Key point 10-16.07. A liability insurance policy provides a church with a legal defense to lawsuits claiming that the church is responsible for an injury, and it will pay any adverse settlement or judgment up to the limit specified in the policy. Liability insurance policies exclude a number of claims. For example, some policies exclude injuries based on criminal or intentional acts and claims for punitive damages. A church has an obligation to promptly notify its insurer of any potential claim, and to cooperate with the insurer in its investigation of claims.
Some view liability insurance as a "defense" to church liability since it will provide the church with a legal defense of a civil lawsuit and pay any portion of a settlement or judgment up to the insurance policy limits. Listed below are several aspects of church insurance with which church leaders should be familiar: