By Shawn Yingling
When attracting new members and working to keep current members happy, church leaders often look to update their worship centers with modern amenities, plan community events and engage in other initiatives designed to increase engagement.
While it might not be at the forefront of a busy church leader’s mind, every time there is a change at the facility it’s important to make sure it is covered by their current insurance policy, and if not, explore what coverages may be available. Without proper insurance, an organization may be required to pay out-of-pocket for expenses, resulting in financial burdens that could ultimately have a huge impact on the religious organization.
Here are 7 scenarios when a church leader should double check their policy to make sure their insurance products fit their needs.
1. Property value changes
Building additions, facility upgrades or acquisitions of new locations can all add to the value of a religious property. These can require changes to the existing insurance coverage. Property insurance policies provide financial protection if a structure is damaged or theft occurs. Property insurance values should be tailored to the specific needs of the church, such as location, size and construction type.
Not only does the actual building change in value as additions are made, but the building contents do as well. Big ticket items such as office equipment, furniture, organs and musical instruments are all items that a church should ensure are covered with their policy.
2. New operations
Any time a church adds a new operation or service, such as a fitness center, daycare or school, new exposures emerge that may require changes to the existing general liability insurance policy. General liability insurance helps to protect a church if a lawsuit or similar claim occurs. For example, if your religious organization adds a new fitness center and a member or outside party becomes injured, the potential for a claim increases. Insuring your operations with the proper liability coverage is essential to help protect the assets of the church.
3. Changes in contractual obligations
Who signs contracts or makes commitments on behalf of your church? Has your church ever entered into an agreement with another group or business to help further its mission? Verbal and written agreements are commonplace in church business, but a breach of, or conflict within an agreement could serve as a major hindrance to church leaders through increased financial burden. Not only could someone sue a church as the result of a discrepancy, but they could also sue a board member or employee of the church directly. For this reason, churches should take verbal and written agreements seriously and discuss them with their insurance representative.
4. Staff changes
Worker’s compensation insurance policies rely on having accurate and up-to-date information from church leaders for their employees, including payroll information and job classification information, which is based on the duties employees preform.
A church’s general liability policy will also need to be updated when new staff is added such as teachers, daycare staff, administration or clergy. Involuntary terminations of employees can also open the door for liability risks such as wrongful termination or discrimination. It is a good idea for churches to invest in a directors and officers’ liability (D&O) policy, which provides protection for religious organizations and their directors, officers and employees against possible allegations arising from hiring and firing decisions.
5. Special events
A well-managed event can generate positive publicity and raise much-needed funds to help further the church’s mission. But special events such as food sales, concerts and volunteer opportunities, whether they are on the church property or across the world, are another good reason for leadership to check with their insurance agent.
Having an onsite event, such as a fair or fundraiser, may open the door for risks on the premises which insurance can help provide assistance with, like an accidental playground injury. An off-site event, like a sporting event or retreat, may require a contract, permit or additional insurance, so leadership will want to look at their policy to see what extra coverages may be needed.
Foreign travel or missionary trips also require leadership to review their policy. If your religious organization has employees that travel/work outside the country on behalf of your organization, then you have a need for foreign liability insurance. Missionary travel accident insurance is also a good idea for people traveling for missionary or volunteer work. From an auto accident on an unsafe roadway, to a sudden illness, it’s important to ensure that you’re equipped to protect your organization and its members during these costly trips.
6. Use of the church facility by outside party
It is commonplace for churches to open their facilities for community or private events. It is important for a church to utilize a facility rental agreement with the outside party to detail the obligations of each party to limit potential liability. Also, outside groups should be required to obtain and demonstrate proof of liability insurance prior to the event.
7. Change/additions to church automobiles or vans
Anytime a church obtains a new vehicle or there is a change with the usage of their existing vehicles, an update to their commercial auto coverage should follow. Auto liability insurance helps protect an organization if a person is injured or someone else’s property is damaged as the result of an accident. Physical damage coverage provides assistance for the actual vehicle so that it is able to be repaired or replaced including instances of collision or theft.
As a church grows, so do its exposures. It is always wise for church leadership to check in with their insurance agent as these updates happen to see what coverage options are available.
Shawn Yingling is president of Glatfelter Religious Practice (GRP), a leading insurance program for churches, synagogues, temples and other religious institutions, www.GlatfelterReligiousPractice.com. GRP is a division of Glatfelter Insurance Group, one of the largest program managers in the U.S.