The Basics of Church Insurance

1. Church Insurance Protect your Place of Worship

2. Do you really need church insurance? • The short answer is yes! Why? • Your church is a place of worship, solace, and redemption. • The exposure to certain risks could still financially burden the church. 

3. What risks is your church exposed to? • People Risk Although categorized as non-profits, as a religious organizations, your church has a responsibility to take care of the employees, staff, and volunteers. • Fire Risk While some churches like the Notre-Dame de Paris can recover from a deadly fire with large donations, most churches will not be able to depend on donations in the same way. • Technology Risk If you accept online donations and record information of church members on their database, your church is vulnerable to cybercrime and data breaches. 

4. What insurance does your church need? Here are some standard insurance policies that your church will require: • Workers Compensation Insurance • Commercial Auto Insurance • Commercial Property Insurance • Commercial General Liability Insurance • Professional Liability Insurance • Employment Practices Liability Insurance • Cyber Liability Insurance • Inland Marine Insurance • Commercial Crime Policy 

5. Workers Compensation Insurance • Workers compensation insurance offers health benefits and wage replacement to employees sustaining an injury or illness from a work-related accident.  • The employees waive their right to sue the employer in exchange.   • In some cases, the church extends workers compensation insurance to include dedicated volunteers along with their employees.  

6. Commercial Auto Insurance • Commercial auto insurance offers coverage for business-owned vehicles to pay for damages caused due to mishaps or accidents.   • Your church also uses vehicles for various activities and commercial auto insurance can help cover for church-owned or specific non-owned vehicles in the event of an accident. 

7. Commercial Property Insurance • Commercial property insurance covers for any damage caused by disasters that aren’t an act of God (natural disasters). • Churches are architectural artifacts that need protection from these perils such as: • Burst pipes • Explosions • Fires • Vandalism • Theft

8. Commercial Property Insurance • Within a day of the fire that left Notre-Dame, the famous church had raised $790 million in donations for renovation. • Most churches will not be able to depend on donations in the same way.  Church property insurance can take care of such liabilities.  

9. Commercial General Liability Insurance • Commercial general liability insurance (CGL) 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: • Worshippers • Church members • Employees • The church’s largest payout in a sexual abuse scandal was $660 million. In such cases, the policy also covers court defense costs. • Staff • Volunteers

10. 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 covers legal liabilities that arise due to the business’ or employees’ negligence, malpractice, or errors.    • Directors and officers (D&O) insurance covers damages that result from the failure of the leaders of the organization to perform their duties.   • 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. 

11. Employment Practices Liability Insurance • Employment practices 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 • Discrimination 

12. Cyber Liability Insurance • Cyber liability insurance or data breach insurance covers damages and losses caused by data breaches such as: • Cyber-attacks • Malware • Hacking • Cyber vulnerabilities in the church is a huge concern since the church also transfer or record information with the use of technology.  • Covert hackers stole more than $680,000 raised by a church in Iowa to help the homeless and abused women. 

13. 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.  

14. 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 a commercial property policy.   • In 2020, a volunteer overseeing St. Paul’s Baptist Church’s finances in New Jersey was found guilty of embezzling a total of $561,777 over 5 years. 

15. How much will church insurance cost you? Besides the extent of the coverage the church requires, the cost of church insurance depends on a few factors, such as:  • Location  • Size of the church  • Church congregation  • Church services  • Payroll  • Sales  • Experience   • Church-owned artifacts