Insurance for Churches: A Complete Guide
When pastors plant a church, they often have grand visions for its future. They imagine
the good they can do for their community. They think of ways to reach out to young
families and keep them involved.
During all these dreams, however, churches must also remember the practical
considerations. Like any other business or nonprofit, churches have daily necessities
that keep the place running.
One of those necessities is insurance for churches. Church insurance must cover
several contingencies, whether it's protecting the building or the staff.
Don't worry if you're not sure what insurance policies your church needs! In this guide,
we'll explore the types of policies you may need and how much they cost. So, without
further ado, let's get started!
Who Needs Church Insurance?
Before we cover what types of insurance a church needs, it's beneficial to know who
may need this coverage. Church insurance applies to several established religious
organizations. These can include temples, synagogues, mosques, and nonprofit
These organizations require insurance to protect their property, assets, and personal
interactions. However, church insurance also applies to less established circles.
For example, there's currently a growing movement of house churches. While
homeowners’ insurance would typically cover informal prayer circles or Bible studies, a
house church is different. Since it may accept donations or have a pastor who offers
advice to attendees, church insurance is essential.
Likewise, preachers who travel between locations also may need some church
insurance policies. Inland marine insurance can also help them cover any property they
keep in transit.
How Insurance for Churches Works
When religious organizations seek insurance, they typically require multiple policies to
cover all their bases. Each parish or campus varies in its needs, so it'll be up to
individual leaders and committees to assess the church's needs.
In the next few sections, we'll explore the most common insurance policies that
religious organizations need. To start, let's talk about a business owner's policy.
Business Owner's Insurance
Business owner's policies (BOP) essentially bundle several individual policies into a
single coverage plan. Typically, this grouping includes general liability and commercial
property insurance. You may also see business interruption coverage included.
What are the advantages of this policy? When you get BOP, your church receives
essential protection for a lower cost than individual policies would afford. It also
reduces the number of policies that the church committees need to monitor.
One of the essential policies in a BOP bundle is general liability coverage. With this, your
church insurance covers third-party property damage, potential bodily harm, or
advertising harm like defamation.
General liability may also cover the injured person's medical or repair bills. Essentially,
this insurance keeps your organization safe from accusations of harm lodged by other
Next up is commercial property insurance. This policy protects your building from
third-party damages. For example, let's say your church has beautiful stained glass
Late at night, somebody may walk by and decide to throw a rock through your windows.
In cases like these, commercial property insurance would cover the damages.
Professional Liability Insurance
Pastors, priests, rabbis, and other clergy members don't simply lead services and preach
sermons. In many cases, they also act as spiritual counselors. Because of this, they
remain open to many of the same dangers a therapist may face.
Chief among those threats is the fear of negligence claims. If a parishioner decides to
file a suit against you, professional liability insurance can cover you.
How exactly does this work? Professional liability insurance provides you with funds up
to a certain limit. With this money, your provider can pay for legal defense costs and
It can also work with the claimant to reach a financial settlement. However, understand
that it will only offer as much money as the limit provides. Beyond that point, you or your
organization will have to find other funds.
Does your church have or intend to hire workers who remain in the church building?
These could include secretaries, janitors, or pastoral staff. If your church runs a school
or afterschool program, it could also include your teachers and workers.
If you have any of these people on your payroll, worker's compensation insurance
becomes a necessity. This policy helps keep your workers financially safe in the event
they become injured on the job.
What will it cover? Typically, this coverage handles any medical expenses the injured
worker may incur. It also helps keep them financially compensated for the time they
Many churches own a bus or van they use to transport mission teams or retreat groups.
If your church owns vehicles, you'll also need to insure them. Your organization will need
a business auto policy to cover this exposure.
Factors Affecting Insurance Costs
One of the principal factors affecting insurance costs is the size of the congregation.
The average church in America has less than 300 members.
For example, churches with less than 300 members can expect a coverage amount of
$1million-$2 million for general liability coverage. However, other factors affect your
coverage amounts and premium costs.
Some of these factors include:
The size of your board, since more members increases the risk of a lawsuit
Claims history can affect premium costs, with more claims charging higher premiums
Services you provide, like counseling, food pantries, daycare, and mission trips, may also increase premiums
The value of your property can also increase your premium costs
Considering each of these factors can prove stressful for pastors and board members.
If you're unsure what policies to pursue, consult with insurance providers to get the
most accurate information.
Finding Your Insurance Provider
We hope this church insurance guide has helped you! With this information, you can
better understand what insurance policies your house of worship will require.
All that's left is to find a provider that can give you the coverage you need. If you meet in
North Carolina, consider our services!
We are a church insurance company that specializes in the policies your congregation
needs. Contact us today to learn more!