Get In touch
Leave us a message
– Hey, everyone. I’m Lee Wright from the Baptist State Board of Missions. And today, we’re going to be talking about property and casualty insurance. And this is always a very, very important topic, but I think more so right now than maybe since the tornadoes of 2011 should we be talking about these things. And so as we think about these things, we’re gonna be talking about risk management and we’re going to be talking about your insurance and how to cover risk management in the most effective way possible. We have Steven Riggins here from GuideStone Property and Casualty Insurance. He is one of your agents that serves here in Alabama, and I’ll let him tell more about how that works in a little bit. But today, we’re going to answer your questions about your property and casualty insurance. Churches are different. Churches are different than their usual kind of business, and so there are different kinds of coverages that we need. He’ll explain those things to us. I’m going to help field your questions today and feed those to Steven. And so if there’s any way that we can help, we want to help in all the ways that we can. So, Steve, come take it away. Thank you, Steven.
– Thank you. So I’ll be covering a topic that we normally do here with the insurance workshops that the State Board of Missions plans. And so we’ll cover some general terms and coverages. We’ll cover some things that will sometimes get churches in trouble. The title of the presentation is What Churches Don’t Know Could Hurt You. And so we definitely don’t want that. We wanna keep you in situations where you have plenty of coverage and the right amount of coverage in the right places. Actually one of the tasks that the executive committee of the Southern Baptist Convention has chartered or given the GuideStone Property and Casualty team was just to make sure that our churches have the best insurance solutions out there, that we’re giving the best recommendations and we’re educating our churches and ministries well on how to protect themselves. So we’ll start off with some general terms and kinda get a little bit more advanced. And then as you have questions, I think you’ll be able to ask them on the little note area of the Zoom and Lee will ask those, and feel free to just ask those as I’m talking. I think we’ll take a couple breaks. I’ll let Lee schedule those. And then at the end, if you still have any questions, please feel free to ask. And my information will be at the end of the presentation, as well as Dave Hargrave. So we’re doing things a little bit differently this year in the wake of the pandemic. I’ve become a relationship manager with GuideStone, which means that I am in charge of managing all the existing client relationships with churches all over the state of Alabama and in Texas as well, in some areas of Texas. And then Dave Hargrave, who will be speaking at an insurance workshop I think coming up next month, is the account manager that is the person of contact if you would like any information for a quote. I don’t sell insurance anymore. I don’t make a commission to sell insurance. So I’m a good resource just to ask questions for. If you want kind of a no pressure conversation, I’ll be glad to do that. So give me a call or shoot me an email at any time. So we’ll start off with package policy. What is a package policy in insurance? Well, a package policy is kind of a big lump of coverages, mainly the property and liability coverages but can include some other things like inland marine coverages. Inland marine coverage is something that I’ll talk about later, but it’s an old concept in insurance that dates way back to, I think the 1700s. And so the property coverage is intended to cover all of your buildings, all of your stuff, all of your contents that go to buildings. It should protect you against things like fire, wind, tornadoes, hurricanes, theft, water damage, pipe bursts are becoming a huge issue in the last couple of years where we’ll have these freezing, this freezing cold weather. One recently went through Texas and did a lot of damage to a lot of churches where pipes froze and burst and so a lot of the building was damaged and a lot of the contents were damaged. It’s that idea. Liability coverage is something a little bit different. It protects us against any allegations of wrongdoing when it comes to bodily injury, we’ve actually hurt someone physically. Property damage, meaning we’ve, we’re responsible for damaging someone else’s things or even emotional injury, which is kind of a newer concern that we have in the church insurance world that really concerns us hurting someone’s feelings or stepping on someone’s toes or discriminating against someone. So there are a lot of new concepts. And even more recently, sovereign liability, which we’ll talk a little bit about. So best practices in property coverage. So there are a couple of main ways that you will cover your buildings and your content. The number one way that you would want to do that is replacement cost coverage. There’s another concept called actual cash value coverage, which sometimes, for churches, can be okay in certain situations. In many situations, it’s not something that you wanna get involved with. But let me explain what replacement cost coverage is first. So in replacement cost coverage, they will actually figure up the amount of money that it will take if a fire or a tornado or hurricane completely destroyed one of your buildings. And that amount of money is called 100% replacement cost coverage. We’re in a difficult time right now, in the wake of this pandemic where a lumber, that may be one question that Lee ask me later on, lumber is more expensive, steel is more expensive. labor is more expensive too, and actually finding laborers is harder. So the cost of labor to rebuild a structure and the cost of materials has gone up, which is something that’s become more difficult for insurance. And the real question is, is this something that’s temporary? I had a current account ask me this morning, is this something that’s temporary or is this something that’s going to last awhile? That’s a really hard question to answer. So replacement cost coverage on 100% is really the minimum that we always recommend for a church or ministry. Now, what we as GuideStone really tried to do is recommend strongly to all of our clients that they have 125% replacement cost coverage. And 125% is typically the highest that you can go in replacement cost coverage. I’ve never seen someone go higher than that. And so even a 125%, which is really designed to offset some of these shortages in labor materials and heightened costs that are sometimes temporary, even that may not be enough right now. So that’s a concern. For churches that, you already have a question, Lee?
