What Type of Insurance Policies Should Churches And Ministries Have?

There are several types of insurance for churches and ministries policies that can protect nonprofit religious organizations from legal claims. Some of the most important policies include:

• Property Insurance – Every church and ministry should have property insurance. Commercial property insurance will protect the church itself, any other buildings the church owns, and personal property. For example, if a fire breaks out or a storm causes damage to a building, this type of policy will cover any losses, including the cost of repairing and/or rebuilding. To ensure that your policy will cover the total replacement cost, make sure that you opt for coverage that covers the replacement cost of the property, not the actual cash value.
• Liability Insurance – It used to be that churches didn’t have to carry liability insurance, as they were exempt from being sued for any injuries due to negligence. However, times have changed dramatically and this immunity has been eradicated. Today, churches and ministries are subject to the same types of legal action that traditional businesses are sues. This has been evidenced by the many lawsuits that have been filed against countless churches across the nation; particularly lawsuits involving sexual abuse and misconduct.

Since there are so many things that churches and ministries can sued for and held legally liable for, it is important for, the right liability insurance for churches and ministries is vital. Some of the most important liability policies 501(c)(3) religious organizations should carry include:

• General Liability: This type of insurance policy protects churches and ministries from any claims that are made by third parties that pertain to bodily injury and damaged property. The policy should cover all officials, employees, volunteers, and members of the church or ministry. A common claim is a slip-and fall incident on the church premises.
• Sexual Abuse and Molestation: Unfortunately, sexual abuse and molestation cases against religious organizations have become commonplace. Whether allegations are proven to be true or false, it’s important to have a sexual abuse and molestation policy to safeguard your establishment, those who interact with it, and those who attend it as defense costs can go into the hundreds of thousands of dollars.
• Errors and Omissions (E&O): Sometimes people accuse pastors and counselors of physical and emotional harm. Priests, deacons, pastors, and any other clergy members of a church community can be sued for physical or emotional injury to members of the church. Errors and omissions insurance (also know as professional liability) will help to protect the members of the clergy – as well as the church or ministry – from any legal action that relates to physical or emotional injury that may be taken.
• Directors & Officers Liability (D&O): D&O insurance is designed to protect church directors, officers, employees and volunteers against defense costs and payment of damage claims arising from actual or alleged: breaches of fiduciary duty; neglect; errors; misstatements; misleading statements; omissions; breach of the duty of loyalty to the corporation; insolvency; and claims which are not indemnified by the church due to limits caused by state law, derivative judgments or settlements, public policy, equitable considerations, and the provisions of the corporations articles and bylaws.
• Employment Practices Liability: This coverage provides for claims arising from practices associated with employment-related events. It protects a religious organization against claims made by employees alleging discrimination (based on sex, race, age or disability, for example), wrongful termination, harassment and other employment-related issues.
• Employee Benefits Liability: This coverage provides for claims arising from an error or omission by an employer with regard to the benefits an employee should have received. So if a church staff member should have been enrolled in the health plan but was not due to an oversight, then incurred hospital bills that the health insurance should have paid for, that staff member could sue the church.
• Workers Compensation: Each state has its own version of workers compensation laws and coverage. In general, workers comp insurance provide income, medical care, and rehabilitation to employees for illness, injury, or death arising out of, and in the course of, their employment whether or not the employee was at fault.
• Business Auto: Any time a church owns its own vehicles, this coverage is necessary and almost always mandated by state law.
• Hired And Non-Owned Autos (HNOA): This provides liability coverage for church members or employees using their personal autos doing work for the church. If they injure someone while driving on church business, their personal car insurance is primary – and then HNOA will kick in to cover the difference after the personal auto policy limits are exhausted. Rented automobiles are also covered as well.
• Garage Insurance: If your church offers valet parking or accepts donated vehicles and sells or gives them away, you should consider garage liability. This policy covers bodily injury or property damage caused by an accident arising from use of others vehicles.

The above are insurance for churches and ministries policies that all religious organizations should have. However, there are other coverage options that may be worthwhile to consider; health insurance for clergy members and travel insurance could also be beneficial for houses of worship. A reputable insurance broker will be able to help you determine what type of insurance is best for your church or ministry.

How Much Does Church Insurance Cost?

The cost of insurance for churches and ministries depends on several factors: The type of insurance needed, the size of the property, congregation, and staff, and the type of activities that occur on the property are just some of the factors that are taken into consideration. These factors determine the type and amount of coverage needed, which directly impacts how much insurance will cost.

Best Church Insurance Companies

While there are many commercial insurances that offer good coverage for churches and ministries & nonprofit 501(c)(3) religious organizations, following are some of the companies that offer specialty church insurance programs:

• Brotherhood Mutual
• Church Mutual
• GuideOne