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Insurance Disaster Preparedness: Things Churches Never Consider

How to ensure your church has the insurance coverage it needs to protect against threat of disaster.

"There can be unpredictable situations when dealing with insurance claims that can put a congregation member in a conflict of interest with the insurance company. So, strongly consider an agent who is independent of your church."

It's much too easy for faith-based organizations to focus on saving money rather than protecting resources. Frugality is understandable because, of course, funding the church's mission is the primary goal. Has your organization considered, however, that saving money in the short run may put your organization in a position that an unexpected event could close its doors forever?

Disaster preparedness involves many aspects, some of which are obvious. Other considerations, though, are easily overlooked because faith-based organizations tend to stay people-focused rather than business-focused. Normally, people-focus is good for a church, but in disaster planning, business planning must come first.

Insurance is the single most important consideration in disaster preparedness, and selecting an agent should be based on his or her experience as well as the strength of the insurance policies he or she offers. All churches wish to maximize relationships built through their congregation, and this is often a good route for obtaining services. There can be unpredictable situations, however, when dealing with insurance claims that can put a congregation member in a conflict of interest with the insurance company. This is not fair to the church or to the member. So, strongly consider an agent who is independent of your church.
Choosing an agent involves research and patience. Keep in mind that this is a person you will be (or should be) working with at least twice yearly to first develop your insurance package, then to thoroughly review it every six months to ensure the coverage is up to date based on the changes regularly occurring within your organization. Don't get locked in on shopping just the price; service and coverage are more important.

There are significant questions you need to ask of each agent when shopping for insurance. When comparing their responses, you must be objective. These questions are a good start (you can add more based on your church's mission):

1. Does the agent's underwriter(s) offer coverages that are specifically geared toward faith-based organizations?
2. How many churches does the agent currently cover?
3. What are the sizes of these churches and how do they serve their congregation and mission fields?
4. What claims have they handled for their church clients?
5. What are the top risks your own church faces and what are the agent's recommendations?
6. If your church plans to travel to serve its missions, ask if the agent has the ability to write coverage for other states and countries against loss or injury.
7. Does the agent's underwriter(s) have policies to cover your church's staff and volunteers against accusations of wrongdoing?
8. What kind of liability coverage is offered for staff, congregation, and guests who have an accident or are attacked on your church premises?

You will need to understand coverages, deductibles, overlaps, and gaps with multiple policies. Your best options are typically multiple policies specifically geared toward separate threats with potential carryover. An umbrella policy can sometimes be a great product to bolster all coverages and lower overall costs. Replacement policies will also offer varied conditions that must be understood. (A structure built on your campus in 1980 may have cost only a million dollars, but in 2015 the price to replace that structure will be significantly higher. How your policy covers this loss can vary greatly.)

Any agent who cannot provide responses to these simple questions may not have the experience or coverages necessary to truly protect your church. You want to work with someone who is familiar with churches.

Get at least three references and get in touch with them to discuss the agent's performance. Don't be shy about doing this.

The other important part of disaster planning is your specific "in-house" plan. There should be a written procedure that is quickly and easily accessible to everyone on your disaster team. Included in the plan should be a list of team members who should be made aware of a disaster situation and all of their contact information along with assigned tasks. Example tasks or roles might be: Primary Contact or Key Decision Maker, Communications Leader, and Facilities Leader.

The Primary Key Decision Maker should always be the first notified and should have ready access to all the necessary documents such as surveys, drawings, deeds, insurance policies, and inventories). These documents should be stored together in a secure place, such as a fireproof safe and should be copied and/or backed up electronically. The Communications Leader coordinates all spoken, written, televised, and Internet communications. This person should have experience dealing with the media and have a clear directive as to the message the church wishes to communicate. The Facilities Leader should have intimate knowledge of all facilities and campus infrastructure so potential losses can be quickly mitigated. The Facilities Leader should also have a list of volunteers who can be called upon at a moments notice.

Your team should not only think through possible disasters but train staff and members on best responses for specific threats. Develop procedures and checklists and store materials and resources that can be beneficial in an emergency situation. After any emergency situation, always take time to review how the team responded to determine strengths and weaknesses. Then, incorporate all lessons learned back into your plan. You will never look back on the time, effort, and money spent preparing for a disaster once you have been through one. Your decisions today will greatly impact the outcome for the future.

RON LOWE is a project manager for Jacksonville, Fla.-based Stellar (stellar.net), a general contractor company. Lowe, LEED AP BD+C, GBI-GGP, specializes in working with faith-based clients.

KYLE REESE is the senior pastor at Jacksonville, Fla.-based Hendricks Avenue Baptist Church (habchurch.com). Dr. Reese holds degrees from Wayland Baptist University, George W. Truett Theological Seminary at Baylor University, and Northern Baptist Theological Seminary.


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