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Churches

church-610100_1920Churches and other houses of worship have a variety of exposures not limited to worship services. Some provide rental hall operations of their facilities for events such as wedding receptions; others sponsor sports and athletic teams, events and programs. There may be extensive youth programs, from occasional Mother’s Day Out programs to full-time preschools, kindergartens, elementary and/or secondary schools. Services may be provided for the disabled, handicapped, destitute or emotionally and mentally impaired, such as a food pantry, Meals on Wheels, job, credit or family counseling. Drug, alcohol and substance abuse services may be provided. Missionary trips may be sponsored within the U.S. or in foreign countries.


Minimum recommended coverage:

Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Valuable Papers and Records, General Liability, Employee Benefits, Directors and Officers Liability, Professional, Umbrella, Hired and Nonownership Auto, Workers Compensation

Other coverages to consider:

Equipment Breakdown, Forgery, Computer Fraud, Fine Arts, Musical Instruments, Commercial Articles Floater, Computers, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage, Stop Gap Liability


Property exposure is due to the building being unoccupied the majority of time, which can encourage vandalism or break-ins. Small fires can quickly get out of control when no one is on premises. There may be cooking facilities for community events. The fire hazards and controls for ranges and ovens need to be checked and evaluated. Many churches have installed sound systems that are attractive to thieves, as are computers and other office equipment, video devices and musical instruments. Some churches, particularly older ones, have ornate woodwork, built-in pipe organs or stained glass windows that may be expensive to replace in the event of a loss. Smoke alarms and burglary alarms are recommended due to the long hours of nonoccupancy.

Gold, silver and other valuable items may be part of the church statuary and ornamentation. A fine arts policy should be considered because of the limitation in most policies regarding theft of such items.

A schedule of regular daily visits to the premises by a member of the clergy or a parishioner can be very helpful in preventing and detecting losses.

Crime exposures are from employee dishonesty and money and securities. The employee dishonesty coverage should be extended to include volunteers. All collections should be counted by two individuals. Deposits and disbursements should be carried out by two separate persons. Annual audits should be conducted. Deposits should be made on a regular basis. No money should be kept on premises.

Inland marine exposure is from audio-video equipment, computers, fine arts, mobile equipment, musical instruments and valuable papers and records (for charters and donations). Items used off premises can be damaged in transit or stolen.

Premises liability exposure is moderate due to the large number of visitors to the premises. Facilities must be neat, orderly and well maintained. All public and life safety standards must be met. Stairways, railings and floor coverings should be in good condition. Exits should be clearly marked and free of obstacles. Adequate lighting should be available in the event of a power outage. Parking areas should be maintained free of snow and ice. All operations should be reviewed to ensure that adequate supervision is in place. There should be an accountability of action to the necessary committees. Background checks should be conducted on all individuals who work with children. Any group trips must provide enough leadership to adequately supervise participants.

Professional liability and counseling exposures can be a concern. All individuals should counsel only within their area of expertise and licensure.

Automobile exposure is a major concern and has a high potential for loss or injury if the church provides any transportation of members, students, faculty, clergy or visitors. Churches often operate on a shoestring budget and may purchase older buses or vans for transporting groups. It is critical that these vehicles be maintained on a regular basis with all service documented. Drivers must be trained in the proper handling of these larger vehicles. MVRs must be ordered regularly on all drivers. Hired nonownership is also an issue as churches depend on volunteers to provide small group transportation. Any drivers who are transporting others in their own vehicles on church-related activities must have adequate insurance.

Workers compensation exposure varies by state. Members of the clergy are not always covered by the various laws while some of the paid staff may be. An awareness of state WC law is necessary in order to meet the state requirements. However, if the law permits the clergy and other staff to be covered by workers compensation, this is the best option to provide coverage and to help with the continuation of the church’s ministry. Without the coverage, the church may be subject to a lawsuit that could close the church.

Churches and other religious organizations may take on a variety of ministries. These are unique and require separate review. Consider the type of ministry, such as day care, and then review the narrative that would fit that operation.