Religious organizations need insurance, whether they are large or small. As an insurance producer working with clients like churches, mosques and synagogues, you know that these organizations are meaningful to their members. With 71% of U.S. adults affiliated with a religion, religious organizations are vital to many communities. Risk management is an important aspect of keeping their members protected, yet your clients operate on a strict budget that may not handle an unanticipated disaster or lawsuit.
Coverage options like property and liability insurance financially stabilize a church through an adverse claim and enable them to resume operations after natural disasters. Helping your clients find the right insurance policy for the most common — and unusual — risks they face can help protect their religious organization’s leaders, members and visitors. When you offer customized church insurance, you also show that you can help meet your clients’ needs.
Do Religious Organizations Need Insurance?
The simple answer to this question is that while a few types of insurance are essential for religious organizations, others are essential only in some situations. Your clients like churches, synagogues and mosques need insurance, usually property or general liability, to obtain a mortgage. Other kinds of insurance policies that your clients may be interested in can decrease their liability in particular situations. All religious organizations are open to risk, and insurance is a worthwhile investment toward mitigating your clients’ susceptibility.
The most common kind of essential insurance for churches is property insurance. Natural disasters like fires, floods, tornadoes and hail can damage a church’s building. Other types of accidents sometimes happen too, like kitchen fires or slips and falls on church grounds.
Property insurance can cover the costs of these kinds of damages. It may also cover other properties your clients own, like detached community centers. To receive a policy with adequate coverage, your clients should obtain appraisals for the unique fixtures and artwork in their buildings, like stained glass windows, musical instruments or other special features.
Why Do Religious Organizations Need Insurance?
Each type of insurance provides coverage for different circumstances. In all cases, insurance can cover legal costs incurred because of a lawsuit and contribute toward medical bills in case of an accident. There are five main reasons why your clients need insurance for their church or religious organization.
1. Property Protection
Your religious organization clients depend on their buildings to serve their communities and hold worship. Damage from natural disasters can cost a lot in repairs and replacements, and they can also grind church functions to a halt. Property protection brings your client peace of mind and helps church leaders get back to services faster. It provides funds for a renovation or repair after a disaster as well.
Property insurance also covers damages to other kinds of your client’s property, such as:
- Broken audio and visual equipment.
- Ruined inventory or valuables, like from a food bank or collection of artifacts.
- Vandalism to the church building or grounds.
- Stolen or broken items.
2. Auto Liability and Physical Damages
If your clients own vehicles, they need coverage in case of a crash. Many religious organizations own buses or vans or provide their minister with a vehicle. These vehicles may also transport members or children to church events, camps, retreats or other functions. Auto liability insurance covers damage to your client’s property and injuries that may occur in an accident involving a church vehicle. It can also cover property damages a church employee causes to other vehicles while driving a church-owned car.
Some auto liability insurance covers non-owned vehicles, too. It can protect church members involved in an accident while driving their personal car on church-related business.
3. Volunteers and Childcare
Like many religious organizations, your clients likely rely heavily on volunteers. Volunteers engage in all kinds of work, including teaching, caretaking and serving at soup kitchens or food banks.
Your client needs to protect their members by reviewing volunteers carefully, whatever the volunteers’ level of involvement. Church leaders should conduct background checks on all volunteers, especially those working closely with children, such as teachers and nursery workers. Making sure to screen volunteers ensures the safety of the children your clients serve.
It is also appropriate for your clients to put additional regulatory policies in place to minimize liability risks and protect their members. Neglecting to do so could be considered gross negligence and may lead to a lawsuit if a child is injured.
Even though religious organizations choose their employees carefully, employees can still become a threat. Providing your client with special coverages can protect them from employee dishonesty, theft or fraud. Cases like these are serious threats to religious organizations of all kinds.
Employment practices liability insurance is another kind of insurance that covers wrongful acts during the employment process. The most common claims include harassment, discrimination and wrongful termination. Insurance for employment practices protects your client’s board of directors, management and employees from these claims.
Professional liability insurance can also protect church employees from unfavorable accusations. These accusations may be a greater liability for youth workers or ministers who perform counseling services.
Personal injury is one of the top reasons why churches need insurance. A member or visitor may seek legal recourse to cover their medical bills if they become injured on church property. Adequately maintaining church grounds can lessen the likelihood of this scenario, but circumstances like icy sidewalks can be challenging to eliminate. Obtaining coverage for related injuries that occur on your clients’ properties can take care of those potential medical bills.
