The general liability limits of your policy should be no less than $1,000,000 per occurrence and $3,000,000 annual aggregate in amount. The form on the insurance policy is relatively similar throughout most companies in terms of coverage they provide. However, there are some areas of difference, and you should address them when purchasing your insurance package. These are:
Named Insured
The definition of the Named Insured should be as broad as possible, including employees and volunteers for the school.
Personal Injury
The definition of personal injury should include disparagement of a person or organization.
Property Damage Legal Liability
Provides coverage for damage to those premises that are leased or rented to you. This limit should not be any lower than the total value of all your leased and rented premises.
Hired & Non-Owned Auto
Hired auto protects the church against lawsuits brought against it when someone on business for the church has an accident while using a rented vehicle, i.e. members attending a convention in a rented car. Non-owned auto insurance protects the church against lawsuits brought against it while a person on business for the church, driving a privately owned vehicle, has an accident and the church is sued. For example, it could be as innocent as a member running to the post office to mail a letter for the church and having an accident. The individual’s insurance will protect him but it does not extend to the church. If the church does not have non-owned auto coverage, the church is without protection on this type of loss. While this coverage is listed under the special multi-peril liability form for some companies, it may also be found on a business auto policy for the insured auto. This coverage should be provided in either one of these two places. (Limits should be $1,000,000 per occurrence.)
Ministers Counseling
This is an extremely important coverage to have and may be written in one of two ways; either as an endorsement to your Special Multi-Peril policy or as a separate policy. From a coverage standpoint, it can also be written in one of two ways; position or blanket. Position is a very limited way to write this coverage as it will only cover listed positions such as “only called pastors” or “called pastors and assistant pastors.” The preferred way to carry this coverage is on a blanket format as it will provide coverage for the minister, lay employees, and volunteers while performing activities within the defined ministry of the church. (Limits should be $1,000,000 per occurrence, $3,000,000 aggregate.)
Sexual Misconduct
This coverage provides protection for the church in the event that a lawsuit is brought claiming that a member of the church staff, or a volunteer working for the church, has been involved in some type of sexual misconduct. The limit should be as high as you can possibly obtain, and in most instances it will be limited to $250,000 per occurrence and $500,000 aggregate.
Directors & Officers
This coverage protects the directors and officers of your church from lawsuits brought against them for not performing or improperly performing their duties. Many insurance agents will tell you that you don’t have to worry about this coverage as state statutes protect you from liability. Each state has its own statues and in most cases they are extremely limited in what protection they afford, if any. In addition, you do not have to be liable to be sued, and in most cases you still have to defend yourself in court. (Limits should be $1,000,000 per occurrence, $1,000,000 aggregate).
Specialty Coverages
If you have a daycare facility or a school, there are other areas of insurance you need to consider carrying that are not a typical part of the basic insurance policy. These are corporal punishment and excess medical payments for students.
In addition, schools, instructors, and the school board require a specialized form of Directors and Officers Liability Coverage. This coverage is commonly referred to as Educators Legal Liability coverage and may be purchased with limits of $500,000 or higher. Coverages that should be included are: First Dollar Defense, Discrimination, Failure to Educate, Civil Rights Violations, Unfair Employment Practices, and Wrongful Termination.
As coverage forms vary a great deal, it is essential that they be compared in detail. You should also be sure the coverage form chosen will provide defense for the individual accused as well as the school itself. Never accept an oral statement as to the extent of coverage provided – always require that it be written and signed by your insurance agent.