– [Lee] Yeah, Steve. Can I ask you a question? So what should we do right now? Now, this housing shortage and the increase in costs, labor and materials, it’s probably gonna be a three, five-year thing, it may come back down some but it may not ever come back down to where it was a year ago. And so should we contact insurance and look at those values that we’ve labeled on our property? Should we do that now? Should we wait a few months to see if it settles down a little bit? Do I need to do it now and a year from now? What should I do?
– So I recommend, as you’re having your renewals, that going, response to that, the first response that I should give is yes, have these conversations with your agent. This is a really important conversation to have with your agent right now. As your renewal is coming up, it’s a good time to ask, do we need to look at our replacement cost coverage for our buildings? Should it be increased? And an insurance company, an underwriter specifically in an estimating team are gonna take that on a case-by-case basis. It has a lot to do with the types of buildings that you have, the type of construction. So yes, start off by having that conversation with your agent, especially at renewal time. If your renewal is not coming up soon and you are a little bit nervous and you wanna have that conversation now, pick up the phone and call your agent and ask him that question. To answer the should we wait part, it’s hard to say. I hope that it’s a temporary thing, but I think that you’re right, I think this is something that’s really gonna take years to really settle back down. So I think it’s important, my recommendation personally is just to have that conversation with your agent and make sure that you’re covering your buildings adequately and you’re at a number that you’re comfortable with as far as the replacement cost per square footage. Now, Lee, that question may be, what is a good recommendation for a cost per square footage estimate? And that’s subject to the use of the buildings, the type of the building. Some churches are, these days, are just really a big sanctuary and a large atrium and they may have some education space. Some older, more traditional churches are a smaller traditional sanctuary with a lot of education space, probably a big fellowship hall, a commercial kitchen. So every one of those different types of buildings has a different cost per square foot estimate. Also, the way that your buildings are built, the construction classification. Are they block walls? Are they metal frame walls? Are they wood walls? All those things go into that equation. So I’ll just give you a brief example in the residential world where buildings should typically rate out at about $100 per square foot on average in some places in Alabama and in Texas where GuideStone Property and Casualty insures churches are up to 200 to $230 per square foot. So there’s up to 100 or even more than 100% increase, temporarily right now, in replacement cost. So that’s hard for us to really know. But I really, if one of my churches ask me, what do we need to do, I pick up the phone with my estimating team and I have that conversation with them as the agent, and I say, the church has this concern and then right now they’re insured at $180 per square feet, do we need to bump that up to 250 or something like that and let the estimating team that are professionals really answer that question for us? I know a little bit about buildings. I know a little bit about construction, but I’m not a professional estimator, so I really can’t give that answer completely. But have that conversation with your agent.
– [Lee] One more that goes along with that. What are you seeing throughout the state? I know, I live in Huntsville now, and so I know that Huntsville is just insane trying to get buildings done. I know that Birmingham is pretty much the same way, Baldwin County. What are you seeing throughout the state? Is this more settled down in other parts or is it pretty insane everywhere?
– So what I’m experiencing is counties like Madison County, Jefferson, Shelby, Kennedy, Mobile, Baldwin County, the prices are going up, the number of contractors that are willing to actually give quotes on work is going down drastically. I’m actually trying to get quotes for renovation of just a small bathroom at my house and contractors don’t wanna do it because they can go somewhere else and get more work and more money. So I do know that there are contractors coming from more rural parts of the state to bid on jobs like that, where they’re traveling more now than they ever would have in past couple of years just because they can make better money in those counties they can come from. I’ve even heard of one contractor that’s coming from, like the Andalusia area to Shelby County, which is about a three and a half hour drive. So some of those contractors in rural areas are making up for a little bit of that shortage, but it’s still a major problem, yeah. And so getting a lot of the materials is difficult too. Sometimes getting contents for your home is also difficult, so yup. Okay, so some other options with replacement cost coverage. We recommend 100% at minimum or really 125%. For churches that are in a little bit different situation and maybe they have more building than what they really currently need, maybe there’s a church that was at 400 members five, 10 years ago, but now they’re at normal, non-COVID numbers or closer to 75 or 100 and they have a lot of educational space that they really don’t need, they’re in a different situation than a church that’s really growing in an upward trajectory. That might be a situation that is okay for someone to take 90% or 80% replacement cost coverage. But then we get into a sticky situation sometimes with some insurance companies called coinsurance. And I’ll explain that later on too. Coinsurance is something that you really wanna make sure you completely understand in your policy because it’s gotten a lot of churches in trouble in recent years. So I’ll explain that in just a second. And then you have scheduled coverage versus blanket coverage. Now, scheduled coverage means that each building that you have, maybe have five buildings, each building has a specific limit of insurance that that one particular building has. And so one building may have a million-dollar limit, one building they have a $2-million limit, one building may have a $3-million limit, okay? And if you’re on the coast and you have a percentage deductible, a percentage of wind and hail or even a flat percentage deductible, those things are really important, really understand as well because a percentage deductible is really a per building deductible in most cases. Sometimes it can be a policy-wide percentage deductible, but, I’m back, I got it. So anyway, blanket coverage is like this. It’s really that $1-million, $2-million, $3-million limit that’s added up to be $6 million total, so that building that’s scheduled at $1 million in the blanket, it may need $2 million but you’re only paying for one million. So you can