Church Insurance: The Most Important Things You Need To Cover
Criminals have been known to run into a church yelling “Sanctuary!” to avoid capture. Partly because churches have always been a place of safety and security.
But the reality is our world involves risks. And churches aren’t immune.
Knowing how to properly insure your church will give you confidence that an unforeseeable occurrence will not end your ministry.
Here are 15 things every church insurance policy should have.
1. Protection Against Legal Action
The reality is that every church is susceptible to a lawsuit by both its members and from guests or other individuals. The basic church insurance coverage needed is called general liability insurance and it has two parts:
A. If Someone Claims They Were Injured
A general liability policy will provide insurance for a covered claim of bodily injury. An example of this could be someone slipping and falling in the sanctuary and holding the church liable.
B. If someone claims their property was damaged:
The second part of a general liability policy is coverage for accusations of property damage. An example of this could be if the church is leasing their building and the landlord states that the church caused damage to the building.
2. Church Insurance for Your Property
Every church needs coverage for the property owned by the church. This could include the actual church building or if the church is leasing their location the property inside the building such as the pews and musical instruments.
A. For the Church building(s) itself
Church building insurance covers events like fire or wind that could cause complete or partial damage to the church. The way the premium is determined is based on square footage, construction, year built and location. For older churches, where updates or renovations were done, this is very important.
B. For the Items in the Church
Imagine if you turned the church upside down and shook it: everything that falls out should be covered under a separate limit that is the combined value of all those items.
C. For items that leave the Church sometimes
For any items that leave the church grounds, they will need to be covered under a separate policy. The coverage for items inside the church are only for items that never leave the grounds.
D. Coverage for property damages that put your ministry on hold
If a claim occurred, in which the church was damaged to such an extent that services could no longer be held, the church would still have ongoing expenses such as payroll. Also, if services continued but were held at another location, there would be additional costs. Every church insurance policy should include this vital coverage.
3. Coverage for Accusations of Sexual Abuse
Any organization that works with children has the potential to be accused of a crime of a sexual nature. An accusation can be made regardless of whether any wrong doing occurred. And the church must defend itself.
A. If someone claims they were sexually abused:
Accusations of a sexual nature are not covered under a general liability policy and require a separate policy. This is a coverage that no church insurance program can afford to be without. Sadly, the statistics of child sexual abuse are staggering, with 93% of sex offenders describing themselves as “religious.”
4. Protection for Counselors
Many ministers offer counseling for church members and some also have counselors on staff. Allegations made against a counselor are not covered under general liability and must be insured under a separate church insurance policy.
A. If someone claims that they were injured through counseling
As with coverage for accusations of sexual abuse, a counselor does not have to have done anything wrong to be faced with legal action. By making sure that your church is covered you will gain peace of mind in knowing that you are defended.
5. Coverage for Employee Injuries
Any organization that has employees, whether full time or part time, need a workers compensation policy. Churches are no different.
A. State laws vary
The legal requirement to purchase workers comp varies based on your state. For example, in Georgia churches with 3 or more employees are legally required to purchase workers comp.
Even if you are not legally required to purchase this coverage in your state, you could still be held liable for a work related injury. Even with just one employee. The lack of a legal requirement to buy work comp does not remove the church from liability.
6. Protection In the Event of a Flood
If a flood occurs, the damages will not be covered under the church’s property policy. To obtain coverage for a flood your church will need to purchase a separate flood insurance policy.
A. Flood insurance is administered by the National Flood Insurance Program
B. It’s important to get a flood policy in place before a storm
Most flood policies do not go into effect until 30 days after the purchase date. For this reason it is important to get a flood insurance policy in place long before bad weather is looming.
7. Insurance for Accusations Made by Employees
When a church employee makes an accusation against the church you need to be prepared. By purchasing a policy called “Employment Practices Liability Insurance” you will be. This is also known as EPL insurance.
A. Accusations that can be covered:
- Sexual Harassment
- Wrongful Termination
As with many other church insurance coverages, an allegation can be made even if nothing wrong ever happened. Claims made involving employees can be very large and general liability does not provide any coverage.
8. Special Event Coverage
Many churches hold special events from time to time such as Easter egg hunts or fall festivals. Depending on the nature of the event it may or may not be covered under your current policy.
A. Location of the event:
For events occurring off of church property it is very likely that you will need a special event policy to have coverage.
