Thanks to technology, the global economy, and other factors, the list of loss-generating events that most churches find the need to insure themselves against keeps expanding.
Speaking from his perspective at West Des Moines, Iowa-based GuideOne Insurance, Senior Church Risk Manager Eric Spacek reports that the main causes of property insurance claims continue to be wind and hail damage from storms and fire damage from such causes as electrical wiring, lightning, open flames, cooking, and arson.
On the liability side, “The No. 1 cause of claims is falls on the property, typically caused by such things as defects in the parking lot or sidewalks, the presence of snow and ice, uneven or obstructed walking surfaces, inadequate lighting, substances on the floor, and handrails that are missing or loose,” Spacek says.
Following falls, Spacek adds, “The other major causes of liability insurance claims are recreational activities, such as injuries on the playground or in sports activities; maintenance or construction-related injuries to volunteers; and sexual abuse or molestation.”
Tech-generated risk exposures
In addition to more well-established sources of risk, the uses—and abuses—of technology, along with problems arising from use of church facilities by outside groups, present a number of liability issues for today’s churches, according to Mike Devereux, an advisor with Clearwater, Fla.-based insurance agency Connelly, Carlisle, Fields & Nichols.
“Perhaps the most prevalent risk to churches involves so-called ‘distracted driving’ by church employees, agents, and volunteers,” Devereux says.
Texting and cell phone use while driving have been shown to significantly increase the risk of an auto accident, according to Devereux. “It also substantially increases the driver’s liability,” he notes, “and if an employee, agent or volunteer is using a vehicle for a church trip or program, the church may be held liable for the negligent behavior of the driver.”
Churches can lessen their liability in this regard if a clear policy regarding texting and cell phone use while driving is implemented, according to Devereux, who adds, “Some churches, including my own, have written policies prohibiting cell phone use while driving for church employees.”
Devereux says that churches may also want to consider including in their policies guidelines regarding other factors that lead to distracted driving, including activities like eating, drinking, playing loud or distracting music, and engaging in lengthy discussions or debates while driving.
Meanwhile, growth in the use of social media such as YouTube, Facebook and Twitter has led to increasing claims of “cyber-bullying,” particularly for churches that have schools, youth groups, or camps, creating another area of potential liability.
“For obvious reasons, this is much more difficult to control or prohibit since the behavior may take place off premises,” Devereux says.
To lessen liability, any type of bullying behavior should also be addressed in the employee/volunteer handbook, Devereux reports. “Additionally, it would be wise to educate students and youth involved in church programs, either at school, after school, or any other extra-curricular activity. The church should have clear policies that it adheres to a zero tolerance policy regarding any form of bullying in any context, including off-premises activity.”
A third area of liability for churches involves the use of facilities by groups not affiliated with the church.
“Third parties should read, understand and sign a ‘Hold Harmless’ agreement before they are allowed to use a church facility,” Devereux says. This type of legal document usually includes language adding the third party as an “additional insured.”
“Such agreements should be standard operating procedure when dealing with outside groups,” Devereux adds, “but are absolutely necessary if the activity or event includes an activity or event that involves a large number of participants, recreational or sporting activities, and/or ongoing activities, such as renting or leasing space on a recurring basis to any outside group or organization.”
Meanwhile, spiraling prices for scrap metal (a function of rapid industrialization in countries such as India and China) have resulted in an increasing level of thefts of items containing aluminum, brass, bronze and especially copper, according to Patrick M. Moreland, vice president of marketing for Merrill, Wis.-based Church Mutual Insurance Co.
“We have seen an alarming increase in copper theft claims the last few years,” Moreland says. In 2011 alone, he notes, Church Mutual customers reported more than 1,500 claims—totaling some $10 million—involving copper theft.
Most of these claims involved theft of copper from air conditioning units, according to Moreland. “These claims cost far more to settle than the cost of the copper, as the AC units can be badly damaged or destroyed,” he notes, adding, “It is not uncommon for the same church to be victimized more than once.”
Church Mutual recommends a number of steps that can help churches reduce the likelihood of losses from this type of theft. They include:
? Restricting entry onto the grounds to one entrance during low-traffic periods.
? Protecting AC units with chain-linked fencing or caging around the equipment and wiring.
? Utilizing exterior lighting to illuminate all outside equipment.
? Cutting back trees and shrubbery to increase visibility/eliminate hiding places.
? Asking law enforcement officers to patrol your facility on a regular basis.
? Asking neighbors to report suspicious activity to law enforcement.
? Considering locating new AC units in more secure locations, such as rooftops (but don’t leave ladders outside that can be used by thieves to gain access).
? Consider utilizing video cameras, tamper sensors, and irreversible screws.
? Secure materials nightly during construction projects—don’t leave wire spools or piled piping out in the open.
If you witness a theft in progress, do not try to stop the thieves yourself. Moreland advises instead, “Immediately notify the police and gather information, such as a description of perpetrators, vehicle description with license plate number, and an explanation of what was taken or damaged.”
Post-theft, immediately provide local recycling centers with a detailed description of what has been stolen. As Moreland adds, “Reputable scrap metal yards likely will take the names of individuals who bring in materials.”