kinda rob from Peter to pay Paul a little bit. You can take from building two and use that limit for building one. This is a really good option for a lot of churches that have a lot of buildings. It sometimes can allow you to reduce the amount of coverage that you need in total, but it’s really expensive in those cases too to have that blanket coverage because the insurance company can, has to pull exposure from one building to another. So it gets really complicated. So let’s talk about coinsurance. So coinsurance is a kind of a clause that’s on a lot of insurance policies that says, if you have, if you’re paying for 90% replacement cost coverage of a building and you have a million-dollar building, right, and you’re paying for $900,000 worth of coverage because you’re on a 90% coinsurance, but over time that building gets more and more expensive, say, right now, it’s a million and a half, $2-million building, but you keep paying for $900,000 worth of coverage. Now, you’ve actually gone below the threshold that you’re required to keep before having a coinsurance penalty. And let me explain that a little bit further ’cause it’s a very complicated topic. Coinsurance penalty is something that, it’s a penalty that’s assessed when you’re paying for less than what you’re contractually obligated to pay for. So if you’re obligated to pay for $900,000 on 90% coverage and then you have less than that, you have less than 90% of your total replacement cost coverage that’s needed, then you could be assessed a penalty for the difference between what you did pay for and what you should’ve paid for. And so that can even be assessed, that could be assessed on large total loss type claims or it can be assessed on smaller claims like a roof claims, for example. So if you have a $5,000 deductible and you have a $50,000 roof and you get assessed a $5,000 coinsurance penalty, you’re now out $10,000 as opposed to five. And those penalties can get really big, especially in times like now when buildings get more and more expensive over time to rebuild, but then you and your agent are not having that conversation every year to make sure that you have the right amount of coverage. So the coverage that you should, that you’re paying for should increase as those, as the times increase, when buildings are more expensive to replace. We at GuideStone, we really don’t recommend this. We don’t put coinsurance penalties and policies because we feel like it’s so, it’s such a difficult concept. We don’t wanna get our churches in situations where they’re really hurt by this. And so I would really recommend having a conversation with your agent no matter who that is and ask them specifically, is there a coinsurance penalty involved in this? Because odds are, if you are on 80% or 90% coinsurance, there very well may be a coinsurance penalty clause in your policy. Do we have any questions so far, Lee?
– [Lee] You did it. And especially when you said that about a partial loss, you think, well, we’ve got $900,000 worth of coverage and our roof is covered–
– ‘Cause it’s only a $2,000 roof.
– [Lee] Yeah, but it’s really not.
– Really not. Yeah, well, now let me ask you, if we are a church, that we have a big building, but the size of our church were not as big as we used to be, and so if something should happen to this building, whether it’s a major, major loss, or whether it’s a total loss, we might not want to build back this whole thing, we might wanna build back something smaller, so is there a way to deal with that? Now, I understand that the insurance company wants us to build it back just exactly like it was. So how can we deal with that?
– Good question. So I’ve covered all of the replacement cost options for property coverage specifically. And I’ve said if a church is really more on a downward trajectory, is not in a good position than what they were saying maybe five or 10 years ago, maybe they wanna take 90% or 80% coverage, replacement cost coverage, not coinsurance but just replacement cost coverage, that’s a good option for them in some cases. But what if a church is, say, an inner city Birmingham, or inner city Montgomery, and they’re really struggling. We actually had a one church in DeKalb recently that really fits this description. Actual cash value is sometimes a good option for churches like that. If they are a church that’s got 15 or 20 people meeting in a building that formerly had a thousand or 400 to 500, actual cash value coverage takes into account depreciation of the buildings and contents over time. So say, for example, you’ve got a million-dollar building and 100% replacement cost coverage should be a million, but you decide an actual cash value coverage of 500,000, that’s probably more than enough for you. If you had a fire or a windstorm or something that completely destroyed the building, you may not even want to build it back at all. You may wanna build a much smaller building that really would fit your needs. You may wanna move across town to another one place and build a smaller building. Actual cash value is sometimes a good option for churches like that because it wouldn’t give you a million dollars, it may give you 400,000 or 500,000. But understand, on a partial loss, like a roof loss, for example, you have wind, storm or a hailstorm come through and damage your roof. It also gives you a depreciated amount of that roof replacement cost as well. So every partial claim that you have would be assessed that depreciation cost, okay? And so on a $50,000 roof, you may only get 10,000, $15,000, and may have to come up with that yourself. And so you may be in a situation when that works for you, but those churches are really few and far between. So there are times that we have smaller buildings, like a church has a missionary house, or a pastorium that’s vacant for awhile, but they say, we don’t want replacement cost coverage. We wouldn’t even really rebuild this thing if it burned. We would just demolish it and make it a parking lot or make it a playground or something. Actual cash value coverage is probably a good coverage for that. Because if you did have to replace a roof, you might only be out five or $6,000. But on large church buildings, we really discourage actual cash value coverage. So that’s a great question. All right, so some other things to really note. Ministry owns personal property. That’s really the contents that we talked about. Clergy personal property is really contents that are really owned by the pastors and ministers of the church. Traditionally, a lot of pastors would have a library full of books and compendiums, encyclopedias. My grandfather had one. And so it’s a good idea to try to add some coverage for those types of things that typically will stay on the church property but are really owned by one of the ministers or pastors. And then you have personal property of others. So this is becoming more and more of a theme where your church may have a band, a contemporary worship band, and some of those band members may bring their own guitars or their own keyboard or even have a guitar that