Church Insurance Policy Information
Church Insurance. Insurance for churches include specific types of coverage for each particular type of church. Chapel insurance, cathedral insurance, synagogue insurance, and temple insurance are common and usually included in a wider umbrella of a specific church policy. Since church insurance is a specialty insurance type, not many companies offer this coverage.
Churches and other houses of worship conduct religious services for their members. Some provide rental hall operations of their facilities for events such as wedding receptions. Others sponsor sports and athletic teams, events, and programs.
There may be extensive youth activities, from occasional Mother's Day Out programs to full-time preschools, kindergartens, elementary, and/or secondary schools.
Services may be provided for the disabled, handicapped, destitute, or emotionally and mentally impaired, such as a food pantry, Meals on Wheels, job, credit or family counseling. Drug, alcohol, and substance abuse services may be offered.
Missionary trips may be sponsored within the U.S. or in foreign countries. Churches and other religious organizations may take on a variety of ministries that are unique and require a separate review. Consider the type of ministry, such as daycare or elementary school, and then review the narrative that would fit that operation.
Companies that insure churches offer both liability and property coverage with specific options that are tailored to the individual church's needs. Churches require unique coverage to protect them from liability in their particular areas of vulnerability.
While some policies may include liability and property coverage as part of a standard umbrella, others may require that a church purchase separate endorsements for their church insurance policies to really protect them from a 360-degree viewpoint.
Church insurance protects your ministry from legal liability with rates as low as $37/mo. Get a fast quote and protect your congregation now.
Below are some answers to commonly asked church insurance questions:
- What Is Church Insurance?
- How Much Does Churches Insurance Cost?
- Why Do Churches Need Insurance?
- What Type Of Insurance Do Churches Need?
- What Does Church Insurance Cover & Pay For?
What Is Church Insurance?
Church insurance is a type of insurance coverage that is designed specifically for religious organizations. It provides protection for the church, its facilities, its employees, and its members against various risks such as property damage, liability claims, theft, and more.
This insurance coverage can help cover the cost of repairs or replacement of damaged property, legal fees in case of a lawsuit, and medical expenses in case of an accident or injury. It can also help protect against other unexpected financial losses, ensuring that the church can continue its operations even in the face of adversity.
How Much Does Church Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small church and other religious organizations ranges from $37 to $59 per month based on location, membership, services offered, payroll, sales and experience.
Why Do Churches Need Insurance?
Around 63 million people attend church each week in the United States, which makes up around one-fifth of the population. Americans put a lot of emphasis on religion, with people who attend church trusting in the church to provide them strength and guidance. Here are some reasons churches need insurance:
Protection against property damage: Churches often have large and valuable assets, including buildings, equipment, and other property. Insurance can provide protection against damages that may occur due to natural disasters, theft, or other events.
Liability coverage: Churches are responsible for the safety of their congregants and visitors. Insurance can protect against lawsuits and other claims that may arise due to accidents or injuries that occur on church property.
Protection against employment practices: Churches are also responsible for the employment practices of their employees. Insurance can provide protection against lawsuits and other claims that may arise due to discriminatory practices, wage and hour disputes, or other employment-related issues.
Protection against financial loss: Churches may face financial losses due to theft, fraud, or other criminal activities. Insurance can provide protection against such losses, helping the church to maintain its financial stability.
Peace of mind: Having insurance in place can give church leaders peace of mind, knowing that they are protected against a wide range of risks and potential losses.
What Type Of Insurance Do Churches Need?
All of these church insurance policy types can help ensure that the church does not suffer financial hardship if a claim is brought against it.
Churches typically need the following types of insurance:
- General Liability - protects against property damage, bodily injury, and other losses that occur on the church's property.
- Business Property - covers damage to the church building, including theft and vandalism.
- Directors and Officers Liability - protects the church's board members and officers from personal financial loss in the event of lawsuits or other legal actions.
- Workers' Compensation - covers medical expenses and lost wages for employees who are injured on the job.
- Umbrella - provides additional coverage for losses that exceed the limits of other insurance policies.
- Cyber Liability - protects against losses from cyber-attacks, data breaches, and other online risks.
- Commercial Vehicle - covers vehicles used by the church, such as vans and buses, in case of accidents or theft.
