The first step to protecting your church is understanding the different types of insurance that are available. That includes having an understanding of commercial property insurance, liability insurance, workers compensation, and commercial auto. Choosing the right insurance company is important.
Knowing the different coverages you need, and how they protect you, prepares your church for the sudden and unexpected.
What type of insurance coverage does a church need?
A church needs a specialized policy to cover the unique risks that are associated with leading a religious institution. Organizations like faith-based schools and camps need these tailored coverages too. You should also work with an insurance company that specializes in those services.
There are 4 important coverage areas:
I’ll break down each coverage area in a little more detail.
#1 Property Coverage
It is so important that your place of worship is physically insured. Simply put, this coverage protects your buildings and everything inside.
Example claims churches experience include:
- Damage or loss caused by natural disasters such as a tornado;
- Accidents like an electrical surge in wiring that causes a fire;
- Vandalism done to the exterior of the church’s building;
- Damage to a roof or siding caused by wind.
Building Contents
Building contents are the items inside your church buildings. This includes your church property like pews, sound systems, computers, or other specialized equipment used for worship services.
Personal belongings of the Pastor would also be included.
#2 Liability Insurance
Liability coverage protects against lawsuits and claims that are brought against the organization. The policy will provide the financial protection and resources needed to pay a judgment or settlement, as well as legal and court fees.
There are many different types of liability coverage, some very specific to religious organizations.
Important Liability Coverage Churches Need
These are some of the coverages we recommend for churches and religious organizations. There are many others depending on the unique needs of your organization.
Directors & Officers (D&O)
This provides coverage for financial damage claims against your church board members and clergy stemming from decisions they make on behalf of the organization.
Religious Freedom
This protects your ministry against claims of emotional injury resulting from belief-based decisions, ministry activities, and communications.
Sexual Misconduct
This will protect against lawsuits and claims brought by a member of the congregation who alleges sexual abuse or misconduct by clergy.
Employment Practices
This provides protection for claims of emotional or personal injury, or financial damages that result from firing, hiring, or promotion of an employee.
#3 Workers Compensation
Does your organization have employees? An employee is someone who is compensated through company payroll and receives a W-2 each year. This is different from a 1099 subcontractor, so it is important to know the difference.
Workers Compensation covers medical expenses for work-related injuries and provides compensation to the employee while they are off from work recovering. It will also pay benefits if an employee dies as a result of injuries sustained due to work-related activities.
#4 Commercial Auto
Whether your church provides transportation for church members or employees, it’s important to have Automobile Insurance. This protects against the damage or loss of vehicles used in connection with ministry-related activities.
It will also provide medical expense coverage for injuries sustained in the church-owned or rented vehicle when driven by a staff person or volunteer.
How much does church insurance cost?
Many factors impact the cost of insurance. It is important that you work with an agent who has access to religious organization-specific insurance coverage and is familiar with your church needs.
The following are some of the factors that can affect your premium:
- Claims History – This factor oftentimes has the greatest impact on premium. A clean claims report will save you money.
- Coverage Needs – If you’ve visited one church, you’ve visited one church; every single church is unique. Their operations, ministries, and risks can vary greatly.
- Church Location (zip code) – for example, depending on the zip code of your building, the premium can go up or down based on the area’s crime rating.
Is there an insurance company for religious organizations?
It is very important for churches to partner with a company that offers insurance coverage that meets the unique needs of religious organizations.
Two insurance companies that specialize in churches, place of worship, and related ministries to consider are:
How to buy church insurance?
Insurance for churches can seem like a daunting task if you’re not sure where to begin. We recommend that you call an insurance agent to discuss your service needs and they’ll provide the best recommendations.
Church insurance is a specialized service that can be confusing to navigate without the guidance of an expert. Insurance agents that specialize in religious organizations will save you time, money, and will protect your mission.
What if I have more questions?
CTG Insurance is here to help. Give us a call, send us an email or a text, and we’ll be glad to answer any questions.
About the Author: Anton Thornquist