Accidents on youth trips or other congregational outings can also fall under a coverage plan for injuries. With the right insurance for these kinds of accidents, the churches you work with can save hassle and funds when dealing with an injury.
Types of Insurance for Religious Organizations
Besides property insurance, several other kinds of insurance policies are popular among religious organizations. While these coverage plans apply broadly, each organization or church has unique needs, liabilities and assets. As an insurance producer insuring religious organizations, you should flexibly determine the policy that suits your clients’ unique situations.
1. General Liability
General liability insurance insures churches against common business risks like personal injury and property damage. It can protect your clients’ organizations from the high cost of a lawsuit and can qualify them for leases and other contracts.
An employee may fall off a stage during a worship service and become injured. A delivery person or other visitor could slip on ice on church property or at a church function. In either of these situations, the injured party may blame the church. To protect themselves against these unforeseen expenses, your client may want to purchase general liability insurance to help with medical bills and, if a lawsuit ensues, legal costs. General liability also covers damage caused to a visitor’s property, like an expensive coat lost in the coatroom or a broken laptop.
Your clients incur some risk when using promotional materials related to church functions because of the danger of advertising injuries. In the process of advertising worship services or community events, your clients may unknowingly infringe on another’s copyright or brand. General liability insurance covers these costs and is a good option for churches that host many functions and use advertising for promotion.
2. Business Owner’s Policy
A business owner’s policy (BOP) bundles general liability and property insurance into a single policy. This plan assembles protection for the most common risks your clients could face. While coverage varies across providers, they can often make additional provisions for crime and flood damages.
The property insurance section of a BOP covers damages like a burst pipe in the sanctuary and wind damage to windows and roofs. Your clients can add provisions for vandalism, theft and spoilage of inventory like food. Usually, a BOP protects an organization or church from the events explicitly listed in the policy. Some BOPs instead offer “open-peril” coverage, which covers more risks.
3. Commercial Auto
Church-owned vehicles like buses and vans require a different kind of coverage than other properties. Commercial auto insurance reduces your clients’ liabilities by preventing the loss of business assets in case of an unfavorable claim settlement.
While in use for a church, buses and vans make many trips back and forth to events and sometimes travel long distances. The more frequently a religious organization drives its vehicle, the greater its liability for passenger injury. This coverage compensates third parties injured during an accident and covers damages to church vehicles due to collision, vandalism or theft.
Non-owned vehicles insurance covers accidents involving a vehicle your client uses for business but does not own, such as an employee’s personal car. If an employee’s driver’s insurance is not enough to cover medical bills resulting from an accident, they may sue the church to get adequate coverage. Some non-owned vehicle coverage plans apply to rented vehicles as well, so your client is protected in many situations.
4. Workers’ Compensation
Workers’ compensation insurance provides benefits to your clients’ employees who become ill during — or due to — performance of their duties. Workers’ compensation covers the costs of an ambulance ride, physical therapy and partial missed wages because of an injury. It also contributes to legal costs if an employee sues over their illness.
Frequently Asked Questions About Religious Organization Insurance
When dealing with church insurance questions from your clients, you have many factors to consider. Every organization has different needs, so discussing those questions with your client will yield the most appropriate answers for their specific scenario.
Here are some of the most common religious organization insurance FAQs:
1. How Much Insurance Is Enough for Religious Organizations?
Several elements impact how you determine your clients’ coverage needs, including the net value of their assets and the nature and frequency of their activities. A church without vehicles does not need commercial auto insurance, while a church that frequently transports visiting children on a bus may consider such coverage essential.
Essential coverage usually includes property and general liability insurance as well.
2. What Does a Church Insurance Policy Cover?
Coverage depends on the kind of insurance package your client purchases. To insure common assets and liabilities, policies usually cover the church sanctuary, heating and air conditioning, plumbing, electricity and kitchens. Coverage also includes costly property like artwork, alters, artifacts, pipe organs, library property and audio and visual equipment. If a church also owns a school or daycare center or has a satellite community center nearby, they can protect these properties, too.
Your client may also want coverage for special events that they host to increase community engagement. Events such as food banks, fairs, camps and fundraisers can pose unique risks. Your client could benefit from coverage for these activities.
3. Do Churches Need Insurance for Volunteers?
Many religious organizations try to lower costs by having volunteers perform building cleaning and maintenance. However, a church can be held liable for a volunteer’s injury just like for an employee’s.
