Summer Church or Ministry Risk

The weather is heating up (relatively speaking) and summer is right around the corner. With that comes the usual break for kids from school and many other changes in our daily schedules. Not only are our children out of school and need to be accounted for every hour BUT that also means there are other potential insurance risks that now must be dealt with. Take a little time and evaluate the following:

  • Buildings and grounds- when the kids leave that does not mean that no one is responsible any longer. Vacant buildings are a target for vandalism or disrepair. Have your night lights checked and working along with your deferred maintenance schedule of repairs.
  • Kids are out of school, on bikes and pathways. Make sure your company drivers and employees are especially aware when driving or delivering near any playgrounds or schools.
  • Churches and church camps can be especially busy during this timeframe. Have you reviewed your insurance policy limits and liabilities to insure that you are covered for all extracurricular programs.
  • Missions teams are headed on trips and in some cases overseas. Make sure all staff are covered under your auto policies and/or foreign travelers have updated their immunizations and travel coverage.
  • Summer plant and tree growth- things just look different in summer. Is that tree limb finally hanging out too far over your office roof now and worthy of cutting?

Summer is a great time of outdoor activity, travel and family time. Make sure that you take the right steps this summer to insure that your church or ministry is protected and protecting the flock they serve from potential harm!

Flood Insurance

Flood Insurance

We made it through another winter, and most of us are thankful that we did not have a homeowner’s insurance claim. But with the end of winter comes the real possibility of spring flooding. If you live in a flood zone, we recommend flood insurance.  Did you know that even if you don’t live in a flood zone you may need flood insurance?  According to Flood Smart, 20% of flood claims come from low risk areas. A simple six inch flood in a 2,000 square foot home could cause as much as $40,000 worth of damage. There is help through the National Flood Insurance Program (NFIP).

A Guide To Flood Insurance

In 2014, Congress passed the Flood Insurance Reform Act of 2012. The law is intended to make the NFIP “more sustainable and financially sound over the long term.” You need flood insurance if:

  • You building is in a flood zone.
  • Your area has experienced repeated flooding.
  • You live by, or close to, rivers or other waterways.

What Might Be Considered A Flood

  • Snow melt in the spring causes flooding.
  • Flash flooding of rivers or waterways.
  • Dam collapse as a result of rain.
  • Heavy rain from storms cause storm drains to overflow and flood your community.

What Flood Insurance Does Not Cover

As with all insurance, there are certain things flood insurance does not cover. These include broken pipes, water damaged from sewer back-up, broken toilets and landscaping run off.

How To Obtain Flood Insurance?

Call our office and we can provide you with a free quote.

 

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Good Reasons To Consider Workers’ Compensation

If your Church has employees, you may be required to buy workers’ compensation insurance. Some states do allow people to opt out of the system if they can prove financial responsibility, but that is only in two or three states in the entire country. If you have employees, you are most likely required to carry workers’ compensation.

One question we often get asked is, what is an employee? An employee can be a full-time or part-time person, working on behalf of the company. Temporary and seasonal staff can also be defined as employees. Many people seem to think that just because someone isn’t a full-time employee, they don’t need to have workers’ compensation coverage. Not true. In all these cases you are required to have workers’ compensation insurance.

The way you pay your employee does not impact whether or not they are considered an employee. You can 1099 somebody and have him, or she withholds his or her own taxes, and you are still required to carry workers’ compensation coverage on that person. Don’t confuse tax laws and workers’ compensation laws. These laws and statutes are entirely unrelated.

Here are a few additional tests to determine the employer/employee relationship:

  • Do you control the workplace?
  • If the person takes direction from ownership or management, they are employees.
  • Do you supervise them?
  • Is their time controlled (lunch, breaks, etc.)?

What about independent contractors?

An independent contractor is someone who owns their own business, so they control their own working hours. They manage how they get the job done. They are the people to which you give a project, they return a completed project, and they are usually completely unsupervised by you. So, if you have someone who fits into this definition, you probably don’t need to carry workers’ compensation coverage on that person.  However, it is always a good idea to call is to help you review each situation.

Christian Ministries Insurance is committed to providing sound advice and insurance products to churches, universities, Bible colleges, private schools, camps, mission organizations and other 501c3 and related ministries.

