What insurance does a church need?

Churches are centers for community events, weddings, celebrations, gatherings, and solace. They host Sunday worships, preschools, daycares, bible study groups, and community meetings. To many people, churches have always been a sanctuary, a place for safety and reflection. However, this does not shield churches from the many risks it may face. On the contrary, these values they provide expose them to liabilities that many other non-profit organizations may not encounter. Insurance is designed to provide financial stability for the insured. Proper insurance provides the church with peace of mind regarding any financial loss it may incur due to unforeseen circumstances.

Here are some insurance coverages that every church should consider:

Church Property Insurance

Property insurance covers property owned by the church, from your church’s buildings to personal property inside the buildings, such as furnishings, landscaping, business personal property, etc. The insurance covers the property damages from covered events such as natural disasters, theft, robbery, fire, sewer back-up, etc. With adequate property insurance, your church is protected from the unexpected financial hit from replacing damaged property.

Another property insurance that the church should consider is auto insurance. Churches usually have buses or vans that need be covered with an auto insurance policy that provides coverage for damages to the vehicle, or bodily injuries incurred.

Church Liability Insurance

Contrary to what you might think, churches and religious organizations are often sued. General liability insurance covers the church against claims on bodily injury, property damage, and personal injury. The liability insurance for the church should cover church staff, employees, volunteers, church members, and church boards. For many liability claims, an allegation or accusation can be made even if nothing wrong has ever happened. Therefore, churches need to be prepared for circumstances where large legal costs or damage can occur. Some liability insurance the church should consider includes:

  • Employment Practices Liability: The church needs to be protected when an employee makes an accusation against the church. This is also known as EPL insurance and is a necessity for all churches. This insurance covers the damages and legal costs when an employee sues the church for sexual harassment, wrongful termination, discrimination, and retaliation.
  • Sexual Acts Liability: Since churches often have activities with children’s participation, they are subject to the potential of being accused of sexual crimes. This is an insurance coverage that all churches should have.
  • Directors and Officers Liability: It is a common legal action when claims are made against a church’s board of directors, trustees, and officers. This optional endorsement protects covered claims of financial damage resulting from decisions made by the organization’s leaders.
  • Broad Scope Cyber Liability Insurance: Due to high concentration of children under 18, churches are easy targets for data breaches. This optional endorsement protects your ministry against property damage, financial damage, or emotional injury claims that result from ministry activities related to computers and electronic data. Coverage includes protection against claims of computer use, electronic commerce, and data breach errors, as well as covered errors made by IT contractors working on your organization’s behalf.
  • Religious Freedom Protection: This insurance protects your ministry against emotional injury claims resulting from the ministry’s religious communications, religious activities, belief-based decisions, and discriminatory acts.

Coverage for Church Employees

  • Workers’ Compensation Insurance: The legal requirement to purchase workers’ compensation varies by state. This coverage ensures that the employees will receive benefit if injured on the job. Even if the insurance coverage is not required, the church should still consider purchasing insurance for workers’ compensation since it will be liable for work related injuries.
  • Health Insurance: The church may consider purchasing health insurance for its employees to attract talent.
  • Mission Insurance: Most liability insurance only provides coverage that occurs domestically. The church may have missionaries overseas and thus insurance is needed to provide protection for emergencies such as medical coverage, kidnap & ransom, and other liabilities.

Mission Trip Insurance for Church Groups: What Coverage Do You Need?

Your ministry extends beyond the walls of your church and the boundaries of your community. What coverage does your church need for mission trip insurance? What if a mission building collapsed and incurred damage costs of $10,000? What if a missionary was struck in an accident and incurred medical costs of $20,000? What if there are no readily available medical facilities in some mission trip areas, and greater medical expenses may be needed for medical transportation? Some churches may assume that their domestic property and liability insurance will cover any unexpected events during their formal travel, this is not true! Mission trip insurance provides peace of mind and the coverage your church needs when the unfortunate occurs. Wherever the mission trip takes you, mission trip insurance is essential to cover any damages or financial impacts from unexpected events from foreign mission trips.

For a small amount of insurance premium, mission trip insurance provides protection for employees and volunteers traveling for a mission trip. Depending on the insurance provider, some companies provide a one-step solution that includes all the necessary coverage for short-term and long-term mission trip needs. Other companies provide flexibility to let you pick which coverage you need to protect your church and the missionaries.

