Current Insurance Coverage, Property & Liability Issues for Large Churches Church Insurance Company of Vermont Michael Marino Vice President, Claims John Webster Assistant Vice President, Claims February 28, 2014
Relevant Issues for Large Churches Review the property, other assets and activities of the diocese or parish Identify and understand the risks that pose potential threats Estimate the potential financial, reputational or other impact of each risk Evaluate alternatives to avoid, reduce or transfer risks Education/training Maintenance, security, protection of property Contracting to prohibit or indemnify for risk Insurance Re-review on regular basis 2
Church Insurance Company of Vermont and Church Insurance Company of New York Types of insurance coverage: Property damage General liability Directors & Officers / Employment Practices Liability Umbrella Fidelity Bond Auto Workers Comp 3
Property Insurance Covers buildings, contents, and other types of property against damage or other losses such as: Fire, wind, water damage Vandalism, theft Lightning All perils unless specifically excluded Limit on coverage: agreed amount (based on appraised value) Key provisions: Diocesan Blanket (except Pinnacle Plus Policy) Replacement Cost Coverage Flood Coverage Special Perils Extended Coverage (Building & Ordinance, Fine Arts) No Coinsurance Penalty 4
Parish Property Areas of Concern Electrical Maintenance related losses Improper or inadequate lighting Security Drainage issues Fire protection Alarm systems 5
Who is Covered? Liability, D&O and EPL policies cover: Rector Vestry Parish and diocesan employees Volunteers As a general rule, anyone performing church/diocesan business or acting on behalf of the church/diocese 6
Liability Insurance Protects the diocese or parish and its agents against civil liability for bodily injury, property damage, or personal injury to others Principal types of coverage and limits under Church Insurance policy: Per Occurrence Aggregate General Liability $1 million $5 million Sexual Misconduct $1 million $2 million Advertising Injury Liability $1 million $1 million Personal Injury Liability Product Liability $1 million $5 million Employee Benefit Liability Defense cost outside the limit Hired and Non Owned Auto $40,000 (property) $1 million ( auto liability) Medical Payments $25,000 N/A Accident $15,000 $60,000 7
Parish Liability Areas of Concern Bodily injury as a result of property hazards Playground equipment Improper or inadequate lighting Maintenance protocols regarding ice and snow Autos Church sponsored events Liquor liability 8
Directors & Officers Liability Insurance (D&O) Protects the diocese/parish and its agents against civil liability for wrongful acts by those performing church/diocesan business or acting on behalf of the church/diocese Limit on coverage: $1 million (per occurrence and aggregate) Key provisions: Claims made policy Defense costs inside the limit No retroactive date means prior acts are covered 9
D&O Liability- Coverage Error Neglect Breach of duty Misleading statements 10
Employment Practices Liability (EPL) Provides coverage for employment-related practices, policies acts or omissions, including wrongful termination, discrimination, harassment, violation of civil rights Limit on coverage: $1 million (per occurrence and aggregate) Key provisions: Claims made policy Defense costs inside the limit No retroactive date 11
EPL Liability- Coverage Hostile workplace Wrongful termination Sexual harassment Breach of employment Negligent evaluation Defamation 12
Umbrella Liability Protects the diocese/parish and its people against catastrophic civil liability Limits on coverage: $1M - $4M - $10M Key provisions: Coverage includes: general liability, employers liability, employee benefits, auto, D&O, No umbrella for EPL Additional $1M coverage for sexual misconduct 13
Umbrella Liability- Coverage Insuring for Catastrophic or large exposures. Things to consider when evaluating umbrella exposure: Church functions Student activities Church sponsored trips 14
Fidelity Bond- Coverage Protects the diocese/parish against employee theft, including forgery and computer fraud $50K to $2M limits available 1% deductible 15
Fidelity Bond- Activities to Consider to Avoid Loss Yearly audit Background checks Dividing responsibilities Written procedures Supervision Rotating duties 16
Risk Management Materials Church Insurance provides a variety of risk management materials on our website, including information on: Preventing sexual misconduct (Safeguarding God s People) How to ensure safety in the boiler room, kitchen and nursery Managing risks when a parish hosts outside groups Inflatable bounce houses for children Liquor liability at church events Non-owned auto liability Parish nurse program Water activities at church events Candle safety Using fire extinguishers Electrical safety The Good Steward For this and other information, go to: https://www.cpg.org/forms-and-publications/?label=publications/preventing-sexual-abuse https://www.cpg.org/forms-and-publications/?label=publications/property-and-casualty-insurance 17
Questions? 18