Aside from location, there are many other factors that will determine whether your current church insurance policy will cover your special event or if a separate policy is needed. It’s best to make sure you’re working with a church insurance specialist and to contact your agent at the earliest planning stages of the event.
9. Insurance for Missions
Missions can present a variety of church insurance needs.
A. Foreign or Domestic
If the mission your church is taking part in or sponsoring is outside of the United States you will most likely need to separate policy for the mission.
B. Worldwide Liability
Most liability policies only provide coverage for claims that occur inside the United States. If your church is conducting missions outside of the United States you will need a policy that will provide coverage abroad.
C. Travel Medical
Missionaries traveling outside the United States will need access to medical coverage in the event of an emergency.
D. Kidnap and Ransom
For travel in some developing countries coverage for Kidnap and Ransom is very important to provide reimbursement from losses associated with kidnap, extortion, and hijacking.
10. Covering Your Church Van or Bus
Every church that has a van or bus needs a special policy to make sure they are covered. The policy that covers your church van or bus has two parts:
A. Coverage for other people and property if there is an accident: If your church van or bus is in an accident that is your fault and causes injury to another person or damages their property, this portion of the policy would provide coverage.
B. Coverage for damage to your bus or van if it is your fault: This part is for if your bus or van is damaged and it’s your fault. This coverage is often called “comp & collision” or “full coverage” on a personal auto policy but it works the same way for your church van or bus.
Churches who use 15 passenger vans are at the most risk. Because these vehicles were originally designed to carry cargo instead of people they do not have many safety features. Sadly rollover accidents are quite common and often involve fatal injuries.
11. Protections for Accusations Against Your Church Board
A very common type of legal action taken against churches is when a claim is made against a church’s board of directors. The church insurance coverage for this is called “Director’s and Officers Insurance” and it is extremely important:
A. Coverage for Behavior: Basically this church insurance policy covers your church if the board makes a decision, such as appropriation of funds, and a church member or other party sues.
B. As with other coverages, you do not have to have done anything wrong: In modern America anyone can sue anybody for anything. What does this mean for your church? It means you have to protect yourself with the right kind of insurance.
12. Coverage for Large Claims
Not only are the number of lawsuits higher today than ever before but the settlement amounts are growing larger as well.
A. Umbrella Policy: There is no more cost-effective way to increase your liability coverage in the event of large claim than an umbrella policy.
13. Protection if Your Computers Are Breached
Wrong. While most news stories about data breaches focus on really large companies, the reality is that most of these crimes are targeted at small businesses and non-profits such as churches.
A. Any Church with a connection to the internet is at risk for a data breach: If any member or employee’s private information is stored in the church computer system the church is liable.
- First Party: This coverage is for employee personal information.
- Third Party: Likely even more important than First Party this coverage is for member’s or guests private information that the church has on file.
B. Churches that use church specific social media sites may be especially vulnerable: Some churches utilize closed social networking sites that sometimes can be used for tithes or other offerings. For any church utilizing a site like this, coverage for data breach is even more important.
Tragically criminals actually view churches as “easy targets” for data theft
14. Coverage if Money Is Stolen
A crime policy is a very important church insurance coverage to protect against the loss of money or securities. Your property policy will not likely provide any coverage in the event of a criminal act.
A. Theft or Burglary: A crime policy can cover theft or burglary from an unknown party.
B. Employee Dishonesty: Sadly theft sometimes is perpetrated by an employee or representative of the church.
People in the church often dig very deep to give and every church should make sure their gifts and offerings are protected from thieves.
15. Coverage for Church Volunteers
Volunteers are often the lifeblood for any non-profit, including churches. For this reason churches need to be especially concerned with making sure they are covered for any liability.
A. If a Volunteer is hurt:
- Your general liability policy may not provide coverage for claims involving volunteers.
- In many states, churches are not exempt from workers compensation coverage for volunteers. To learn more about the appropriate coverage for church volunteers check out our other blog Workers Compensation: Insurance For Church Volunteers.
Partnering with a Reputable Church Insurance Agency
Churches must be diligent in making sure their insurance needs are properly placed. A custom church insurance program written by a church insurance agency will help assure that your ministry will be able to continue even if the unforeseen happens.
Our agency is proud to provide insurance for many churches across the country.
Call us today at 888-800-4824 to learn more or to get a church insurance quote.