It has now been two years since COVID-19 changed many aspects of our lives, the ways we conduct business and even to some degree the ways we worship. Some of that has returned to the way it was before the pandemic, others will forever be changed.
Change has seemingly been THE discussion in recent years and while COVID may have dominated that arena, it’s just one of several challenge areas churches are having to address. The purpose of this article is to highlight some of those topics and allow you to evaluate their impact on your insurance program in the coming year.
The following are five major challenge areas trending upward in importance:
No. 1: Sexual Abuse Guidelines and Prevention
We list this number 1 only because sexual abuse in churches consistently ranks as the number one reason churches go to court and until churches address this seriously, it will continue rank highly. We must eliminate the thought that a background check is the primary screening tool on sexual misconduct prevention. Yes, it’s an essential component but if this is all you are doing or it’s most of what you do to screen those who work with minors, you have a flawed screening plan. Did you know that you have less than a 10% chance of ever getting a hit on a criminal background check? If you need assistance in this area, please reach out to us, we have some very helpful resources.
No 2: Armed Volunteer Security
Over the years we’ve seen an ebb and flow in reaction to a shooting event at a church or other public venue, but after those we’ve seen this year, there has been a significant rise in the number of churches formulating some type of “security” team. Don’t think this has gone unnoticed by the insurance carriers. Some have already taken action and likely more will in the coming months in determining how or if coverage will be given to the church that has armed volunteers. This is not a risk most want to underwrite so you need to be aware of how your church’s insurance policy would respond or if it would at all. Regardless of coverage, one thing will likely be consistent – the armed volunteer will not be protected or defended by the church’s insurance if they discharge their weapon, injure an innocent party and are sued civilly so we highly recommend they have their own gun liability policy.
No. 3: Cyber Liability
Maybe the most misunderstood and most doubted of all coverages, unfortunately this risk is not likely to ever go away and will likely escalate in coming years. First and foremost, you need to know that most policies today exclude any type of liability or coverage related to anything internet. Some may provide a minimum amount of coverage, but should you have a cyber related claim, it’s a very high likelihood that coverage will not be sufficient. The claims are not rampant among churches – yet – but those that do occur can be very expensive, some reaching into six figures.
No. 4: Boy Scouts and/or Others Using Your Facilities
We will address this in more detail on our next Blog, but the Boy Scout sex abuse scandal (now exceeding $2.6 Billion) should draw a new awareness to the screening methods you use for those who work with minors. But what we also learned from the Boy Scout litigation, is that your organization which allows Boy Scouts or for that matter, any other organization to use your facilities, the possibility of being held liable for a sexual abuse incident may have more exposure than previously thought. You must (a) know who is using your facility, (b) specifically what programming and activities are provided, and (3) very important, whether effective child protection elements are in place.
No. 5: Market Challenges
Wind & Hail Deductibles: Unless you are one of the very fortunate or your organization is not in one of the major metropolitan areas of Texas, you are likely dealing with percentage wind and/or hail deductibles. While we used to have numerous exceptions, over this past year they have become more of the standard, normally varying between 1% and 2%, with some carriers requiring even higher. Natural catastrophes play a complex role in the underwriting process and maintaining wind/hail deductibles under 2% could prove to be a challenge in coming years.
Market Availability: South Texas and the Dallas Fort Worth area have seen a shrinking in the viable markets available to churches. Some have adopted tighter underwriting guidelines and still more have gone so far as to suspend any new business in these major Counties. Insurance One will continue using our prominence in the non-profit field to seek available options that can best serve this market we’ve dedicated ourselves to.
Building and Construction Costs: Via a combination of inflation and product shortages, there are higher costs for both new construction and renovations. Because it costs more to build or renovate facilities, it will cost more to cover them in the event of an insurance claims. Policies will begin to reflect those changes, which will in turn affect the premiums you pay.
We appreciate you allowing us to navigate these challenges with you. Please always feel free to contact us with any questions – on these items or anything else.
After all, It’s Not About Insurance, It’s About Protecting Your Ministry.
