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United Methodist Church Minimum Insurance Requirements

 

During the 2016 General Conference in Portland, OR, Petition 60158, relating to adequate insurance coverage, was adopted. This Petition amends ¶ 2533.2 in The Book of Discipline (2012) and alters the responsibilities of a local church’s board of trustees as it relates to their report to the charge conference. The current Book of Discipline does not provide for any standards to be made available to assist local church trustees in their annual review of insurance coverages. The paragraph now states:

The board of trustees shall annually compare the existence and adequacy of the church’s insurance coverages to an insurance schedule annually published by the General Council on Finance and Administration. The purpose of this review is to ensure that the church, its properties, and its personnel are properly protected against risks. The board shall include in its report to the charge conference (¶ 2550.7) the results of its review and recommendations needed to timely bring the church into compliance with the published schedule.

Typical “a la carte” programs designed for businesses allow churches to pick and choose their coverage, which often leads to gaps in coverage. Churches need a package that covers all of the lines of coverage important to a ministry – i.e., sexual misconduct, employment practices, directors’, officers’ & trustees, employee benefits liability, and coverage for volunteers. This allows for focus on more important aspects of ministry.

Therefore, in representing the denomination’s trust interest, the following minimum insurance requirements are adopted for local churches: 

COMMERCIAL PROPERTY & LIABILITY PACKAGE POLICY, to include the following minimum limits: 

Property 

 Buildings, Pipe Organs & Contents - Insured to Replacement Value, “Special Risk” Coverage

 All Church buildings should have an updated replacement cost valuation every five (5) years.

 The replacement cost valuation must be updated within 180 days if additional square footage is added. 

Liability 

 Commercial General Liability   Occurrence    $1,000,000 Aggregate    $3,000,000 

 Pastoral Counseling Liability    Occurrence    $1,000,000 Aggregate    $3,000,000 

 Hired and Non Owned Auto Liability    Occurrence    $1,000,000 Aggregate    $3,000,000 

 Employee Benefits Liability (EBL)    Occurrence    $1,000,000 Aggregate    $1,000,000 

 Medical Payments    $10,000 

 Sexual Misconduct Liability    Occurrence    $1,000,000    Aggregate    $2,000,000 

 Crime / Employee Dishonesty    Occurrence    $25,000 

 

DIRECTORS’ & OFFICERS / EMPLOYMENT PRACTICES LIABILITY, to include the following minimum limits: 

 Directors’ & Officers / Employment Practices Liability    $1,000,000 (including Sexual Harassment) 

 

UMBRELLA / EXCESS LIABILITY, An Umbrella / Excess Liability policy is suggested for all churches and required for those with a membership of five-hundred (500) or more. 

If applicable, this excess policy must extend over Commercial General Liability, Pastoral Counseling, Employee Benefits Liability, Owned Auto, Hired & Non-Owned Auto and Workers Compensation. A higher per occurrence limit may be appropriate based on specific risk characteristics such as church size and/or scope of operations and ministries. 

 

WORKERS’ COMPENSATION / EMPLOYERS LIABILITY INSURANCE, as required by state law: 

 Bodily Injury by Accident    Each Accident $1,000,000 

 Bodily Injury by Disease    Policy Limit $1,000,000 

 Bodily Injury by Disease    Each Employee $1,000,000 

 

COMMERCIAL AUTOMOBILE LIABILITY, applicable only if the church owns an automobile; to include the following minimum limits: 

 Limit of Liability $1,000,000 

 

This change provides guidance and empowerment to local church boards of trustees in ensuring that the assets of the denomination are protected by adequate insurance coverages. Click here to access the current minimum insurance requirements from GCFA. These dedicated (non-shared) limits provide a starting point for churches as they are entrusted to be good stewards in protecting God’s assets.