Background. Our research reveals that employment disputes are one of the most common sources of church litigation. However, many churches are not insured against this risk, often because of an assumption that the church's comprehensive general liability (CGL) policy covers such claims. But this often is an incorrect assumption since the typical CGL policy excludes "employment practices."
How can church leaders respond to this potentially uninsured risk? The best response is twofold:
- Implement an effective risk management program that addresses the most common types of employer liability.
- Purchase employment practices liability insurance (EPLI). Often, EPLI insurance can be purchased as a special endorsement to a CGL policy.
Tip. A church's choice of insurance coverages should be the result of a careful evaluation. Many churches use an insurance committee, or finance committee, to review options and make recommendations to the church board or congregation. One issue that needs to be addressed in such a process is whether the church's existing insurance policy or policies provide coverage for employment practices. If not, this is a potentially serious gap in coverage that should be addressed.