How to Reduce EPLI Costs and Claims

Experts agree that your church can save money on its liability insurance (EPLI) policy while lowering claims.

“The best way to prevent these claims is to manage employees well,” said GuideOne’s Brian Gleason. “This policy is intended to be a backstop if everything should go wrong.”

Gleason recommends preventive steps starting before hiring, with a thorough application process that includes background screenings. After hiring, he recommends regular performance appraisals that allow communication about an employee’s performance and include expectations for the future.

“Clear lines of supervision are important,” Gleason said. “It helps to have a defined understanding of expectations of the employee and for the supervisor to communicate them.”

Attorney Thomas Bentz said having employment policies in place and written in a handbook format are essential. So is having someone designated to handle issues that arise. “If you can demonstrate you have these to your underwriter, they’ll be much more willing to give you a better rate,” said Bentz, who specializes in insurance law.

Attorney Nathan Adams’ practices include labor, employment, and benefits law. He said it’s important for churches to consider whether their employment practices are good and whether they’re followed consistently.

“Sometimes we’ll get calls from a client after they’ve released an employee, and you wish they would have contacted a lawyer beforehand,” Adams said. “Had they taken two or three different steps than they actually took, they might have minimized the claim or prevented it altogether. If you’ve consulted with a professional on the front end before taking adverse action, that’s usually better than waiting until afterward.”

Attorney Tiffany Releford has expertise in labor and employment law. She said claim prevention is the best way to keep EPLI premium costs low.

Releford advocates updating employee handbooks. She also suggests updating policies that prevent discrimination and harassment as well as those that address theft, fraud, and embezzlement.

“You have to think of EPLI as any other insurance,” she said. “The day you don’t have it is the day you’re going to have an issue. But you’re best served by making sure you have the correct policies in place, not just to reduce your liability but to provide you with a defense in case there is some sort of occurrence that arises.”

Brotherhood Mutual’s Steve Case agrees.

“Reducing the cost of the insurance and reducing the risk of a claim go hand in hand,” Case said. “One of the best things that ministries can do on the front end is make sure that, through their employee handbook and through their interview and hiring process, that they’re clearly communicating their sincerely held beliefs, their standards of conduct, and their behavioral expectations for their staff. They also must clearly communicate their harassment policy and their discipline policy, and reaffirm that the employment is at-will employment, that you can be terminated for any reason that’s not illegal.”

Understanding state and federal employment laws is critical for churches, said Attorney Frank Sommerville, specifically because churches aren’t the typical employers in the sense that for-profit businesses may be.

“Churches cannot assume just because they’re a church that none of the employment laws apply,” he said. “That’s just not true; all of these employment laws apply in one shape or another.”

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