stays at the church most, all the time, and because that guitars, may have three or four of the guitars and so he doesn’t wanna take it back and forth. Personal property of others is a good option for churches that tend to have other people’s stuff, member’s stuff, visitor’s stuff that stay in the church a good bit or could be effected if there were a fire or a tornado, a windstorm type loss. And then inland marine coverage is that part that I mentioned. Insurance really started out with ocean marine coverage back in the 1600, 1700s when ships were crossing the Atlantic, trading back and forth. That was called ocean marine coverage. And then this new concept of inland marine coverage, new back in the 1700s, developed. And it was supposed to cover things that really stayed on land, moved around a lot. And so inland marine coverage is really designed for that. Inland marine coverage is a good option for churches that have a disaster relief trailer that’s generally parked somewhere else. Most all associations, or a lot of associations, have a trailer, a block trailer, or a disaster relief trailer, or shower trailer that’s probably parked at a church a majority of the time or parked at someone’s home, but moves around a lot. So inland marine coverage is a really good option for that. One benefit of inland marine coverage is you may have a $5,000 deductible on your package property part, but you could have a $250 deductible on the inland marine part of your coverage. It’s really neat, but it is expensive. So another option would be you have a $200,000 grand piano or you have a $500,000 pipe organ in your building. If you had a $5,000 or $10,000 deductible on your package policy but you wanted to schedule some of those things with a lower deductible. Lawn equipment also, those will be good options for inland marine coverage. And they don’t have to move around like a pipe organ stays exactly where it’s at all the time. They don’t necessarily have to move around. The inland marine coverage is really designed for things that do tend to move around. So your policy should include also some coverage for things, personal property things like tools and equipment, or sound equipment, audio/video equipment, or instruments that move around a lot in general. And what we do is we add coverage for those types of things really that goes anywhere in the world. So for a church that does a lot of mission work, that takes tools to South America or Africa or wherever, anywhere in the world really, you should have some coverage in your policy built in to protect you from those things. Rental property too. So a lot of churches will rent equipment like lights, or tools, or lifts or things. So having some coverage for rental property is also really important as well. I think I covered that pretty well. Okay, ordinance and law coverage. This is an area that a lot of policies that we see when we’re looking at other carriers are lacking, and that’s a dangerous place for you to be lacking coverage. It’s what we call a coverage gap. So ordinance and law coverage is really, say, for example, if you have a fire or a tornado and it damages 51% of your building and 49% of the building is undamaged, right, traditionally in insurance, the property coverage covers the damaged portion of the building, all right, and the undamaged portion of the building doesn’t need replaced ’cause it’s not damaged. But if your building inspector or fire marshal or code enforcer from your city or county came in and said, because your building was damaged at 51% of the total building square footage, we’re gonna make you tear down the entire thing and start over. You’re gonna need this piece right here, ordinance and law coverage. Ordinance and law coverage covers the undamaged portion when a code enforcer comes in and enforces some sort of code, building code, a fire code, and makes you replace an undamaged portion. So a lot of times we’ll see the increased cost of construction part of the undamaged construction part be sublimited at maybe 50,000 or 100,000, and then we’ll see the parts B and C that involved demolition and then adding things like sprinklers and ADA compliant bathrooms and hallways and access and things limited at like a blanket 50,000 or 100,000. So if you’re part A, for the replacement of the undamaged portion, is sublimited at, say, 300,000, 350,000, but you have a million-dollar building that only half is damaged, that 51% is damaged, then you need $500,000 worth of coverage to replace the undamaged portion. But you may only have 100 or 200 or 300,000. So you might be on the hook for 200, 300, $400,000 depending on the sublimit. What we really recommend in all cases for all buildings is that you set your ordinance and law part A, your undamaged portion coverage, at 100% replacement cost. This is a conversation that you need to have with your agent today as soon as you really as you can. Equipment breakdown coverage can also, it’s similar to interior building damage coverage and then sewer and drain backup coverage. These are also things that we recommend you have covered at 100% replacement cost coverage for the buildings because there’s a potential for an air handler to spark a fire that burns an entire building down. Now, there’s a potential for a pipe to burst in freezing weather and do hundreds of thousands, if not millions of dollars worth of damage. We had the freezing weather that came through Texas a few weeks ago now, maybe a little bit over a month now, and we have one church that didn’t get into their building for three or four days. And when they came back in their building, they had, I’ve seen the video, it’s crazy, they had multiple pipes burst all around them in their atrium. And it’s gonna be somewhere around to 300, I’m sorry, three million or maybe $4 million claim. So having a 25,000, $50,000 sublimit, which is what we typically see on almost every other policy, is a really dangerous thing. And then sewer and drain backup. You know, I typically see a 15,000, $25,000 sublimit on sewer and drain backup, which for those of you who’ve actually experienced that before know that that doesn’t even pay in a lot of cases or whoever your remediation company is. So I strongly recommend that you have that covered at 100% replacement cost as well ’cause we frequently have situations where we have one in South Alabama recently, Southwest Alabama, where the pipe and one of the toilets just backed up, they have no idea why, and it took a lot of work, it took a lot of repairs, a lot of demolishing concrete and walls and digging down and finding pipes, and it was way more expensive than your typical sublimit. So I’ve said sublimit a bunch and I haven’t really explained what sublimit is. And this will come, this has become really important as well in liability, is that a sublimit applies to property coverage and liability coverage in a lot of situations where 100% coverage is what you need, anything below that would be considered a sublimit, okay, it’s below what you really need, all right? Any questions so far? We’re tracking well?
