Church Insurance

Suggested Minimum Insurance Requirements for Churches

The Book of Discipline 2012 Par. 2533.2 requires local church trustees to annually review and report on the adequacy of local church property and liability insurance coverage “to ensure that the church, its properties, and its personnel are properly protected against risks.” Since 1797, the Book of Discipline has provided that the property and assets of local churches are held in trust for the benefit of the denomination. Inadequate insurance puts local church property and assets at risk, including the denomination’s trust interest therein. Therefore, the Minnesota Conference recommends the following minimum insurance requirements for local churches:

COMMERCIAL PACKAGE POLICY, including the following minimum limits:

  • Buildings, Organs & Contents: Insured to Replacement Value, “All Risk” Coverage
  • Fine Arts: $25,000
  • Comprehensive 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 $100,000

DIRECTORS & OFFICERS (D&O) POLICY, including the following minimum liability limits:

  • Directors’ & Officers: $1,000,000
  • Employment Practices Liability (EPL): $1,000,000 (including Sexual Harassment)

WORKERS’ COMPENSATION POLICY, including supply clergy:

  • Bodily Injury by Accident: Each accident $1,000,000
  • Bodily Injury by Disease: Policy limit $1,000,000

UMBRELLA POLICY (Excess Liability) – An Umbrella policy is suggested but not required.

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.

  • Per Occurrence Limit: $1,000,000 (minimum) / Aggregate $1,000,000

Workers' Compensation

Do you know that all employers are required to carry workers compensation coverage on all their employees? Here are some common myths and the facts behind them:

Myth #1: “We don’t have any staff, just the pastor.” The pastor is paid by the church and therefore is staff requiring workers’ compensation coverage.

Myth #2: “We don’t need workers’ compensation since we pay this person less than $600 per year.” Workers compensation does not have a minimum threshold.  If the person is paid staff, then he or she should be covered by your workers’ compensation policy.

Myth #3: “Since we give this person a form 1099, they are considered an independent contractor and we do not need to cover them.” There are rules governing who is considered an employee and who is considered an independent contractor.  Just giving someone a form 1099 does not make them an independent contractor.  If an independent contractor is injured on the job and it is determined that they should have been considered an employee, the church could be liable for higher claims, as well as fines and penalties.

First report of injury: This form must be completed by the employer (not the employee) for all injuries that happen at work—and sent to your insurer immediately. Detailed instructions are provided with the form.  Download form and instructions

Conference group policy: Do you know that the conference offers a group workers’ compensation policy through Church Mutual Insurance? Our group policy allows us to receive discounts on the premiums, which are passed along to churches. In many cases, the conference group policy provides more coverage and is less expensive than a church’s single-policy rate. Contact BJ Olsen (612-230-6138) to learn more. If you have coverage through Church Mutual, a nurse hotline is available for free to employees (as part of your coverage) for all non-life threatening injuries on the job.  View printable document with details

Minnesota Annual Conference of the United Methodist Church

122 West Franklin Avenue, Suite 400 Minneapolis, MN 55404

(612) 870-0058