When it comes to preparing for the unexpected, one step churches often take is securing insurance coverage—a critical task to protect against risks. But the task is also daunting, especially given the scope of insurance needs and providers.
“When you say the word ‘insurance,’ it’s a huge subject,” says Phill Martin, deputy CEO of The Church Network, a professional organization for church administrators. “Not all coverage is equal.”
The good news is that while choosing a church insurance policy may not always be easy, churches don’t have to go through the selection process alone. That’s where an experienced, qualified insurance broker can come in to help the church find a provider that offers insurance coverage best suited to the church’s needs. Having a broker can make the process of seeking out and choosing the right insurance coverage a smoother process.
“Consider an insurance broker as a consultant, your advisor,” says Peter Persuitti, managing director of religious practice for insurance and consulting firm Arthur J. Gallagher & Co. “I would suggest that it’s a trusted advisor at the end of the day. I really want to emphasize so much the ‘trusted advisor’ part of it, and with that comes expertise. One of the things that is so critical about a broker is that the broker represents the church, not the carriers.”
Part of what a broker can provide to the church is customer service, in terms of dealing with insurance providers and addressing claims. In order to determine what types of services a broker would offer, churches can pose questions to the broker upfront to find out how they would help.
Rodney Flanders, assistant vice president of broker distribution for the Church Mutual Insurance Company, says that he would request the broker provide information that clarifies their services.
What churches should know about insurance coverage options
When selecting a broker, churches need to know which types of coverage their church requires and which types of coverage they should expect the broker to secure for them.
Charlie Cutler, managing partner of ChurchWest Insurance Services, points out one of the things that churches should be aware of. “There’s claims-made coverage [that] is temporary coverage, and occurrence coverage [that] is permanent,” Cutler says. “If it’s occurrence, you have permanent coverage.”
The takeaway for churches, according to Cutler, is this: “[M]ake sure [you] have permanent coverage.”
The types of events and situations for which churches need coverage vary, Cutler says, so there are a number of liability coverage options that churches can talk to a broker about, including coverage for church-sponsored activities, employment practices, and for allegations of sexual misconduct.
If churches have questions related to insurance coverage and policies, their relationship with the broker should be one that allows them to freely ask questions. According to Flanders, a broker should be able to clearly explain and offer insight into coverages and their differences.
What churches should know about finding a broker
But if churches haven’t worked with an insurance broker previously, they may be uncertain about how they can best determine the qualifications particular brokers have. While there are many insurance options available and many insurance brokers, the reality is that not all insurance brokers may be able to provide churches with the assistance they need. Not all brokers have worked with churches, and that’s important for churches to keep in mind. As they are seeking an insurance broker, churches should ensure that the broker they secure has knowledge of church-specific areas relating to insurance coverage.
If you choose not to work with a broker who is knowledgeable in church-related insurance, you could run into serious issues, according to Church Law & Tax Editorial Advisor Frank Sommerville, an attorney.
“I can’t emphasize enough the church’s need to go with a broker who is experienced in church insurance,” Frank Sommerville says. “That is very critical.”
Why? Because, as Sommerville points out, “churches have different risks.” Churches may be able to easily find an insurance broker—but in order to find a broker with extensive knowledge of the coverage they need and the companies that provide church policies, church leaders will likely need to do more research.
In the search to find a qualified broker, churches can take a number of practical steps to determine whether a potential broker has knowledge in areas specific to their needs.
“I would certainly . . . ask for referrals from other churches,” Flanders says. He also recommends churches contact a broker’s references, if they are provided. Asking other churches for broker referrals can help locate a broker who has relevant experience and specializes in the areas of risk that churches face.
Navigating insurance disputes
Some churches may wonder why they need particular types of coverage if they have never encountered a situation in which an insurance policy has been needed. But churches shouldn’t blindly choose to forgo having insurance coverage just because something hasn’t happened yet. One of the primary reasons churches ended up in court in 2016 was insurance coverage disputes.
Because these disputes can—and do—happen, it’s important that churches know how their broker would help them navigate the business of handling a dispute should one occur.
So how can you know how the broker your church is considering will handle such instances should the need arise?
Persuitti suggests one way churches can determine how a broker might help resolve coverage disputes or claims in the future is to find out how they have handled issues in the past. “Have them tell stories,” Persuitti says. For judging this specific qualification, says, Persuitti, “nothing is better than storytelling, speaking from experience. What you are especially looking for is experience working with the faith-based community. The church is unique, both public-serving and stewards. Its mission, its beliefs and religious values, its impact are so important and as such can influence coverage, claims advocacy, and outcomes.”
When disputes related to insurance claims do arise, churches may need to secure outside aid to assist them as they go through the process. That’s where legal counsel can come alongside churches (and their brokers) to assist them.
“Any time [churches] have a major potential claim, they should have an attorney involved,” Sommerville says.
In some situations, churches may make an insurance claim—and then find out that what they believed would be covered under their insurance policy may not be. Attorneys may be able to work alongside the church’s insurance broker in these cases, determining whether the policy does, in fact, cover the claim. “There are attorneys who specialize in nothing but coverage disputes,” Sommerville notes.
When to review and reassess
After churches have gone through the process of securing a broker and insurance coverage for their church, they may wonder whether it’s necessary to review their coverage and policies annually.
Martin offers some insight into that question: “[T]he important thing, just like [with] our personal insurance coverage, is not [to] go to sleep and [to] be comfortable renewing the policy over and over again.”
That’s where an attorney can assist churches in a review of a current policy. While attorneys do not always work directly with insurance brokers, they can help churches evaluate their existing insurance policies.
“Periodically [churches] should have their policies reviewed by an attorney—especially the larger churches—to figure out where the gaps are,” says Sommerville.
By asking questions, determining which types of coverage the church needs, and proactively seeking to understand offered insurance policies, churches can secure coverage and have a positive relationship with their insurance broker. Through these relationships, churches can be confident they are securing all necessary insurance coverage that the church requires.
Elizabeth Jackson is a freelance writer living in Wheaton, Illinois.