A church is much more than just a building, it is a place of spiritual renewal and gathering for prayer, counsel, ministry, and community. However, the various activities and services offered by churches create unique insurance exposures. Church properties often serve as meeting places for civic and community groups, while some remain unoccupied during weekdays. Depending on the church's practices, doors may be kept unlocked or locked with limited access. Additionally, churches frequently expand their ministries to include programs for children, youth, and counseling services. These vital ministries present unique risk management challenges that demand consideration by the governing body of the congregation. One of the first things you should think about to negate these risks is to acquire liability insurance for your church.
What type of insurance do churches need?
The insurance needs will vary depending on the property owned and the ministries supported but a good list to get started with should include Property as well as Liability insurance that includes coverage for the premises and operation, Auto, and Professional exposures. Additionally, the church should consider an “Umbrella” policy providing additional liability coverages. Worker’s Compensation insurance is mandatory for all employees of the congregation (pastor, sexton, office staff, etc.) and should be part of the church’s insurance program.
What is Property Insurance?
Your property policy insures the church’s property. This includes the building(s) and their contents owned by the church. Items that are permanently attached, such as pews or “built-in” organs might be treated as part of the building while other items, such as musical instruments, choir robes, hymnals, contents of the office, etc. are treated as personal property. However, the total value of all items (buildings and contents) can be combined into one “blanket” limit for all owned property. It’s especially important to consider items that are highly valued, rare, or irreplaceable and talk to your insurance agent regarding the best way to ensure these items. Is an appraisal needed to determine the true value? Should any items be scheduled separately? When the correct property limits are established, your property insurance should be as broad as possible, protecting the church property from not only fire and wind damage, but theft, vandalism, and other causes of loss. The property insurance should also address the unique insurance exposures based on the age of the building – if there is a major loss, there may be additional costs incurred due to changes in building codes and the property insurance needs to be amended to cover those costs.
Why Does My Church Need General Liability Insurance?
Every church is susceptible to a lawsuit by visitors, members, or anyone using the church facility. General liability insurance can respond to claims if someone is injured or there’s damage to their property while on church property or participating in church activities. This insurance typically addresses the damages and/or litigation costs that might arise from church operations and activities. It is easy to believe that “nothing will happen” and “my congregant would never file a claim against the church” but the reality is thousands of claims are filed yearly against churches. Examples include slip and fall injuries - someone slips on that new coat of wax in the hall, falls down the steps, or trips over the rug inside the back door. Another source of increasing litigation arises from children’s ministries, including daycare, schools, Sunday Church School, and Youth programs. Churches are responsible to protect the children and youth participating in their ministries and there is special liability insurance required to respond to allegations of abuse.
Why does my church need Auto Insurance?
This is another self-explanatory one - if your church owns any vehicles the coverage is necessary and mandatory in most states. Even if your church does not own a vehicle the church might still be exposed to liability when someone is driving on behalf of the church. The Pastor is traveling to visit a member, or the treasurer is on the way to the bank to deposit the offering and they are involved in an accident. Since they were acting on behalf of the congregation, the church may find itself involved in litigation arising out of the auto accident. Non-owned auto liability should be included when there is no owned auto, but members of staff are driving their vehicles on behalf of the church.
What is Umbrella Insurance? Why does my church need Umbrella Insurance?
Umbrella insurance answers that question in the name itself – it’s designed to provide additional limits over most of the liability insurance discussed above. Insurance agents are often asked, “how much liability insurance do I need?” The answer is “how much can you be sued for?” Of course, there is no definitive answer to that question, but you can purchase additional layers of liability insurance to protect against claims by including an umbrella policy as part of your risk management program.
What is Professional Liability Insurance? And why does my church need it?
Professional liability insurance sometimes referred to as errors and omissions (E&O) – provides financial protection against claims of negligence, misrepresentation, or inaccurate advice. This includes the costs associated with any expenses or legal fees required for your defense, as well as any resulting judgments against you. Read more about professional liability insurance here.
Churches are vulnerable to various types of professional liability exposures which should be addressed as part of their risk management program. Professional coverages can include Directors and Officers Liability, designed to respond to allegations of wrongful acts by the governing board in their management responsibilities. Another area of professional liability exposure is counseling services provided by the pastor(s). Commonly referred to as Pastoral Professional liability, the coverage is intended to provide the pastor and the organization with liability insurance, including defense against claims of harm caused by the pastor’s counsel. Even if the claims are false, your church could incur significant legal expenses in defense against these types of allegations, so having the appropriate coverage is important.
What is Workers Compensation Insurance? And why does my church need it?
Workers Compensation is mandatory coverage designed to protect the employees of the church from injuries that occur while they are working within the “scope of their duties.” The policy will address the medical expenses incurred by the injured employee and, if the injury causes an extended period of disability, the policy will address that as well, based on the benefits established for your state.
Your church needs to have the proper insurance coverage for your unique ministry needs and designing that risk management program is one of our areas of expertise. Contact the insurance professionals at Blue Ridge Risk Partners and we would be happy to review and discuss the unique insurance needs of your church.
Marcia Baker, CPCU, CIC, CRM
Director of Underwriting