– [Lee] Mm-hmm, mm-hmm.
– Okay, causes of loss. Most all policies these days are really on what’s called the special perils cause of loss that includes theft. We really don’t see many options anymore that are on a basic coverage form or a broad coverage form. If you do have that, then you need to have that conversation with your agent. If you do have like a vacant house, a vacant building, a lot of times an insurance company will place that on a basic coverage, basic perils coverage, which really just means that if it burns down, it’s covered. But it doesn’t cover things like theft and a lot of situations, not wind. Your broad coverage would cover fire and wind and maybe a couple other things. But special perils really means that anything that’s not specifically excluded in the policy language is covered. So it would cover things like fire, wind, hail, tornadoes, theft, interior building damage, if a pipe burst, things like that. Okay, so let’s move forward. Theft and crime coverage options. So there’s a few different theft options. The first option is theft of money and securities, which typically will cover liquid cash. It could cover checks and securities as well. But typically with the church, we’re only really talking about liquid cash. And so most churches should have a small amount of this, maybe 5,000, maybe for some churches you’re okay with 3,000. A lot of churches these days aren’t receiving a lot of cash and they’re not keeping a lot of cash on hand. So 3,000, $2,000 may be fine for you. There’s another coverage that’s a little bit similar to that called theft by electronic commerce, which is really someone stealing money from you electronically, someone accessing financial information electronically. It’s stealing from accounts that type of thing, but that someone’s stealing from you, okay? There’s another option called theft by coercion, which is a very new concept in insurance. Typically, in insurance, someone for theft coverage, someone has to be robbing you or stealing money from you. And so if you’re tricked or scammed or defrauded or coerced in any way into giving up money, then traditionally the insurance it wasn’t covered, except for now they have this new concept called theft by coercion coverage. Now, we’ve had, just in the last couple of years that we’ve had this covered, we’ve had a ton of churches that had a financial secretary that got an email that looked like it came from the pastor. And it said, hey, financial secretary, this is pastor so-and-so, and I need you to change my routing number for my payroll this week before you run payroll. And so the financial secretary, in a lot of cases, will just do it because it came from the pastor. Sometimes a financial secretary will say, hey, that doesn’t sound right. I’m gonna check on that. And they try to call the pastor and he’s down at the beach on vacation and doesn’t answer and so they just change it anyway ’cause they wanna make sure they do it before payroll runs. And then the next week, the pastor gets back from the beach and says, hey, where’s my paycheck? I didn’t see it in my bank account. And the financial secretary says, oh, we had a church in Texas recently that we found out about that the pastor had been sending emails from his own email account for years, every week that said, hey, I need you to route $1,000 here, hey, I need you to route $1,000 there. And over the course of years, maybe two years, they had sent a lot of money. I mean, many thousands of dollars to different accounts. And so finally, the financial secretary was in a meeting, a staff meeting, with the pastor, which they normally weren’t, and the financial secretary just happened to say, hey, what’s with this money that you’re emailing me about every week to route to here or there? And the pastor says, I have no idea what you’re talking about. I didn’t send you any email. He said, show me this email that you received. And so the person could pull the emails up and say, yeah, these are the emails that I got. And the pastor said, yeah, that’s my email address. So he went on to his email address and looked through all of his sent mail and couldn’t find any traces of ever sending an email about routing money. And they finally figured out with one of their IT professionals that someone had hacked the pastor’s email address and was sending out emails every week and then deleting them. They had a rule set where once they send an email, it just automatically deleted itself. And so, I mean, we’re talking about, I’m not sure what the number was, but potentially over $100,000 that was just gone. So theft by coercion is really important.
– [Lee] Will that include like RS scam?
– Yes, so anytime you’re tricked, scammed, coerced, defrauded, it should be covered. It’s a good conversation to have with your agent just to make sure. And also, ransomware’s a new one that we generally talk about when we’re talking about cyber liability. But now, someone hacks into your system and is holding your system hostage like they recently did with the Colonial Pipeline, and says, we want $5,000 or $10,000 before we’ll give your system back. That’s called ransomware. That should be covered as well under theft by coercion. Some companies will cover it a sublimited amount in the cyber liability portion if it’s kind of a broad cyber liability policy.
