Jump directly to the content

Making a Claim

Failure to promptly notify your church’s insurer can result in loss of coverage.

A church hired a contractor to build a new sanctuary. The church purchased a performance bond from an insurance company that made the insurer a "surety" guaranteeing satisfactory completion of the project.

At the conclusion of the project the church sent the insurer a letter informing it that "there are several matters which are still incomplete and several other problems relating to this construction project" and that it was the insurer's legal obligation to pay monetary damages for the subpar performance or take steps to complete the contract. The insurer informed the church that there was no coverage under the policy since the church had failed to comply with all the terms and conditions of the policy. The church sued the insurer for breach of contract, and the insurer asked the court to dismiss the lawsuit.

The trial court concluded that the language of the performance bond "unambiguously ...

Log In For Full Access

Interested in becoming a member? Learn more.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Related Topics:
Posted:
  • September 1, 2011

Related ResourcesVisit Store

Best Practices for Technology Usage
Best Practices for Technology Usage
Establish policies and best practices to govern the use of technology for church staff.
Record Keeping
Record Keeping
Learn best practices for protecting confidential documents.
Understanding Pastoral Liability
Understanding Pastoral Liability
Know the situations in which a pastor is personally liable for wrongdoing.
Understanding Church Insurance
Understanding Church Insurance
Understand your church's insurance needs to be assured you have adequate coverage.