What is church insurance?
The church is a place of worship, solace, and redemption. However, exposure to certain risks could still burden the church financially. Church liability insurance (or religious organization insurance) is necessary for all churches and other religious organizations.
Consider these situations:
- People risk: While the church and other religious organizations are nonprofit organizations, they still operate as a business. With employees, staff, and volunteers under their wing that churches and other religious organizations are responsible for, they may require nonprofit insurance.
- Fire risk: Candles are commonplace in churches and other places of worship; fire is a real risk for these entities. According to MarketWatch, Notre-Dame de Paris did not have insurance. Within a day, the famous church had raised $790 million in donations, as reported by the Wall Street Journal. But most churches will not be able to depend on donations in the same way.
- Technology risk: Although the church doesn’t heavily rely on technology like other organizations, they are vulnerable to some risks. Churches that accept online donations and record information of church members on their database are vulnerable to cybercrime and data breache
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What should your church insurance cover?
Common coverages for churches and religious organizations include:
Workers Compensation Insurance:
Workers compensation insurance offers health benefits and wage replacement to employees sustaining an injury or illness from a work-related accident. In exchange, the employees waive their right to sue the employer.
Church insurance policies usually don’t include on-the-job injury coverages. Therefore, in some cases, the church extends workers’ compensation insurance to include dedicated volunteers along with their employees.
Commercial Auto Insurance:
Commercial auto insurance offers coverage for business-owned vehicles to pay for damages caused due to mishaps or accidents.
Churches use vehicles for outreach and day-to-day travel that may be vulnerable to risks associated with road accidents. Commercial auto insurance can help cover church-owned or specific non-owned vehicles against these risks.
Commercial Property Insurance:
Commercial property insurance covers for any damage caused by disasters that aren’t an act of God (natural disasters). Covered risks include
- Burst pipes
Churches are architectural artifacts that need protection from these perils. According to a U.S. News article, churches have often been victim to hate crimes. Uninsured churches need to bear high renovation costs, which can be an enormous financial burden. Church property insurance can take care of such liabilities.
Commercial General Liability Insurance:
Commercial general liability insurance covers third party damages that occur on the business’s premises or are caused by its operations or products/services.
This policy provides liability protection from risks, accidents, and injuries that may occur within the church for:
- Church members
If such risks cause litigation to the church, the policy also covers court defense costs. Legal defenses, especially for religious organizations, can be costly. An NBCNews report stated that $660 million was the church’s largest payout in a sexual abuse scandal.
Professional Liability Insurance:
Professional liability insurance (PLI) helps protect businesses from any risks that may come with negligence in providing professional advice. PLI is an amalgamation of two insurance coverages:
- Errors and omissions (E&O) insurance: It provides coverage of legal liabilities that arise due to the business’ or employees’ negligence, malpractice, or errors.
- Directors and officers (D&O) insurance: It provides coverage for damages that result from the failure of the leaders of the organization to perform their duties.
Worshippers look up to leaders of religious organizations in times of need. PLI is a policy designed to cover vulnerabilities that pastors and church leaders face due to a negative impact of their advice or religious indoctrination.
Employment Practice Liability Insurance:
Employment practice liability insurance (EPLI) covers any job-related complications employees may face, which are not covered by workers’ compensation and general liability. The policy includes coverage for:
- Wrongful termination
- Sexual harassment
Religious leaders often assume that the First Amendment protects them from such situations. However, a legal commentary on FindLaw.com states that they don’t realize that the protection is limited until it’s too late. Therefore, employment practice liability insurance is an essential coverage for your church.
Cyber Liability Insurance:
Cyber liability insurance or data breach insurance covers damages and losses caused by data breaches such as:
Cyber vulnerabilities in the church is a huge concern since churches also transfer or record information with the use of technology. A 2011 CBS News report states that covert hackers stole more than $680,000 raised by a church in Iowa to help the homeless and abused women. From the personal information of their congregation saved on their computers to their website that accepts donations, the church is susceptible to cybercrime.
Inland Marine Insurance:
Inland marine insurance covers damages or losses of property in transit over land.
Inland marine insurance can come handy when the church transports valuable artifacts to and from another church or a museum.
Additional coverages you may need:
Commercial Crime Policy
Commercial crime insurance covers crime related losses caused due to employee dishonesty, forgery or alteration, theft of money, and computer fraud that aren’t covered by commercial property policy.
According to abcNEWS, a volunteer overseeing St. Paul’s Baptist Church’s finances in New Jersey embezzled a total of $561,777 over 5 years. In such cases, employee dishonesty policy could also come in handy.
How much does church insurance cost?
Besides the extent of the coverage the church requires, the cost of church insurance depends on a few factors, such as:
Size of the church
For a church insurance quote that fits the needs of your church, contact us now!