"It's easier to prepare and prevent, than to repair and repent." - Author unknown
When the unexpected happens, will your church be ready? Most church insurance claims and lawsuits can be prevented with a little planning and preparation. That’s why we’re focusing on risk management in this second installment of our September series on church preparedness.
As a pastor, it's helpful to think of yourself as a risk manager for your church and its people. Mitigating church risk is an ongoing process, and the following steps will help you tackle it effectively:
1. Identify risk.
Develop a habit of looking for potentially high-risk areas within your facilities and ministry activities.
- Physical inspections. Walk through your facilities and property looking for things that may pose a hazard. Slipping, tripping, and falling accidents account for the vast majority of liability insurance claims.
- Checklist and procedure reviews. Establish a variety of checklists and implement them into your procedures. Common checklists include vehicle inspection, kitchen safety, property inspection, and nursery safety.
- Leases and contracts. Do not sign contracts that transfer risk and liability to your organization, as they can often be negotiated or rewritten to more favorable terms. One of the most common scenarios is when a church rents inflatables for an event.
2. Control risk.
It's important to assess the likelihood of an accident and its potential financial impact on your ministry, such as increased premiums, damaged reputation, financial settlements, and legal fees. Consider the following methods to begin controlling risk:
- Prevention. Stop or interrupt the chain of events that could lead to an accident or a loss. By reviewing ministry procedures and developing protective policies, you can often prevent problems.
- Reduction. Steps may be taken before or after a loss has occurred to minimize the damage and reduce its impact. For example, you can minimize your church's potential liability for child abuse by always running criminal background checks and contacting institutional references for all potential workers. In addition, maintain all physical documentation of these items to be able to provide to authorities in the event of an accusation. This protects your church, your workers, and, most importantly, children.
- Separation and duplication. Regular backups should be made of important information, such as tax documents, giving reports, licenses, personnel files, insurance policies, property inventory lists, and other sensitive data. In addition, files should be duplicated and stored off-site in the event your building is damaged or destroyed by fire or other disaster.
- Transfers. You can physically transfer risk by allowing another individual or entity to perform duties. For example, by hiring local law enforcement officers to provide security for your church, liability transfers from your church to them when they respond to an emergency.
3. Implement smart policies.
Having solid risk management policies enables you to protect people, prevent incidents, and prove to a jury your church extended a reasonable level of care if you are sued. Start by creating a policy in each of the following areas:
- Abuse prevention for minors
- Cell phone use
- Social media use
- Emergency response
- Facilities use
4. Obtain proper insurance coverage.
Insurance is not a substitute for quality risk management. However, it enables your church to pay for unexpected events without financially crippling your ministry. Every church needs two types of insurance: liability and property. Liability covers the action that could leave the church liable for damage to others (injuries, property, or reputation) while property covers the things you own.
It is recommended for churches to seek coverage with an insurance company that has A.M. Best's credit rating of A- or better, financial size VI or higher, and an agent that is knowledgeable about insuring churches. In addition, it is a good practice to evaluate your policies on a regular basis as your needs may change from year to year.
The General Council of the Assemblies of God has a customized insurance program for AG churches available through AGFinancial Insurance Solutions in partnership with Church Mutual, the largest church writer in the world. For more information, call 866.621.1787 or email info@agfinancialinsurance.com.
