Ensuring the safety and future of your church means embracing insurance solutions designed to protect your organization from unexpected challenges.
Insurance is a critical aspect of risk management for any organization, and your church is no exception. Your ministry faces numerous risks, ranging from property damage to employment disputes. Without proper insurance coverage, these risks could lead to significant financial burdens and threaten your ministry’s ability to continue its work.
The Current Insurance Market
The U.S. insurance market is experiencing one of the toughest cycles in history, with many businesses seeing premium increases or policy non-renewals. This cycle or “hard market” has created a challenging situation for churches, with some church insurance carriers putting a pause on writing new policies in certain parts of the United States or even completely pulling out of entire regions.
This limited supply, along with rising premiums, has forced many churches to “shop” for coverage and request quotes from various carriers. In turn, this has caused insurance carriers to take longer to produce quotes and to implement much stricter underwriting guidelines. With today’s hard market, it’s important to consult with your insurance advisor to make sure your ministry is protected.
Key Insurance Policies for Churches
Every church is unique, and your insurance needs will vary based on factors like size, location and services provided by church staff. While your insurance agent will be able to offer guidance based on your church’s specific situation, here are a few insurance policies that are commonly held by faith-based organizations. This list is not comprehensive, and additional coverages are available that may be recommended for your church.
Building Insurance
Also known as commercial property insurance, this coverage can protect your property, buildings and the assets you store in them. From broken windows to burst pipes, property coverage can help you get back to normal in the wake of a storm, fire, vandalism, theft or other covered peril.
General Liability Insurance
Liability insurance is important for all businesses and organizations, including churches. General liability insurance is designed to mitigate financial risks by helping to pay for property damage and injuries sustained by third parties on your property. This coverage can also assist with legal fees, settlements and judgments that arise due to a covered incident.
Directors and Officers (D&O) Liability
Directors and officers coverage is designed around the risks involved with serving as a director or officer of an organization. D&O insurance can safeguard your church leaders from personal financial loss due to a lawsuit, along with helping to cover lawsuit-related costs incurred by your organization.
Commercial Auto Insurance
If your church owns, leases or operates buses, vans or other vehicles, you may need commercial auto insurance. Like your personal car insurance policy, this coverage can pay for property damage and bodily injuries sustained due to an accident involving an employee.
Professional Liability Insurance
Also known as errors and omissions (E&O) insurance, professional liability coverage can help with claims related to counseling or pastoral care services provided by your church, such as lawsuits alleging emotional or physical harm inflicted by a church leader.
Cyber Liability Insurance
Your church may be utilizing digital platforms for operations, bulletins, donations and more. While technology can streamline communications, it also makes your ministry more vulnerable to cyber threats. Cyber liability insurance helps cover the costs associated with data breaches, cyberattacks and other cyber incidents, including notification expenses, legal fees and recovery efforts.
Workers’ Compensation
Your church, like other employers, is responsible for providing a safe working environment for your staff. Workers’ compensation insurance covers medical expenses and lost wages for employees who suffer work-related injuries or illnesses. And, it’s more than just a precaution – in many states, workers’ compensation is a legal requirement.
Employment Practices Liability Insurance (EPLI)
EPLI can help with claims involving employment-related issues like wrongful termination, harassment or discrimination. Adding a third-party enhancement to an EPLI policy is often recommended for churches; this enhancement provides coverage for claims that are brought by a third party against your church or employees.
Special Event Insurance
If your church hosts weddings, fundraisers or other community events, a standard general liability policy may fall short of providing adequate coverage. A special event insurance policy can help with the costs of property damage or injuries sustained at your event. It may also include coverage for lost deposits and other fees if your church has to cancel an event at the last minute.
Abuse and Molestation
Considering that churches often work with minors and other vulnerable populations within their congregation and in outside ministry, sexual misconduct and physical abuse coverage is a wise form of protection. This specialized coverage can help with the costs associated with responding to allegations of sexual abuse.
Reducing Insurance Costs
Churches can implement several strategies to potentially reduce their insurance costs while maintaining adequate coverage.
- Risk Assessments: Regularly evaluate your church’s premises, activities and operations to identify potential risks. Proactively identifying and mitigating these exposures may help prevent claims, which can reduce insurance costs in the long run.
- Safety Programs: Develop and enforce safety programs for staff and volunteers, including first aid training and emergency preparedness drills. Demonstrating a commitment to safety can result in discounts from insurers.
- Background Checks: Perform thorough background checks on all employees and volunteers, especially those working with vulnerable populations like children.
- Property Upkeep: Ensure that the church’s buildings and grounds are well-maintained. Regular inspections and timely repairs can help prevent costly claims.
- Bundle Policies: Consider purchasing multiple insurance policies from the same provider, which may allow you to qualify for bundling discounts.
- Coverage Reviews: Regularly review your insurance policies with your agent to ensure they meet your church’s current needs and adjust coverage as needed.
The Bottom Line
From youth programs and special events to counseling and administration, your church faces a variety of exposures, so ensuring that your ministry has the right insurance coverage is crucial.
By understanding the types of coverage available and working with your insurance advisor to navigate the tumultuous insurance carrier marketplace, your church can develop a comprehensive insurance and risk management strategy that prioritizes results, safety and peace of mind.
This information is courtesy of Higginbotham, one of the nation’s largest independent insurance brokerage firms. With a deep understanding of the unique risks faced by religious organizations, Higginbotham is committed to helping churches protect their mission and assets through tailored insurance and risk management solutions, www.higginbotham.com.
