Getting insurance for church

Insurance for churches: an expensive necessity, which I’d bet is sometimes difficult, sometimes avoided in smaller and newer churches. How do you know that you’re getting the right coverage at the right price?

I saw a good article a little while back on Blue Avocado, a newish site about nonprofit management sponsored by nonprofit insurers, which answers some basic questions about the professions but — better yet — ask aloud some questions I would want answered if getting bids for insurance. Indeed, the article’s questions would easily morph into a worksheet, which wouldn’t be a bad idea either.

What should boards know about insurance brokers?

4 Replies to “Getting insurance for church”

  1. Yes, as someone who is being sued as part of a non-profit board, for the sake of everyone involved, even tiny non-profits need insurance no matter how time consuming and time intensive it is to figure out what you need. Because people sue.

  2. This is a bigger issue than most congregations imagine. In some states, if a church is underinsured then the insurance company can lower the amount paid out in the case of a filing. When I served a New England church I encouraged the board to review the congregation’s insurance policy. We discovered that the church building was valued at one million dollars. Because the church’s insurance policy covered only four hundred thousand dollars of the value of the property, the insurance company would only have to pay out one-fifth of the amount actually paid for. In other words, because the church was not paying to insure a building for one million, the insurance company would pay only eighty thousand dollars if the church burned down. This review has been necessary in every congregation that I have served.

    More surprising have been the insurance policies that did not cover malpractice or misconduct for staff and/or boards. This is typical of congregations that decided to pursue policies with local insurance agents rather than the national non-profit/church insurers. The congregations always seem to think that they are being clever by saving money only to discover that they having been paying for years for what amounts to zero coverage. Clever by half.

  3. Hmmm. Just a radical thought, but since we don’t have insurance here; doesn’t fit with expenses going toward mission, I wonder how church becoming an unorganized group of people who meet, plan, worship, work in the world, etc. but not as a non-profit might be able to avoid insurance. One of the benefits of the organic church movement. But then we are moving, have moved, here in Turley toward a non-profit for the community center work and so I suppose it might be something worth checking in for especially on that suing and Board membership thing; not so concerned about the building, which is rented, and all the stuff in the building–library, computers, coffeehouse meeting, furniture, etc.; it would be hard to lose, but it was all donated in the first place. I need to check in on a little coverage, I guess; also need to read up more on the anti-insurance stance from a moral perspective; it’s just something that has seemed right to me, relying on the community; I knew a few places do this, and one, The Simple Way, in Philadelphia had a big devastating fire a year ago; I need to check in to how that worked and how it has reinforced or changed their insurance stance. If anyone knows drop me a line or comment here.

  4. @Ron. Few comments have made me as nervous as that one. If for nothing else, there’s Directors and Officers insurance, as a wall against malpractice and fraud. And what about liability insurance if someone gets hurt during a service? And, if your church is unincorporated, what’s to keep every officer — every member? — from getting sued.

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