It is recommended that churches consult with an insurance professional to determine the specific insurance needs for their organization.
Church's Risks & Exposures
Property exposure is high due to the building being unoccupied the majority of the time, which can encourage vandalism or break-ins. Small fires can quickly get out of control when no one is on premises. Regular daily visits to the premises by a member of the clergy or a parishioner can be very helpful in preventing and detecting losses. Ignition sources include electrical wiring, heating, and air conditioning equipment. There may be cooking facilities for community events. While domestic ranges and ovens are generally used and should be supplemented by portable fire extinguishers, any commercial cooking equipment needs to be properly controlled.
Many churches have installed sound systems that are attractive to thieves, as are computers and other office equipment, video devices, and musical instruments. Some churches, particularly older ones, have ornate woodwork, built-in pipe organs, or stained glass windows that may be expensive to replace in the event of a loss. Smoke alarms and burglary alarms are recommended due to the long hours of no occupancy. Gold, silver, and other valuable items may be part of the church statuary and ornamentation. A fine arts policy should be considered because of the limitation in most policies regarding the theft of such items.
Premises liability exposure is moderate due to the large number of visitors to the premises. To prevent slips, trips, or falls, all areas accessible to clients must be well maintained with floor covering in good condition. All public and life safety standards must be met. Stairways, railings, and floor coverings should be in good condition. The number of exits must be sufficient and clearly marked, free of obstacles, with backup lighting in the event of a power outage.
Parking areas should be maintained free of snow and ice. Background checks should be conducted on all individuals, including volunteers, who work with children, youth groups, or other vulnerable members. Any group trips must provide enough leadership to adequately supervise participants. Churches and other religions institutions can pose an attractive nuisance hazard. There should be adequate security after hours to deter trespassers.
Professional liability and counseling exposures are moderate. All individuals should counsel only within their area of expertise and licensure. Maintaining a members' privacy is critical. Counseling should be done in private areas so others cannot overhear confidential conversations.
Workers compensation exposure varies by state. The church may not be required to purchase workers compensation coverage for members of the clergy even if other members of the paid staff may be. However, if the law permits the clergy and other staff to be covered by workers compensation, failure to do so may result in the church being subject to a lawsuit from an injured worker that could close the church.
Ministers may make house calls or visit members in hospitals or nursing homes. Employees can slip and fall, suffer back injuries from lifting, or incur contact dermatitis, lung, and respiratory illness from working with cleaning supplies.
Crime exposures are from employee dishonesty and money and securities. The employee dishonesty coverage should be extended to include volunteers. All collections should be counted by two individuals. Deposits and disbursements should be carried out by two separate persons. Annual audits should be conducted. Deposits should be made on a regular basis. No money should be kept on premises.
Inland marine exposure is from audio-video equipment, computers, fine arts, mobile equipment used for lawn maintenance, musical instruments, and valuable papers and records for charters and donations. Fine arts may include paintings, statuary, or items used for religious services. Items used off premises can be damaged in transit or stolen.
Commercial auto exposure is very high if the church provides any transportation for members, students, faculty, clergy, or visitors. Churches often operate on a shoestring budget and may purchase older buses or vans for transporting groups. It is critical that these vehicles be maintained on a regular basis with all service documented. Drivers must be trained in the proper handling of these larger vehicles and have appropriate licenses. MVRs must be ordered regularly on all drivers, including those who are voluntary.
Car seats must be used as required by state law. Churches depend on volunteers to provide small group transportation, which increases the hired nonownership exposure. Any drivers who are transporting others in their own vehicles on church-related activities must have adequate insurance.
What Does Church Insurance Cover & Pay For?
Churches, like any other organization, can face lawsuits for various reasons. Insurance policies can help protect churches financially by covering the costs associated with defending against and settling these lawsuits. Here are some common reasons churches may be sued and how insurance can help:
Slip and fall accidents: If a church member or visitor is injured due to a slippery floor or uneven surface, they may sue the church for negligence. General liability insurance can cover the legal defense costs and any settlements or judgments resulting from such claims.
Employment disputes: Church employees may file lawsuits alleging wrongful termination, discrimination, or harassment. Employment practices liability insurance (EPLI) can help cover legal fees, settlements, and judgments associated with these claims.
