Insurance Coverage for Churches

Many of today’s medium sized and large churches operate a lot like a business, with employees, financial statements, and risks. So, like a business, churches today need to purchase insurance. However, a church has risks and needs that differ greatly from the average business.

For years insurance for churches revolved around or was solely for the church building itself. Therefore insurance companies created policy packages that had aspects of liability but the focus of the coverage was on the property side. Such policies have also been developed for landlords, and are usually called fire policies or in some cases church policies. The benefit of these policies should be the lower cost. However, the downfall is that, sometimes, you get exactly what you pay for.

Understand that property insurance is still just as important as it was in the past. However, a mid-sized to large church today really needs to be prepared to purchase commercial policies such as general liability. Churches with packaged policies are probably vulnerable to the different types of risks that churches face. Risks such as claims of sexual molestation and physical abuse can be transferred by the adding this coverage to your existing commercial policy. Other popular insurance additions to commercial lines for churches include directors and officers coverage and excess or umbrella coverage.

Depending on the laws of a particular state, a church may also be required to purchase workers compensation coverage for their employees. Church officials need to sit down with an experienced insurance broker to determine if this coverage is needed. Predominately, due to the misconceptions that surrounds this particular coverage.

Auto coverage should also be purchased cautiously by churches. Churches that lease or own vans and buses need to be assured that the different activities that require the use of these vehicles are covered under the policy. For example, many churches offer after school tutoring programs where the student must be picked up from school. If you have a policy that states that the auto coverage extends only to the normal business activities, an accident occurring while kids are in route to the tutoring program may not be covered. Simply put, an after school tutoring program may not be construed as a “normal business activity,” of a church.

Although churches need commercial insurance coverage just as much as a business; church leaders may find that obtaining insurance coverage can be much more difficult. The wide spread publicity of sexual molestation in churches coupled with the huge settlements that accompany these claims have served as motivation for churches to be insured. Yet, at the same time these claims have also created obstacles for some churches trying to get the necessary coverage. Insurance companies now, prefer churches that perform background checks on those working with the youth and often request that staff and volunteers take at least one class on child protection.

In many cases the ability to gain funding for outreach programs may also revolve around their insurance coverage. Churches that attempt to get grant funding from the local, state, and federal government are often required to provide proof of insurance coverage. The terms of the grant may spell out the type of coverage needed and the policy limits.

At any rate, churches need to review their insurance coverage annually to ensure that all of their programs and activities are covered under their policy. And, to be certain that their coverage and policy limits are adequate given the type of risks that churches face.

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