Prepare for the Worst

in Church Bonds, Church Financing, Church Insurance, Church Loans

When the unexpected happens…

The practice of risk management and insurance coverage usually isn’t something church leadership thinks about on a regular basis. However, the proper comprehensive insurance coverage can help your church to prepare for the unexpected and to maintain a comfortable environment for your members.

Churches are subject to lawsuits just as any other organization. Getting the proper insurance coverage is an essential and necessary step to protecting your church and its members for many types of losses. While insurance protection does not eliminate a good safety plan, it can be a valuable tool.

What does this have to do with church financing?

Everything.

When financing or refinancing your church loan with church bonds, funds become available for a new church facility or various capital improvements of the existing church building. Because many churches will utilize volunteer help with various construction projects, what happens if something breaks or falls on that person? Your church can now become liable for those damages. This is why having the proper insurance coverage is a necessity for a church or ministry.

Okay you’ve convinced me, now what do I need?

There are two basic types of insurance coverage that you should consider for your church:

1.) Property Coverage – This includes specialized forms of insurance coverage for the church buildings and equipment that provides for certain financial reimbursement to the church for most risks, in the event of destruction from fire, theft, and certain natural disasters. It should be noted that many basic property insurance policies do not cover losses from floods and earthquakes, so if your church is located in a high-risk area of these occurrences, make sure that your church has additional insurance coverage for the possibility of losses from these catastrophic events.

2.) Casualty Coverage – This type of insurance coverage broadly covers the risk of financial losses not directly concerned with life insurance, health insurance or property insurance. In general, casualty insurance covers the legal side of things, whether it is property damage or injury to a church member, worker, or visitor. Having the proper casualty insurance coverage can help prevent financial losses to the church from unforeseen lawsuits and medical bills.

It is important to note that this article, as well as the other articles on this site, are not intended to be a thorough, in-depth analysis of specific insurance, legal, business, accounting, or tax advice, and is not a formal opinion of these issues. There is no substitute for a comprehensive insurance package designed by professionals that have the skill, knowledge, and expertise in the various insurance products and services specifically designed for religious institutions. Proper insurance planning can help a church and its leaders mitigate these risks and to prepare for the unexpected. Having the right insurance coverage can be a valuable tool to allow your ministry to do those things it needs to do without the risk of being burdened with unforeseen expenses in the future.