Sexual misconduct: If a church staff member or volunteer is accused of sexual misconduct, the church may be held responsible. Sexual misconduct liability insurance can cover defense costs and any settlements or judgments resulting from such claims.
Defamation: A church or its members may be sued for libel or slander if someone believes they have been defamed. General liability insurance typically includes coverage for personal and advertising injury, which can help pay for legal defense and any settlements or judgments in defamation cases.
Property damage: If the church is responsible for damage to someone else's property, they may face a lawsuit. General liability insurance can cover property damage claims, helping pay for legal defense and any resulting settlements or judgments.
Auto accidents: If a church-owned vehicle is involved in an accident that injures someone or damages their property, the church may be sued. Commercial auto insurance can cover the costs associated with these claims, including legal fees, settlements, and judgments.
Professional liability: If a church provides counseling or other professional services, they may be sued for malpractice or negligence. Professional liability insurance (also called errors and omissions insurance) can help cover legal defense costs and any settlements or judgments resulting from such claims.
Director and officer liability: Church board members and officers can be sued for mismanagement or breach of fiduciary duty. Directors and officers (D&&O) liability insurance can help cover legal defense costs, settlements, and judgments associated with these claims.
By obtaining appropriate insurance policies and maintaining adequate coverage, churches can protect their financial stability and continue to focus on their mission and service to their congregations and communities.
Commercial Insurance And Business Industry Classification
- SIC CODE: 8661 Religious Organizations
- NAICS CODE: 813110 Religious Organizations
- Suggested Workers Compensation Code(s): 8868 School - Professional Employees & Clerical, 9101 School - All Other Employees
8661: Religious Organizations
Division I: Services | Major Group 86: Membership Organizations | Industry Group 866: Religious Organizations
8661 Religious Organizations: Establishments of religious organizations operated for worship, religious training or study, government or administration of an organized religion, or for promotion of religious activities. Other establishments maintained by religious organizations, such as educational institutions, hospitals, publishing houses, reading rooms, social services, and secondhand stores, are classified according to their primary activity. Also included in this industry are religious groups which reach the public through radio or television media. Establishments of such religious groups which produce taped religious programming for television are classified in Industry 7812, and those which produce live religious programs are classified in Industry 7922. Establishments of such groups which operate radio or television stations are classified in Communications, Major Group 48.
- Religious instruction, provided by religious organizations
- Religious organizations
- Shrines, religious
Church Insurance - The Bottom Line
To find out exactly what type of church insurance you need and how much coverage you should have, speak to an experienced insurance agent to go over your options -as churches face many unique risks.
Additional Resources For Non-Profit Insurance
Find useful articles on business insurance for non-profit 501(c)(3) organizations, charities and associations.
- Animal Shelter & Pet Rescue
- Classic & Collector Car Clubs
- Fraternal Organization
- Goodwill Insustries
- Labor Union
- Parent Teacher Organization
- Public Administration
- Red Cross Chapters
- Salvation Army
- Social Work Services
- Veterans Groups
- Volunteers of America
- Youth Groups
- Specialty Community Service Organizations
- Specialty Nonprofit Agencies
The non-profit industry is an essential sector of society that plays a crucial role in addressing social issues, providing vital services, and promoting community development. Non-profits rely on donations, grants, and volunteer work to fund their operations, and any financial loss or liability can significantly impact their ability to serve their mission.
Insurance can protect non-profits from unexpected financial losses, accidents, and legal liabilities that can arise from their operations. For example, a non-profit organization may need insurance to cover damages to their property, injuries to volunteers or employees, or legal costs associated with lawsuits.
Non-profits also face unique risks such as loss of donations, damage to reputation, and loss of funding. Business insurance can help mitigate these risks by providing coverage for financial losses, reputational damage, and other non-tangible losses.
In addition, non-profits often work with vulnerable populations, such as children, the elderly, or individuals with disabilities. Insurance can protect non-profits from liabilities arising from the care and services they provide to these populations.
Overall, commercial insurance is an essential component of risk management for non-profit organizations. It helps protect the organization's financial stability, reputation, and ability to fulfill its mission and serve its community.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Computers, Valuable Papers and Records, General Liability, Directors and Officers Liability, Employee Benefits, Professional, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Fine Arts, Musical Instruments, Commercial Articles Floater, Computers, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.