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Insurance Coverage: An Overview

By James F. Cobble

Sidebars to the article Managing the Changing Dynamics of Legal Risk and Ministry Barriers To Safety And Love: Why Church Leaders Keep Them In Place Insurance Coverage: An Overview A Strategy To Reduce Risk—Establishing A Church Safety Team The Safety Coordinator Online Resources To Reduce Legal Risk What Church Leaders Should Know About Church Vans

For many church leaders, insurance coverage can be confusing and complex. When purchasing or reviewing coverage, it is helpful to break the coverage down into specific areas, and then focus on one area at a time. Review each of the following areas with your church’s insurance agent.

• Property Insurance. The main concern is insuring of buildings and contents (including personal property that is not owned by the church). Property insurance has levels of complexity because of what is included or excluded in the policy. As a result, leaders must be very careful to understand the forms that are used to write the policy (see the more extended list below).
• Liability Insurance. Liability insurance provides coverage for civil claims. Liability coverage is generally divided into general liability, automobile liability, and workers’ compensation and employers liability. Each area is written as a separate policy. Some additional liability coverages are important for churches including directors and officers insurance, counseling or professional liability, sexual misconduct coverage, and corporal punishment and excess medical claims.
• Workers’ Compensation and Employers Liability.As a form of liability coverage, workers’ compensation and employers liability are handled as separate policies. This coverage is vital for churches, yet many churches do not obtain it.
• Automobile Insurance. Attention must be given to a broad range of concerns including liability coverage, medical payments, uninsured or underinsured motorists, collision coverage, comprehensive coverage for physical damage or losses other than from collision, the use of nonowned vehicles, and the use of employee and volunteer drivers.
• Excess or Umbrella Insurance. It is advisable for churches to purchase additional insurance for liability purposes that goes beyond the limits of the basic policies. This is generally done by obtaining excess or umbrella insurance.

The insurance coverage that you have is affected by a number of additional factors. Review the following policy provisions with your agent: deductibles, the valuation of property, inflation guard, coinsurance and agreed value. To obtain the full level of coverage needed, also examine the following additional insurance considerations with your agent:

• blanket insurance
• builders risk insurance
• plate glass insurance
• boiler and machinery insurance
• personal property coverage
• inland marine insurance
• flood insurance
• earthquake insurance
• fidelity bonds
• additional crime insurance
• sewer, drain, and sump backup insurance

—James F. Cobble, Jr., Ph.D., Matthews, North Carolina