The church should consider mission trip insurance that include the following coverages:

  • Foreign Liability Insurance: Medical emergencies, accident-related claims, and lawsuits related to religious acts are common liability concerns that your church and the missionaries could face. The liability insurance for mission trips can cover claims from bodily injuries, property damage, and personal injury for missionaries.
  • Foreign Medical Insurance: The travel medical insurance covers any medical expenses from accidents, illness, emergency medical conditions on foreign or domestic mission travels.
  • Emergency Medical Evacuation: Medical evacuation may be necessary depending on the location of the mission trip. For some remote areas, there may not be readily available medical facilities, and medical transportation such as a helicopter may be needed.
  • Kidnap and Ransom Coverage: While on a mission trip, no one wants to think about the possibility of getting kidnapped and being trapped in a ransom situation. Unfortunately, this situation does occur and it is prudent to consider purchasing insurance coverage for the worst-case scenarios. This coverage covers events such as kidnap, threats, hijacks, extortions, etc. The insurance protects against financial impact and provides a certain amount of reimbursement from ransom payment, legal advice, travel and accommodation costs, security consultants, etc.
  • Foreign Auto Insurance: The insurance covers any damages and costs to auto vehicles from accidents occurred on the mission trip.
  • Commercial Property Insurance: The insurance covers your church’s property during missionary trips.

To mitigate all these risks involved with a foreign mission trip, the church should consider the following while making mission trip plans:

  • Factor in mission trip insurance premium into the mission budget. Discuss with insurance carriers on what the potential quotes are for your desired coverage, and take into account of those in your mission budget.
  • Understand the details of the coverage and get written proof of the coverage: Ask for the written proof of insurance and understand the details of what exactly are covered from the mission trip insurance.
  • Evaluate the need for insurance and obtain additional coverage if needed: After you understand the coverage for the mission trip insurance, evaluate whether the coverage is enough for the need. Sometimes there are significant gaps in coverage, and there may be events that may not have been covered. In this case, you may want to obtain additional insurance. Work with the insurance carrier to identify the optimal amount of coverage needed.
  • Be careful when planning to go to a remote area, or places with political unrest or threats of violence. Some insurance policies provide coverage for security assistant services. If conditions are extreme and volatile, consider rescheduling the trip if necessary. Some insurance coverage provides reimbursement for rescheduling and cancelling costs.

Does a church need special insurance?

Insurance products are designed to protect the financial stability of the insured. While nobody likes the idea of an extra expense, insurance becomes essential when a loss happens. Without proper coverage, a ministry could experience hundreds of thousands of dollars in out of pocket expenses due to a loss.

Some insurance products such as Workers Compensation and Auto Insurance are mandated on the state level. The decision of whether to purchase or not other insurance products is left to the discretion of the insured (although other institutions such as banks may require specific insurance as it relates to your dealings with them).

Is insurance for churches different than any other business?

Churches have a very unique component to their operation. Most businesses have one primary occupation –a daycare provides care for the children; a retail store sells merchandise; a restaurant sells and serves food items.

Churches and ministries are the opposite. While their primary purpose is to be a house of worship, they often run a variety of programs and operations to help their communities. Some of these include providing daycare/nursery services, a school,  AA meetings, camps, mission trips, crime prevention and re-entry programs and more.
Does a church need insurance? ABSOLUTELY!

Do you employ a pastor?

Does your church provide a daycare facility to parishioners’ children?

Does church clergy use cars to fulfill ministry goals?

All these situations (and many more) can result in accidents or losses that will require an enormous financial commitment.

Your pastor can break a leg, slipping on wet floor.

Parishioner’s child can become injured while in the daycare.

A church official can get into an accident while driving church’s vehicle.

These are just a handful of very common situations that might occur. Since the church provides many invaluable services to it’s community, it’s exposure varies greatly.

Purchasing insurance for your church

When considering insurance options for your church it’s important to work with a knowledgeable agent and insurance carrier that specialize in providing insurance for churches. Only an agent that has been working in this niche for a long time, will be able to correctly identify the gaps in coverage the general insurance policies might have, leaving your church unprotected in case of a loss.

While a lot of policies are standardized, there are a number of endorsements and extra coverages that can be added or removed to suit your particular operations.

Church Insurance Specialists, have partnered with Brotherhood mutual to bring you the specialized insurance solutions for churches and ministries. We know and understand churches and we are heavily involved in our church community. We share your passion for doing God’s work and improving our communities.

Our goal is to be your trusted partner and advisor in all matters of insurance, not just another sales office.

Your calls and emails will be answered right away and you will receive our honest recommendations as to what coverages you might need. We are happy to review your current policy and discuss any gaps in coverages you might have.