Insurance is without a doubt the most important issue
we can cover, because a church that "thinks" it
is insured but is not insured or is under-insured, is going
to face some serious problems. Particularly, insurance
is valuable because most policies cover for defense costs,
which can range in the thousands of dollars, even for a
frivolous case.
The following questions are very important in determining
your insurance:
1. Who is your carrier? Does this carrier routinely insure
churches, on a broad scale?
2. In case of a fire loss, is your building insured for
full replacement costs? In the alternative, in the event
of a fire loss, is your church insured to value?
3. In case of a fire loss, does your church's policy have
a co-insurance penalty? Most policies state that in the
event of a fire loss, if your building is not insured at
least up to a certain percentage (usually 80-90%) of the
fair market value or actual replacement value of your building,
at the time of the loss, there may be a penalty involved.
This means that you may have less insurance coverage than
you think in the event of catastrophic fire loss.
4. Does your church's policy have non-owned
and hired auto/vehicle coverage for your church? This coverage allows
a person who is on church business or in the furtherance
of church activities, who is driving a vehicle not owned
by the church, to have insurance coverage in the event
of an accident. However, you must have the right clause
in your policy.
5. Does your church's insurance policy have a sexual misconduct
endorsement?
6. If you have employees, have you complied with state
laws regarding workers compensation insurance? This includes
church schools and day cares.
We cannot stress enough how important it is that you understand
what type of liability and other insurance coverage that
you have available to your church. Be sure to ask your
agent what exclusions apply to your policy.