– [Lee] You had to have certain things in place to get that coverage?
– It will depend on your policy language. So for us, no, not really. For cyber liability, if there were a hack, we would assign a company to come in and investigate the hack, find out what happened, how to prevent it from happening again. And if financial information was stolen, we would assign a separate company to offer free identity theft protection for a certain period of time. I think it’s one year. My identity has been stolen multiple times by different hospital, or hackers that have hacked into hospital systems. And so I’ve gotten like three or four of those for years of identity theft protection over the years. But anyways, it’s that concept. Good question, though. Okay, so we’ve talked all about property. We’ve covered property pretty well. And we’ll move on to liability. Now, are there any, this is probably a good place for me to stop. Are there any questions that we filled in so far from any of the Zoom participants?
– [Lee] I don’t have any right at this minute. But one of the, going back to property. You wanna speak just a word about church-owned vehicles and non-church-owned vehicles?
– Yes, that goes hand in hand with liability.
– [Lee] Oh, okay.
– But we can go ahead and talk about that. I’m good with that.
– I’m sorry.
– No, no, no, you’re good. So I’ll say it like this. Anytime a church has members who are driving their own vehicles for ministry activities, ministry use, or they’re opening up their home for ministry activities, like a Bible study or a Disciple Now weekend, anything like that, your personal homeowners insurance or your personal auto insurance could, really does come into play there. Let me give an example, and I’ll start off with an example first. I’m not even gonna give any details, but my church had a person who was driving a vehicle down highway 280, near Birmingham with three, her daughter and two other of our youth girls years ago. And they were having such a good time, that they were laughing and joking, and the driver of the vehicle just swerved and caused her vehicle to roll over with her daughter and two of our youth girls and their vehicle. And her primary auto coverage, her personal auto coverage was primary. It was the first coverage, first insurance policy to cover the damage from her vehicle and any liability associated with the people that got hurt. I’ll give you another example. There was a church a few years ago that had a Discipleship Now weekend and they were hosting high school boys, and some of the boys were throwing the football, and so one of those boys got hit in the face and the homeowner was really pretty nervous to find out that their personal homeowners insurance was the first policy that really came into play. And then your church policy, it really sits on an excess basis over on, on top of, or in addition to, or secondary to that person’s primary homeowners insurance or auto insurance. I’ll give you another example that’s, my church example. So we have a School of Performing Arts as part of my church, and typically for the last few years the local Christmas parade, we would, we’d have a trailer for the School of Performing Arts, and so I’ve driven the float a couple of times, we have one guy that was doing it for the first time a couple of years ago. And long story short, he accidentally ran over a little girl’s leg because he pulled forward, he got in a hurry and he was being told by the organizers of the parade, come on, let’s go, and so he put his car on drive and pulled forward without checking his rear view mirror and drove over the little girl’s leg. And he was devastated to find out, number one, it was his fault, he’d caused it, it was a complete accident, but number two his auto policy was the primary policy that was affected by that, and I had to tell him that our GuideStone Brotherhood Mutual Insurance would sit over that on an excess basis, but his coverage will be the primary coverage in that situation. So having those conversations, understanding it, number one, and then having those conversations with people that are using their homeowners and using their personal vehicles for ministry use is really important. Now, we recommend that you, if you’re having people drive their personal vehicle for ministry use, that you actually put your hands on a copy of their insurance card and their driver’s license, make a copy of it, and make sure that they have adequate limits, okay? That’s really important because a lot of people out here in Alabama are driving around with just a minimum limit that are allowed. And we get that question a lot. And also, the follow-up question is, well, what happens if someone’s driving the church vehicle for a church activity, is there auto insurance affected by that, no. So that’s why we buy auto insurance on the church vehicle. And what we really recommend is if you have church vehicles, then use those vehicles for church activities. Your volunteer driver that’s driving the church vehicle is not gonna be affected personally if they accidentally get in a wreck. The church’s insurance would be primary on that. Now, they could be sued separately, but in most cases they’re gonna be protected by the church’s insurance company. Is there a follow-up question?
– [Lee] Let me ask about vehicles. So the new 15-passenger vans and things like that, they have a lot of safety features now that they didn’t 20 years ago?
– [Lee] So is it okay to purchase a 15-passenger van? What y’all’s position on that these days?
