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Navigating the Church Insurance Maze

Having insurance protects your church financially, which in turn, protects the vision and ministry --- everything you set out to accomplish in the first place.

Purchasing property and liability insurance for your church was probably not on your list of pursuits when you decided to join full-time ministry. 

However, what would happen if your church building were severely damaged by a tornado, fire or flood?  Do you have the financial reserves to repair the damage while also covering the cost of leasing another location for your congregation to meet? 

What if someone tripped and broke a leg while on church property?  Could you cover his medical expenses or defend yourself against a lawsuit? 

The financial cost of these situations is much greater than most churches will likely have in reserve.  Insurance protects your church financially, which in turn, protects the vision and ministry you set out to do in the first place.  So while it's not a topic that sounds much like ministry, it's still important to making ministry happen.

There are several types of insurance you can consider, so this isn't an exhaustive list.  However, this covers the more frequently used categories you'll want to look into first. 

Property Insurance

This typically covers expenses due to natural disasters, fires, vandalism, theft or other damage to your church facilities.  If a tornado hit your church building and caused enough damage to render it unusable, insurance can cover costs to repair the building and the expenses you'd incur renting another location for church services until repairs are completed. 

General Liability Insurance

This category of insurance is used to protect your church financially should an incident occur on church property (or perhaps during a church-sponsored event off church property).  General liability insurance may cover medical expenses for the individual injured, legal costs to defend against a lawsuit, and expenses incurred if the church is found liable and/or loses the lawsuit. 

In addition to general liability insurance, you'll also want to consider purchasing the following:
Directors & Officers Liability
Your senior pastor, elders, board members and other senior leaders could be named in a lawsuit for decisions they made as representatives of the church.  This insurance can cover legal expenses to defend them in court.

Sexual Abuse & Misconduct Liability
Even with background checks and strong safeguards in place to prevent sexual abuse or misconduct at your church, it's still possible for these tragic incidents to occur.  Whether an allegation is proven true or not, you'll incur legal expenses to defend the church.  This type of insurance covers the legal costs and even money paid should the church lose a resulting lawsuit.

Errors & Omissions, Professional or Malpractice Liability
This typically protects the church financially, if an individual sues claiming emotional harm incurred during counseling sessions or other pastoral guidance.

Where to start looking for an insurance provider?

If your church is affiliated with a particular denomination or church-planting organization, check with them first.  They may have a list of recommended providers.  They may also have negotiated group discounts with an insurance provider you can leverage to save money.

If your church isn't affiliated with another organization, make sure you look for an insurance provider who understands the unique needs of churches and has decades of experience serving ministries.  Also, get quotes from at least 3-5 different insurance providers.  You want to make sure you're getting a quality product and service for a reasonable price.  You owe it to your congregation to research each company, talk with current clients of theirs, and get recommendations from other pastors in your area.  This isn't a small investment and if you need to file a claim, you want to work with a company who will be fair and reasonable throughout the process.

Additional points to consider:

New campuses

If your church launches a new campus, it's highly unlikely your existing policies would cover the new location.  Before you purchase property or enter into a rental/lease agreement, contact your insurance provider to get a quote for adding the new location to your current policy. 

Renovations & Upgrades

Talk with your provider if you're getting ready to do a renovation or add-on to your existing building.  You may want to get insurance for that construction project along with increasing the property insurance coverage amount based on the new value of your facility. 

The same issue goes for when you do a significant upgrade of your technology including sound, lighting, staging, etc.  Make sure you have sufficient coverage to completely replace the building and all it's contents should the worst happen.

Special event insurance

If you're hosting a special event such as a fireworks display, concert, 5K run, camps, etc., talk with your insurance provider about coverage for that event.  Your general and/or property insurance policies may not cover special events, so plan ahead and talk with your insurance provider at least a month or two ahead of time to make sure you're covered. 

Implement risk management to keep premiums reasonable

Invest in risk prevention to reduce the likelihood of needing to file a claim.  Keep in mind that insurance premiums can increase if your provider considers your church to be a higher risk.  Putting safe guards in place such as running background checks on staff and volunteers who serve around children (or money), performing preventative maintenance on your property to reduce the likelihood of electrical fires or safety hazards, documenting and training staff/volunteers on a disaster response plan, etc. are all ways to reduce risk. 

Some insurance companies also provide free or heavily discounted risk management services.  This makes good business sense for them as it can help reduce the number and severity of claims.  It's certainly beneficial to you as well; so don't hesitate to ask the companies you're evaluating if they provide such services.

Leasing & Contractors

Executive pastor Scott Baker has purchased several categories of insurance on behalf of The Bridge Church in Bixby, Oklahoma.  When asked what tips he'd offer to someone looking to obtain insurance for the first time, he mentioned, "If you're leasing a facility, make sure the landlord covers the facility, and if you have contractors, make sure they provide their own insurance. You should be a named insured on any certificate of insurance provided by your landlord, as well as any outsourced services, product providers or contractors."

Researching and purchasing insurance is part of safeguarding your congregation. You'll protect your church's financial health and ensure your church can be around for years to come. 

Do plenty of research, get several quotes, and always read the fine print.  Make sure you know exactly what is covered (and what isn't), so you're not surprised at the worst possible time.  Insurance is one of those things we hope we never need, but certainly want when things go awry. It's worth the time and effort required to get this one right.


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