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Posted in Church Insurance Church Risk Church Safety Workers compensation by Scott Stuart. Comments Off on Good Reasons To Consider Workers’ Compensation

Your Church At Risk

Here are nine areas to consider when developing a risk management plan for your church. CMI can help you identify and manage your risks through insurance and safety services.

  • Accident Prevention: Are your sidewalks well lighted, dry, and covered with non-slip material? Are walkways and doors kept free of obstructions? Are parking lots safe? Is playground equipment maintained?
  • Childcare: Do you use a paging or other system to ensure children return only to authorized parents? Do you do a background check on all of your workers and volunteers?
  • Fire Protection: Does your church have a fire alarm system and fire extinguishers readily available? Are your fire sprinklers maintained?
  • Transportation Dangers: Does your church own vehicles that are well maintained? Do you use volunteer drivers? Do they have adequate insurance? Are they trained to drive large vans or buses?
  • Counseling: Does your church (or the individual counselors) carry professional liability insurance? Do you have a policy that covers counseling activities?
  • Finances/Payroll: Are dual signatures required for all checks above small amounts? Are all church credit cards properly maintained and regularly checked? Are at least two people present when offerings are counted? Does your church file the appropriate tax forms for all employees, including W-2s and 1099s?
  • Volunteer Selection and Training: Does your church thoroughly screen volunteers who will be driving church vehicles or working with children? Do you supervise volunteers and train them in their responsibilities?
  • Security: Does your church have an electronic security system in place? Do you have a strictly enforced key monitoring system? Do you have adequate lighting around your doors, parking lots, and at the rear of your buildings?
  • Church Employees: Do you have up-to-date hiring policies? Do you provide ongoing training? Do you have a sexual harassment policy?
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Is Your Church Hiring This Summer?

Many churches today offer college students the opportunity to hold a summer intern position. These can be rewarding for the college student as well as provide some help to the ministry. Offering paid or non-paid internships can create risk for your ministry.  We wanted to highlight some of the business risks associated with having interns.  Before you bring that person on board, make sure your ministry well prepared.

You should have a written plan. It should include a job description, hours, and line of authority.

Check to see if there are any state regulations that might be impacted.

If you offer a paid internship, you will need to treat the intern like any other employee.  We suggest having a formal agreement indemnifying the terms of the agreement, including the time period of the internship.

If the internship is a paid position, don’t forget about workers’ compensation.

Make sure you comply with Healthcare Reform relating to employee benefits.

Make sure the intern understands they are not entitled to “regular” company benefits, i.e.  retirement, insurance, vacation, etc.

The internship must provide similar training that would be given in an educational environment.

There must be a “true” benefit for the intern.

The internship cannot be for the sole benefit of the company.

The intern must not replace regular employees,and should work under the close supervision of existing staff.

Unpaid internships for for-profit companies are subject to the U.S. Department of Labor’s Fair Labor Standards Act. There are provisions if you offer educational credit.  Here is a link to the U.S. Department of Labor.

We recommend you check with the department of labor to make sure your program meets all of the requirements.  There have been many businesses who have been sued as a result of improper internship programs.

Christian Ministries Insurance is committed to providing sound advice and insurance products to churches, universities, Bible colleges, private schools, camps, mission organizations and other 501c3 and related ministries.

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Planning a Summer Construction Project?

Is your church starting a construction project this spring? Make sure you have the insurance protection you need. A traditional liability policy provides coverage for people injured on construction sites, but there are risks associated with construction projects that require special insurance. CMI can help you review all insurance and contract documents, callus today.

What you need to know

  • Standard church insurance policies don’t cover new construction.
  • Before a project begins, either you or the contractor must purchase builder’s risk coverage to insure the new building or addition during the construction phase.
  • Clarify in writing who’s responsible for insuring the building while it’s being constructed.
  • After the project is completed or occupancy begins, you’ll want to cancel the builder’s risk coverage and endorse the building onto your policy.
  • Get a certificate of insurance if you are requiring the contractor to carry insurance.