– I think if it’s older than 2008, we request, especially if it’s a van, but if it’s an older than 2008, we request that they review the backseat and make it a 12-passenger vehicle, which moves the weight up forward over the axles more so it’s not rear heavy. A lot of the vehicles that came out after 2008 would have a safety equipment like StabiliTrak, different manufacturers call it different things. But anything that’s within the last 10 years old is fine, especially if it’s designed to be a 15-passenger vehicle, that’s probably a key word, if it’s designed to be a 15-passenger vehicle, then it’s okay because it will have met all of the National Highway Transportation Safety Administration guidelines and recommendations. So that’s a good question. What if we have a van that was a 2006 van and it was 15 passengers that doesn’t have that safety equipment? Our recommendation is to take it out of service. If you’re not gonna take it out of service, take the back seats out and use it for things like shuttling equipment around the church property or take all the seats out and make run the lows with it occasionally and get eight-foot lumber with it that you can’t fit in anything else. But don’t use it as a passenger vehicle for more than just the driver and the person sitting in the passenger seat. It’s really dangerous. What I really recommend personally for churches is that you really try to get out of the transportation game altogether. You’ve got a lot of opportunities these days that you can, or options really, not opportunities, that you can rent vehicles from companies. And so I really strongly recommend that over a van or a bus that’s sitting on your property. And last year, it sat on the property for 365 days. This year, it may sit on the property for 345 days. You may have a van or a bus out on the road for 20 days out of the year. And I just think it’s much more economical myself to just rent a vehicle. Now, sometimes you have to rent way out and make sure that you’re reserving that vehicle in time to make sure you have it. And plan ahead. But I just think that that’s more safe. And from a liability perspective, too, it takes all the weight off of you having to maintain those vehicles. If a vehicle is sitting on your property for 345 days out a year, chances are you’re having to replace those tires every year because they’re dry rotting. And then so that’s just a problem churches face over the years. There was one more thing that I was gonna mention for that, but I think it’s kinda slipped my mind. So do you have another question?
– No, not right now.
– Okay. How are we doing on time? You wanna go a little bit longer before we take a break?
– [Lee] Just a little bit longer then we take a break.
– Okay, so let’s talk about liability. So in liability, remember liability coverage is for someone suing you basically because you’ve done some sort of wrong, you’ve committed a tort, a civil wrong against them. And that could involve bodily injury, property damage, or emotional injury. You’ve caused some sort of damage or injury to someone else and they’re suing you for it. And so the limit that you see on your policy, that big flashy $1 million limit, is really a limit for you’ve lost the lawsuit and now you owe that person a million dollars, $2 million, $3 million, whatever the case may be. So you have a general liability limit of, say, a million dollars. That’s the minimum that we really recommend for most every church. A smaller country church with not a lot of activities, not a lot of outreach, no children’s ministry, we probably would say, you may be okay with going with less than that. But in general, we really recommend a million dollars for every single church in Alabama. So separately, then you have an aggregate limit. So you may have a one million-dollar occurrence limit that says, the insurance company will pay up to a million dollars per occurrence within the policy period, okay? And then you have an aggregate limit, which is the total amount of money, that’s me, the total amount of money that the insurance company will pay within the policy period. And that policy period may be one year, it may be two years, it may be three years. But that’s really important to understand as well, as how much money total would they pay out in the policy period, and that’s the aggregate limit. Okay, and within that, the general liability generally will cover bodily injury and property damage. The general liability part of an insurance policy typically does not cover emotional injury. Discrimination or if you’ve hurt someone’s feelings or you stepped on someone’s toes. So anyway, so medical payments coverage is something that doesn’t really require a lawsuit in general. It’s an out-of-pocket expenses coverage that helps to pay for things like a deductible. For example, I have a high deductible plan, that I have copays that I have to pay for doctor’s visits, and then I have a really high emergency room copay. So it will pay for things like that, that are out-of-pocket expenses when a family has an injury on the church premises. Most every church has experienced this at some point because it’s one of the most often occurring types of claims that happen within churches. People trip on sidewalks and children fall on playgrounds and break elbows and scuff up arms and things. And so if a child’s parent has to take them to the emergency room and get stitches or get a cast or sometimes get surgery, those out-of-pocket expenses are what’s covered under medical payments. It doesn’t require a lawsuit, and it’s a first dollar. It really is the insurance company saying, here, here’s $3,000, here’s $2,000, here’s $300 to try to prevent them from getting sued from not handling the situation well. So what is an adequate medical payments amount? I think if you ask 10 different agents, you’re gonna get 10 different answers. What we really recommend with the GuideStone Property and Casualty Team is $10,000 per person, all right? Excess and umbrella coverage.
– [Lee] Can I stop you? medical. Were there any churches sued over COVID? I say the choir have got COVID, were there any churches sued over that? And look at the future, let’s say that we got different strains of COVID that come out next year and we deal with it again, do we need some kind of coverage on that?