The difference is that states have unique laws regarding which workers qualify for workers’ compensation, and in most states, volunteers cannot receive these benefits. If a volunteer or family member sues your client for an injury they sustained while working, the organization may have to cover the entire cost. Because of this, liability insurance premiums may reflect how frequently volunteers are on church grounds doing maintenance or other duties.
4. Do Churches Have Higher Premiums Than Other Building Types?
Churches sometimes have higher premiums than other kinds of buildings. Religious buildings are havens for worshipers and community members alike and carry great sentimental value. If a church building sustains damages from a natural disaster, the sentimental value it holds can motivate members to invest more in its repair. Also, church buildings are often older or more elaborate than commercial buildings, requiring more frequent or expensive maintenance.
Insurance providers often take the sentimental value of a religious building into account when determining an adequate policy. You want to be sure that if renovations and repairs are required, your client can restore the building to its original state as much as possible.
5. How Can a Religious Organization Mitigate Its Risks?
Your clients can mitigate their risks by choosing an insurance policy that covers their common and unique liabilities. They can also decrease their chances of a lawsuit in other ways. Some tips for religious organization risk management include:
- Routine maintenance of grounds, like salting sidewalks during winter.
- Defensive driver training for those driving church-owned vehicles.
- Abuse prevention training and safety policies.
- Armed intruder strategies and video surveillance.
- Limited employee access to funds.
It can also be helpful for your clients to conduct an annual review of insurance clauses to determine if their coverage is still adequate.
What’s the Cost of Insurance for Churches?
Choosing the right insurance coverage for your client can have considerable benefits for their financial health. There is always the risk of a claim or lawsuit, and many factors only increase that risk. However, with adequate religious organization insurance coverage, your clients can have complete peace of mind.
Most religious organizations must consider their budget when they look for an insurance plan. The cost of coverage for a church depends on its unique features. Common factors that influence price include:
- Size of the building that’s covered.
- Value of equipment, vehicles and other property.
- Number of employees.
- Frequency of volunteer involvement.
- Number of members.
- Insurance claims history.
- Services and activities offered.
- Location of the building.
In determining a policy for your client, these factors are unique and may change over time. For example, an older church building may warrant higher property insurance costs because of an increased need for maintenance. A modern building, however, might incur expenses because of elaborate design features or commissioned artworks that are difficult to replace.
Other risks that may increase the cost of a policy include church-owned schools or daycare centers, frequent activities held on church grounds and church-sponsored international travel for mission trips.
Contact Prime Insurance Company for Religious Organization Insurance
It is essential to find an insurance package that can meet all of your clients’ needs adequately. If a natural disaster damages their building or other property, property insurance can help cover the cost of repairs. In many situations, your clients may also be vulnerable to the risk of a claim or lawsuit. These situations can arise from employees, volunteers or visitors who blame the church for their injury. In legal battles over apparent or alleged harm, adequate insurance can keep churches operating.
Prime Insurance Company provides customizable insurance policies designed with the producer and insured in mind, so churches and religious organizations can rest assured that they will have coverage when they need it most. With an “A” (Excellent) rating by AM Best*, Prime offers a suite of coverage options for your clients’ religious organizations. Contact Prime Insurance Company for a quote today, or ask one of our skilled team members for more information about insurance for religious organizations.
* For the latest ratings, access www.ambest.com.
Authored by Rick J. Lindsey, CEO, President, and Chairman of Prime Insurance Company
Rick J. Lindsey hails from Salt Lake City, Utah. He began working in the mailroom of his father’s Salt Lake City insurance firm, getting his introduction to the business that became his lifelong career. Lindsey quickly rose through the ranks while working in nearly every imaginable insurance industry job. As an entrepreneur, specialty lines underwriter, claims specialist, risk manager, and a licensed surplus lines broker, Rick Lindsey is highly skilled in all levels of leadership and execution. As he progressed on his career path, Rick discovered an urgent need for insurers willing to write policies for high-risk individuals and businesses. He was frequently frustrated that he could not provide the liability protection these entities desperately needed to safeguard their assets. He also formed the belief that insurance companies acted too quickly to settle frivolous claims. Lindsey decided to try a different approach. He started an insurance company and became the newly formed entity’s CEO. This opportunity has enabled Rick to fill a void in the market and provide a valuable service to businesses, individuals, and insurance agents who write high-risk business. Prime Insurance also specializes in helping individuals and businesses who live a lifestyle or participate in activities that make them difficult for traditional carriers to insure. If you’ve been denied, non-renewed, or canceled coverage, don’t give up quite yet. Chances are Prime Insurance can help.