Not every church member or churchgoer embodies the principles espoused by the church they attend. Not everyone is patient, not everyone is long-suffering, and not everyone is forgiving. Because of this, insurance for churches is a necessity not only for the church or religious body but also for the people who attend or participate in its activities.
The big question, however, is no longer whether the church needs to be insured – it’s when to check to see if your church’s insurance is still up to protecting it against the liability exposures it currently faces.
Read on for an overview of events that should trigger a call to your insurance agent to update your coverage.
Church Insurance Update Trigger 1: You Need More Church Workers or Volunteers
Most churches depend on volunteers in order to accomplish the different services they provide. This number fluctuates throughout the year but is usually a fraction of the membership. The more active members are, the more volunteers are available for the various activities. This may be a good sign that the church is healthy, but it is also an indicator that the risk to which your church is exposed has increased.
The simple reason for this is human error. The more people involved in running church activities (whether they’re paid or unpaid), the higher the possibility that someone will make a mistake that results in damage or injury. This equals an increased risk of lawsuits, even from people considered brothers and sisters in the faith. (Understaffed? Read "Top 5 Risks for Understaffed Small Businesses.")
Church Insurance Update Trigger 2: You’re Launching a New Program or Activity
Although most insurance policies are broad in their wording, there are many situations your current policy probably doesn’t cover. For instance, if your church is planning to start a program that includes counseling troubled youth, you may need to expand your current coverage. If you plan to engage in a feeding program for the less fortunate or run off-premises field trips, you may need to update your Commercial Auto to make sure it covers multiple drivers. There may also be vehicles lent to the church for its use, and this entails a whole different set of liabilities that might not be included in your church insurance, which can be covered by Hired and Non-Owned Auto Insurance.
Many churches work hand-in-hand with various charitable organizations. The church may even choose to become the umbrella organization of certain charities. In these cases, the decision-makers of the church, its leaders, and its board also wield a lot of clout with the charity. This may make the church liable for "wrong" decisions made. Thus, if your church plans to partner with charity groups, it may be a good idea to review your policy with a knowledgeable, up-front, and responsive church insurance provider – you may be in need of additional Directors & Officers Insurance. (Read more about Directors & Officers Insurance in "Do I need D&O Insurance for My Nonprofit? (Hint Yes)."
Church Insurance Update Trigger 3: You Acquire New Property
As more members join your church, you might need to expand the church building. Some churches may need to increase the number of ministers to better serve the membership. This means additional housing in the form of a parsonage. A good number of churches also put up schools so the tenets of their faith can be taught to the member's children at a young age as part of their education. All of these changes increase the risks a church is exposed to and necessitate a review of its insurance policy. (Learn more about Property Insurance.)
The property owned by the church is not limited to real estate or church furniture. There are other things a church owns that are expensive or difficult to replace, or both. Some churches even have in their care religious artifacts, national treasures, historical documents, rare stained glass, and the like. Some religious relics move from place to place and become the responsibility of the local church temporarily. In this case, the church has to weigh whether the current coverage will suffice or if some modification is in order.
So When Should You Review Your Church Insurance Policy?
The straight answer is that insurance for churches should be reviewed whenever there are changes in terms of church personnel (volunteer or employed), church activities and policies, or church property. Because of the "fluid" nature of many churches, it is a good idea for your church leaders to make risk evaluation a habit, so that each change proposed can be evaluated against the current coverage even before a final decision is made.