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.

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