Minimum insurance requirements for United Methodist churches were developed and implemented to provide a schedule of the recommended coverages and limits that a church should carry to help ensure that it is adequately insured. Some of the important questions surrounding these requirements include:
· Where did these requirements come from?
· Why are they important?
· Are there any actions my church needs to take in relation to these requirements?
It can be helpful to examine these questions and other details surrounding the requirements and church insurance in general.
Origin of Requirements
During the 2016 General Conference in Portland, Oregon, Petition 60158 was adopted. The Petition amended ¶ 2533.2 in The Book of Discipline (2012) and altered the responsibilities of the local churches’ boards of trustees as they relate to the annual review and reporting of each church’s insurance coverage. It 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 (GCFA). 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.
Determination of Requirements
The minimum requirements were developed by GCFA in 2016. These were determined based on the exposures faced by individual churches, industry best practices, the professional assessments by United Methodist Insurance Program (UMIP) and its partners’ experts, and claims trends. The goal of establishing these requirements is to help ensure that churches maintain coverage that offers appropriate protection in the event of a loss. For example, claims can stem from trustee liability, pastoral counseling, or sexual misconduct. By meeting the minimum requirements, a church can potentially avoid some of the financial consequences associated with covered claims.
Minimum requirements can change based on emerging risks, new coverage options, the careful consideration of the advice of experts, the needs of individual churches, and other legal and market factors. In May of 2019, the standards were adjusted to consider the coverage needed by smaller churches for sexual misconduct coverage, employment practices liability, and other coverage needs. Other changes are under consideration and will be thoughtfully and prayerfully considered. They will be presented in turn to the boards of UMIP and GCFA for review, approval, and adoption.
Reach of Minimum Requirements
It is important to remember that the minimum requirements as currently discussed apply specifically to church property and casualty package policies. There may be instances where churches should consider stand-alone coverage (such as employee benefits liability, employment practices liability, and crime). Speak to your insurance agent to learn more about securing appropriate stand-alone coverage for your church.
Steps Churches Should Take
To help ensure that your church is appropriately protected, it is recommended that you provide your insurance agent with a breakdown of the minimum requirements as they secure your coverage. If you are currently unsure if your church meets the minimum requirements, speak to your agent. One additional item to remember when securing your coverage is that while it is important for your coverage to meet the minimum requirements, it is also important that your insurance reflects your church’s unique needs and financial resources. Your agent should focus on identifying coverage that is appropriate but does not go beyond what is necessary from a risk and financial perspective. Click Here to access the minimum insurance requirements.
Questions about Insurance or Risk Management? We are here for you. Email asktheexpert@umins.org and your question might be featured in an upcoming article in the Church Protection Connection.
This content has been prepared by United Methodist Insurance Company (UMI) for informational purposes only. No article or document may accurately contemplate all possible scenarios or church resources. As such, this information is meant to foster discussion by the individual church and its members to develop a plan tailored to its own circumstances. UMI is providing this information with no warranties or guarantees of any kind and it should not be viewed as legal, financial, or other professional advice. All liability is expressly disclaimed. Any claim examples described herein are general in nature, may or may not be based on actual claims, and are for informational purposes only. Any coverage available for a claim is determined from the facts and circumstances of the claim as well as the terms and conditions of any applicable policy, including any exclusions or deductibles. In the event of a conflict with the content herein, the terms and conditions of any issued policy will control. Individual coverage may vary and may not be available in all states.
The commercial insurance coverages for United Methodist Insurance are sold and serviced directly or indirectly by Sovereign Insurance Agency (CA Lic. No. 0B01380) ("Sovereign") and underwritten by various available insurance markets. Sovereign pays United Methodist Insurance a royalty for the use of its intellectual property.