Operating a church, mosque, synagogue, temple, or other religious organization comes with many risks and liabilities that could affect your organization, from a worshipper sustaining an injury on your property to a fire that damages your building. It’s important to consider purchasing business insurance coverage to financially protect your organization from these hazards.
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What insurance do I need for my religious organization?
There are many types of insurance coverage to consider, but these policies are particularly relevant to religious organizations:
General Liability Insurance
General liability insurance protects your organization from third-party claims of property damage and bodily injury—a particularly important consideration for religious organizations with a physical space frequented by worshippers, volunteers, and other members of the public. Unfortunate accidents can occur in any setting, and if someone is injured while attending services or their property is damaged, your organization could be sued. General liability insurance can step in to provide financial assistance against these third-party lawsuits.
Examples:
- Bodily injury: An older attendee trips over cabling for a sound system that was left out after an event held at your synagogue. She breaks her hip. Your insurer would cover medical costs and legal fees if the attendee sues.
- Property damage: A volunteer slips on ice in your parking lot and drops his expensive laptop. The laptop is damaged beyond repair. Your insurer would cover the damages.
Commercial Property Insurance
Commercial property insurance protects the value of your religious organization’s building and business property. Since religious organizations typically rely heavily on their physical space and that space may often be unoccupied outside of services and events, this is a key coverage to consider. Fires or break-ins can cause serious financial damage, especially if your property is unoccupied at the time.
Commercial property insurance can provide funds to replace or repair damaged property in the event of a fire, storm, theft, vandalism, or other covered peril.
Commercial property insurance covers the following:
- Buildings belonging to or leased by your organization
- Contents of the building, including equipment, office furniture, and computers
- Property of others while it is under your care, custody, or control
Example:
- Vandals graffiti the walls of your church. Your commercial property insurance would pay for the graffiti to be removed.
Commercial Crime Insurance
Commercial crime insurance provides financial protection from losses caused by theft, fraud, robbery, burglary, forgery, or other crimes. Coverage applies both to crimes committed by outside parties and crimes committed by your own employees. Many religious organizations handle large amounts of money, regularly take cash donations, and could be targeted for theft by dishonest employees, volunteers, congregants, or others.
Example:
- An accountant repeatedly wrote checks to himself over a period of several years, embezzling thousands of dollars. Your insurer would cover the loss.
Commercial Auto Insurance
If your religious organization owns or leases vehicles or if your employees use their own personal vehicles for work purposes, commercial auto insurance is a key coverage that is legally required in most states. This coverage is especially important for organizations that regularly provide transportation for members via bus or van.
If your employees are involved in a car crash, commercial auto insurance can provide coverage for physical damage to vehicles, third-party bodily injury, and property damage. Commercial auto insurance can also provide coverage for damage to your vehicles caused by covered perils, including theft, falling objects, fire, and more.
Example:
- A member of your church volunteers to drive a group of members to a retreat. He becomes distracted and makes a turn without checking the crosswalk, striking a pedestrian. Your commercial auto insurance would cover the pedestrian’s medical costs and legal costs if the pedestrian sues.
Professional Liability Insurance
As a religious organization, your religious leaders may take on a counseling role for members. If a member is negatively affected by the counseling provided by your organization, they could sue with allegations of negligence. Even if the religious leader acted appropriately, a congregant could perceive wrongdoing. Professional liability insurance will cover legal costs and settlements that arise if your organization is accused of malpractice in counseling.
Example:
- A leader at your organization provides counseling to someone experiencing serious psychological issues. The leader fails to refer the congregant to a medical professional and she later harms herself. Your insurer would cover any resulting lawsuit or settlement if your organization is sued for counseling malpractice.
In addition, it’s important to note that if your religious organization owns a cemetery, you may need specific professional liability insurance to cover operations associated with the cemetery.
Abuse and Molestation Liability Insurance
Although your organization may work as hard as possible to keep all vulnerable members safe, there’s always a possibility that an incident of abuse will arise. These claims are common and can affect any organization. In addition to dealing with all incidents seriously and taking steps to prevent them from arising, it’s a good idea to consider insurance that will provide funds to handle legal cases if an incident does occur.
Abuse and molestation liability coverage is often offered as an endorsement to a general liability policy, or it can also be offered on a standalone basis. This type of insurance typically covers the costs of defending against claims of actual or threatened abuse, molestation, and sexual harassment.
Example:
- A pastor at your organization is found to have abused several children over a period of multiple years. It’s discovered that he was fired from a previous position for similar offenses. The families of the children sue your organization for being negligent in hiring this person. Your insurer would cover the lawsuit and resulting settlements.
Directors and Officers Liability Insurance
For many religious organizations, directors and officers may be put at personal financial risk if they are held liable in a lawsuit against your organization. Because these leaders are making major decisions for the organization, it makes sense to offer some protection so that they can make these decisions without fear of liability claims. Directors and officers (D&O) liability insurance can provide protection for the personal liability of directors and officers while they are performing their duties.
Example:
- A long-time volunteer for your church organization recently applied for a full-time role on the board but was passed over for another individual. The volunteer files a lawsuit against your church, claiming racial bias in being denied the full-time role. D&O insurance would protect your board from personal liability in the lawsuit.
Business Income Insurance
As many religious organizations depend on their physical spaces in order to operate, it may be wise to invest in insurance that provides coverage in the case that you must temporarily shut down due to property damage. Business income insurance, also known as business interruption insurance, provides for loss of income and operating expenses if you must shut down due to a covered peril, such as fire, storm damage, or other property damage.
Example:
- A fire damages your organization’s synagogue and offices, forcing you to shut down while repairs are done. Your commercial property policy will cover the damages to your property, while your business income policy will cover lost income during the shutdown.
Additional Coverages
- Workers’ compensation insurance is legally required for companies with employees in most states and covers employees’ medical expenses and lost income if they are injured while working. Coverage requirements for members of the clergy and paid staff may vary by state.
- Employment practices liability insurance protects your organization if you are sued by current, former, or prospective employees who accuse your business of wrongful treatment. Common claims include discrimination, harassment, or other employment-related issues.
- Cyber liability insurance protects your organization from financial losses resulting from data breaches, hacking, cyberextortion, viruses, and other cyber events. This is an important coverage to consider if your organization relies on electronic data or stores personally identifiable information.
Pricing and Quotes
Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:
- Business size
- Industry
- Location
- Number of employees
- Claims history
Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a church organization with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.
In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for religious organizations:
| Provider | General Liability | Professional Liability | Business Owner's Policy |
|---|---|---|---|
| Embroker | ?? | ?? | ?? |
| CoverageSmith | ?? | ?? | ?? |
| CoverWallet | ?? | ?? | ?? |
| Hiscox | ?? | ?? | ?? |
| Thimble | ?? | ?? | ?? |
Final Word
When you run a religious organization, it’s a good idea to consider purchasing a range of business insurance that will protect you from common hazards. From accidental injuries to auto collisions or unexpected disasters like a fire, there are many incidents that can have a major impact on your organization’s finances. Business insurance can give you and your congregation peace of mind, knowing that your religious organization will be protected in the event of an unforeseen catastrophe or lawsuit.