Some common claim examples include:

  • Rain causes exposed wood floors to warp and crack.
  • Wind damage to walls that are not secure.
  • Workers drop windows while installing.
  • Thieves target valuable construction materials, like copper pipes.
  • Church member overloads equipment in truck.
  • Fires do far more damage to an unfinished building than one with fire prevention systems in place.

Before a project begins, either you or the contractor must purchase builder’s risk coverage to insure the new building or addition during the construction phase. Brotherhood Mutual offers a Builder’s Risk endorsement which covers unfinished buildings and the construction materials on construction sites.

Contact CMI today to add this coverage to your policy. Not a Brotherhood Mutual customer yet? Contact us and we’ll help you get connected.

 

 

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Are Board Members Personally Liable for Board Decisions?

Church board members have been placed in a position of trust, and they have a legal responsibility to place the church’s interests ahead of their own. This duty is known as their fiduciary responsibility. If board members use their position in the church for personal gain, they can be sued as individuals, thereby placing their home and personal assets at risk. But the same laws that protect corporate board members in the secular world can also help protect ministry board members who are acting in good faith. CMI can provide your church with insurance protection.

The protection offered to board members of incorporated organizations can apply to liability arising out of injuries, contractual obligations, and other forms of liability created by statute. Consider these as part of your bylaws.

  • Prohibit board members from obtaining any personal gain at the church’s expense
  • Bar the church from doing business with companies that will benefit board members or members of their immediate family.
  • Limit terms of board member
  • Provide training for board members
  • Board members should not have sole responsibility for financial review and authority.

Members of the church governing board are responsible for guiding the church and helping the ministry fulfill its mission. Board members are held to a higher standard of accountability than others in the congregation. By placing the interests of the church above their own, they will not only better serve the church, but can also protect themselves from legal liability, fines and other out-of-pocket loss.

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Praying Is Important…But Get Insurance Too

A Ministry Insurance Update

One of the best things a business owner can do to protect his or her ministry, is to have a business insurance program that covers your business in the best way possible.  Your business insurance program should include Employment Practice Liability, and Directors and Officers Liability insurance.  These coverage’s can often be bundled together through a management liability policy.

Employment Practices Liability (EPLI)

EPLI insurance provides coverage for claims involving employment harassment and discrimination in the employee/employer relationship.  Examples of these kinds of claims are wrongful dismissal/termination, sexual/racial/disability harassment, sexual/racial/disability/religious discrimination, employment-related libel, slander, defamation and invasion of privacy, wrongful failure to employ or promote, and retaliation.

Directors and Officers Liability

Directors and Officers Liability insurance protects your business, owners, executives, and managers, if individuals, competitors, or third parties make a claim for damages.  If your business causes financial loss to a third party, your directors can be sued.  Directors and Officers insurance is an effective solution for the risks facing organizations.  Directors and Officers Liability Insurance will cover administrative, civil, and regulatory proceedings based on actual or alleged acts, errors, omissions, misstatements, neglect, or breach of duty committed by, or allegedly committed by, a director or officer while acting within the scope of their duties.

Christian Ministries Insurance was created specifically to serve Christian churches, schools and other related ministries. Our mission is simple; provide comprehensive insurance products at competitive prices while building a solid relationship with our clients. We do this through our day to day service, scheduled meetings, quality risk management advice, training and prayer for you and your staff. We are a faith based business, dedicated to help your ministry fulfill God’s vision. All CMI staff are actively involved in their local church. We have more than 50 years experience in providing services to churches and related ministries. Our team has helped clients overcome complex insurance and risk management challenges that include: casualty, property, executive liability, human capital, crisis management and claims consulting.

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Cyber Liability Trends In Ministry

Cyber Liability continues to be a major issue for many ministries. Is Cyber Liability part of your Business Insurance Program? In today’s data-driven social media world, businesses of all sizes have had a cyber-attack or data breach. Statistics show 40% of all cyber incidents affect businesses with fewer than 100 employees. With the recent Target breach, many individuals and businesses are considering cyber or identity theft insurance.

