses that scenario more times than I can count.

Bob Salomon
21-Aug-2014, 12:55
Yes, but if I understand what liability insurance does is pay for injury or damage to non-members or a meeting site.
It seems incorporation protects individual officers and members from lawsuits.
Is this correct?

I'd like more info, if anyone having a policy could provide me contact info for a provider.
I don't think the liability is limited to only members. That insurance should cover anyone who would be included under its' coverage.

We do many of the major trade shows like the Photo Plus Show in NYC, PMA/CES, NAB, Rangefinder, etc. And for all of these, or most of them, we need to have an insurance policy that covers attendees and particpants at the show and name the show sponsors on the policy.

While nobody has ever tried to collect on our policy it brings up an interesting question. You mentioned covering non-members and left out members.
So, we have our own booth within the trade show. Attendees at our booth range from the general paying public, who paid to get into the show, people from the general public that received free trade show passes from us or other distributors/manufacturers/exhibitors, employees of the exhibit facility, employees of other exhibitors who are looking for our products, wifes/girlfriends/husbands/boyfriends/friends on any of the people listed below.
Our understanding is that anyone that is injured in our booth or by our products displayed in our booth is covered by the mandatory policy that we have to take out for the show. Why would your members not be covered?

Just because you are an officer of a corporation does not mean that you can't be sued. A liability attorney is going to sue everyone. He might only collect from the deep pockets but your defense of a suit could cost more then settling the dispute.

An example:

Back in the 70s through the mid 80s a group of photgraphic manufacturers and distributors banded together and put on 6 photo exhibitions a year with a trade show, gallery and classes on photo. These were done in 6 different cities each year throughout the USA. To co-ordinate this the group (called IPOSA for the International Photo Optical Shows of America) hired an experienced show director and his wife. Each of the companies paid an annual fee (based on the size of their display space at the shows) and, at the end of the year, any profits from show admissions, food, etc. were split between the companies and any additional expenses not covered by the annual dues, show proceeds, etc. were then shared equally by the exhibiting members.

This was quite a successful arrangement and went on for several years with no problem. But then the attendance at the shows began to drop pretty quickly and by 1984 or 85 we gave notice at the end of the year that we would no longer be a memebr and would no longer exhibit at the shows beginning 1/1 of the following year.
The shows went on for one or two more years but it was then discovered that the show director was diverting funds for his own use and that there was a considerable amount of monies owed to the show decorator (that is the company that sets up the booths, carpets the halls, brings the merchandise to and from the freight dock, store the empty containers, vacuums the floor, etc.) and they then sued the member companies. Including us who had dropped out previous to the rounds of shows that created the shortfall.
Yes, the Sheriff did knock on our door, smoking a cigar, in a baggy suit and an old hat and did hand me the papers naming us as defendants in the suit for something that occured after we formally and properly had left the group.
Our share of this shortfall was around $5,000.00. Our attorney told us that we had a highly defensible position. But it would cost us more then the amount that we were being sued for to defend that position. We elected to settle and pay the $5,000.00.

o, we were sued because we had belonged to an organization, that the director of that organization embezzled funds after we had left that organization and that the party that was owed money because of that embezzlement sued all former and current memebrs of that organization and it was cheaper to pay then to defend ourselves.

Just because you are an officer or a member doesn't mean someone can't sue you.

Drew Wiley
21-Aug-2014, 13:04
Lucky the IRS didn't go after each and every one of you. That's been know to happen too. Gotta read the fine print with them also whenever anything involves a
contract. All it takes is one bad apple.

Bob Salomon
21-Aug-2014, 13:32
Lucky the IRS didn't go after each and every one of you. That's been know to happen too. Gotta read the fine print with them also whenever anything involves a
contract. All it takes is one bad apple.

IRS had nothing to go after us for. Everything was reported and any taxes due were paid. The only one to get stiffed was the decorator and they got their monies when they sued the organization and the members and former members.
What their attorney did was go back several years and sue anyone who had been a member previously since the membership by the time of the suit was very small and future shows had already been cancelled.
So, since we had been a member we also got named in the suit.

Drew Wiley
21-Aug-2014, 13:46
Doesn't matter - if just one participant acquired income illegally and didn't report it, the IRS has been known to go after everyone in the membership. It happened to my own brother. Yeah... he, along with all the other innocent partners, finally beat the IRS in court - but there went ten years of his life, and they of course held his the money in the meantime - had to pay it back with interest, so it still inflicted quite a burden. It happened to someone right on the next block. He lost everything - his shop, his equipment seized, basically his living taken from him due to something a partner did, not him, analogous to what you're describing. I'm not stating this to start an argument over IRS practices, but simply to point out how any kind of group contract needs to be reviewed by someone knowledgeable before you sign. All these various areas of law get complicated. Nowadays most trade show venues carry a full package contract, including all the necessary loss and liability insurance for the duration of the event, and it's not elective. And they charge dearly.

rdenney
21-Aug-2014, 19:08
Yes, but if I understand what liability insurance does is pay for injury or damage to non-members or a meeting site.
It seems incorporation protects individual officers and members from lawsuits.
Is this correct?

I'd like more info, if anyone having a policy could provide me contact info for a provider.

Basically, yes.

Rick "any commercial insurance agency will know what you need" Denney

rdenney
21-Aug-2014, 19:22
Bob, I didn't read it all. But most commercial concerns are not member-based corporations, but rather stock corporations. A member of a member-run corporation is suing himself if he sues the corporation--that's the idea as it was presented to me. Cheap insurance won't cover that--people should have their own insurance to cover mishaps against themselves. You might be surprised at what happens if you ever need to test your policy with an injury to one of your own members.

As to needing to be big to incorporate, nah. I'm president of an arts corporation with a $10K annual budget. We are incorporated, tax-exempt, and insured, and none of that was burdensomely expensive to set up. Some of it required a lot if paperwork, particularly the tax status.

Rick "you can get insurance for anything if you pay enough" Denney

Sheldon N
22-Aug-2014, 10:42
A couple comments from someone who works in the industry...

If the current camera club is not a formal organization (ie. no bank account, no charter, no standing as a legal entity) then there is nothing to sue and no assets to protect. You can't name an organization that doesn't formally exist in a lawsuit.

If the current camera club has no assets, there is not really any incentive to sue it. Buying insurance can sometimes create the financial incentive to sue that would not otherwise exist.

Incorporation of the club can provide financial insulation for the members from the club's liabilities. However, in any incident a good lawyer will sue both the club and you individually, negating that advantage.

Individual members who have homeowners insurance are already protected for their personal liabilities, even away from home, as long as the club isn't overly formal or a business.

The biggest liability risks to a camera club are 1) premises liability, where the club has oversight/responsibility for the general safety of an area or for equipment that could injure someone. 2) Fiduciary liability to their own members for dues/fees/etc. 3) Possibly personal and advertising injury liability, if you got into contests/prizes/publication.

If there are no assets, no real situations where the club has oversight for premises safety, and no circumstances where you are contractually obligated to obtain insurance in order to use a facility... then I would not incorporate or buy insurance.

dsphotog
24-Aug-2014, 15:21
Since our club is on Meetup, I did a search for "Meetup liability" and found their waiver, I think (at least for now) I'll print it and have attendees sign it.