Here are a few examples:

  • A University of Texas student hacked school network and stole 4,719 student and faculty social security numbers.
  • A hacker successfully obtains sensitive personal information from the insured’s computer system. As a result, a number of donors bring a claim against the insured for allowing access to their personal information. Total cost to business was over $75,000.
  • The insured’s Chief Customer Service Officer has his laptop stolen. The laptop contains over 100,000 donor records, including their personal contact information. Notification cost ran over $200,000.
  • An insured receives an email that appeared to be from its bank but was not. The insured’s employee opened the email, which activated a computer virus called a Trojan horse that reads key strokes from their computer. The perpetrator used this means to obtain banking and password information and initiate a fraudulent electronic wire transfer from the insured’s bank account Total loss to business was $55,000.

Some Items to Consider

  • With more companies beginning to store information on the “cloud” there will be more universal breaches causing greater losses.
  • Cyber Liability insurance is a real option providing value added coverage and services.
  • Industries most exposed are; healthcare, medical, retail, financial institutions, technology and hospitality,
  • Cyber recovery costs are rising, even with new technology.
  • Individual states will be beefing up mandatory reporting laws and imposing fines for lack of reporting.
  • New technologies will allow cyber-attacks to come through smart phones and tablets.
  • Small businesses may be the most prone, as they have the least protection.
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5 Insurance Myths

I get questions from churches all the time about their insurance options—especially when there are misunderstandings and myths about how insurance companies work. With accurate information, you can make decisions with more clarity and confidence.

My insurance company, Brotherhood Mutual can help separate fact from fiction with these 5 easy explanations of standard insurance questions;

Myth #1: We don’t need liability insurance. No one would sue a church.

Churches may have enjoyed some immunity from lawsuits in the past, but that’s not the reality anymore. Just like any other public gathering place, a church could get sued if someone were to get injured by slipping on an icy sidewalk or falling down stairs. Churches have also been sued for the sexual misconduct of former employees and volunteers.

If a church wants to protect itself against the expense of a devastating legal judgment, investing in a comprehensive liability insurance policy is a wise move.

Myth #2: Our benefits should roughly equal the premiums we’ve paid.

If you pay premiums for years without making a claim, you may feel that you’re not really “using” your insurance. But remember why you buy insurance. It’s not to pay small claims that you could afford within your annual operating budget.

It’s to help your ministry survive a devastating event, such as a fire or tornado that destroys ministry buildings. In such a scenario, your insurance would help you rebuild, plus cover the operating expenses required to keep your ministry going at another location.

Your benefits will far exceed any premiums you have paid, and you’ll be grateful you had coverage. If you wish to reduce your premiums, consider opting for a higher property deductible, such as $1,000 instead of $500. This would reduce your insurance premium and make you less likely to file claims for issues that cost less than $1,000 to repair.

Myth #3: Our insurance policy will cover everything that could possibly happen.

Even the best insurance policy can’t promise total protection. While your standard church insurance policy will repair or replace your building if it’s struck by lightning, fire, high winds, or even a terrorist’s bomb, it won’t pay for earthquake- or flood-related damage. You’ll need supplemental policies for those risks. Some events aren’t even covered by supplemental insurance.

The only way to know exactly what’s covered and what’s not is to read your policy. If that seems daunting, consult an insurance agent who is knowledgeable about ministry needs and can explain insurance concepts in layman’s terms.

Myth #4: All insurance companies are the same

While many companies offer property and casualty insurance, they can differ drastically in the types of coverage they offer, their knowledge about ministry needs, and their financial ability to pay claims.

An insurer that specializes in ministry insurance will be better at identifying and managing risks unique to churches than a company that primarily insures standard businesses. A company rated “A” or better by the A.M. Best Company will be more financially stable than one with a “B” or “C” rating.

To make sure you get the best company for your ministry, call others insured by the company and ask about their experience.

Myth #5: Less is more

Buying the minimum amount of liability insurance required might seem like a good idea. If you think you’ll never get sued, it makes sense to keep your premiums as low as possible.

But saving a few dollars on premiums could cost you a lot. For example, if you carry no liability insurance on church vehicles—or very little—a simple traffic accident could put your ministry’s assets at risk.

Let’s say that the church van blows a tire and rolls over in a ditch. Several people are severely injured; one is paralyzed. Your church could be found responsible for paying the victims’ medical expenses, lost income, and care for the rest of their lives.

If a court orders a higher judgment against the church than your insurance policy provides, your ministry’s assets could be pursued.