– Good question. First answer, no, not that I know of. I don’t think any of our policyholders have been sued from any sort of wrongdoing associated with pandemic. That was a huge concern a year ago. At this time, it’s what do we do about closing down? What do we do about having online service? Took everybody by surprise. And then as we were transitioning around the June-July timeframe and they’re really having, opening back up and having a somewhat normal offering of activities, how do we enforce the right amount of distancing, mask use, and how do we structure things where we’re not gonna be accused of doing something wrong or doing too much or doing too less? It was a really difficult thing for a lot of churches and pastors to kinda walk through. There’s not a lot of concern, I don’t think, with us that you’re going to do something wrong as long as you’re trying to take reasonable steps to really prevent the spread of the disease. It could happen again. It might not be COVID. It might be something else. And so you always wanna take reasonable steps to prevent the spread of the vaccine. Good cleaning as well. Like a lot of churches paid for additional companies to come in and do extra cleaning and sanitation. A lot of churches paid for HPAC contractors to come in and add UV, I don’t, I’m not even the right person to ask, but UV systems that, and filtration systems that kill the germs in the ductwork of the buildings. I don’t think anybody can really make a good case that those types of churches were being negligent or not taking reasonable steps. But there is an exclusion in most every policy, I think, that really excludes that type of loss. Because now, it’s a known expectable type of thing, and then it’s also a catastrophic widespread thing. So typically in insurance, things that are widespread losses, catastrophic losses or things that wouldn’t be covered, flood, for example, we didn’t really talk about flood insurance and earthquake insurance but those are typically catastrophic things that aren’t in a typical insurance policy. You have to pull those from federal programs. And so COVID is one of those things. It’s a widespread catastrophic type of loss and it’s, you can reasonably expect that it may happen again in the future, so you have to take steps on your own to try to prevent any sort of negligence on your part. So that’s a good question. Does that kinda answer that well? I don’t know of a policy out there you get that is a pandemic policy, a viral liability policy. It may be coming. That may be one of the next things that gets written. And typically in insurance, remember I said general liability typically covers bodily injury and property damage where you’ve caused someone to be hurt unintentionally. We’ll get into exclusions here in just a second, but things like sexual acts liability, counseling liability, directors and officers liability those things have all been added because churches have faced them over time and insurance companies like Brotherhood have written coverages specifically to cover those things. They’ve modified the policy to cover them, so interesting. So claims-made versus occurrence-based coverage. Another huge area that churches should really be careful and understanding. Having that conversation with your agent is really important. What is occurrence-based coverage? I’ll start there. Occurrence-based liability coverage means that as long as an incident is covered, you’re paying for the insurance, say, for sexual acts liability, for example, as long as you’re paying for the sexual acts liability coverage and a sexual misconduct issue happens inside the policy period and is coverable in the policy period, no matter when you report it, if it’s five years, 10 years, 15 years later, if you have occurrence-based sexual acts liability coverage, it will be covered forever as long as that insurance company is in business, is solvent. And so it’s also important to have an insurance company that’s been around for a long time ’cause you want them to be, or if they’ve been around 100 years, you can always reasonably expect that they should be around for another 100 years even though we know companies got a business all the time. But that’s really important to understand. Because in things like sexual acts liability, we’ve learned that sometimes it takes years for something to be reported and you don’t want there to be any sort of limitation and coverage when a person that’s a 30-year-old says, I was abused in my church as a 10-year-old. It’s been 20 years. So claims-made coverage is something that’s similar but has another caveat. So if a sexual acts liability claim occurs in the policy period, but also is reported in the policy period, it would be covered, okay? If it occurs in the policy period but it’s not reported until 10 years later and you switched insurance companies, you’re no longer in, with that other insurance company, you may have changed insurance companies four or five times, you may be one of those churches that really takes quote every single year, and you may have gone through five different insurance companies in that 10 years. And so figuring out when it happened is the first step, and who’s gonna cover it, and how is it gonna be covered is really difficult. It’s really important to, when you have a claims-made coverage, make sure you’re purchasing either a tail coverage or retroactive liability coverage as well. Because if you don’t, then that coverage that you’re paying for in 2010, when you swapped over to a different insurance company in 2011, that 2010 coverage, excuse me, expired. It is no longer good. You cannot recover it in 2015 or 2010 or 2020, excuse me, you can no longer recover any sort of insurance dollars for that coverage. Hopefully I explained that well.
– [Lee] Well, if we used to have occurrence-based but now we’ve got claims-made and something happens, who pays?
– Oh, that’s a good question too. So the insurance companies are gonna get together and say, well, it happens when you were the insurance company. And then the other insurance company is gonna say, no, it happened when you were the insurance company. But it may have happened when they were both the insurance company. So you may have a situation where one insurance company that you were on occurrence-based coverage with pays part of that claim, half of the claim. And then the other insurance company that was insuring you in that other time period says, well, you were on claims-made coverage and now you’re no longer with us, and so you can’t recover anything so you’re on your own for that portion. And so we always recommend occurrence-based coverage because it never expires. Claims-made coverage is much cheaper, and so it’s much more attractive. When an agent comes in and says, here, look at this, I can save you a thousand dollars, it’s much more attractive because of the bottom line. Most churches look very heavily at the bottom line. That’s really important. We’re talking about tied money. But the gap that you’re creating from going to occurrence-based, from occurrence-based to claims-made is a really big deal. And most churches don’t understand it. They weren’t explained by their agent, whoever their agent may have been, but they didn’t explain that well and so they didn’t even know to ask those questions.
– [Lee] If I don’t know what to ask, which way is GuideStone?
– So we do not offer any claims-made coverage, okay? All of the liability coverages that we offer are occurrence-based coverages. And we also don’t offer any liability coverage that have a deductible or a retention when it’s a liability coverage. It’s called a retention. But a lot of times you’ll see an agent come in and offer a really attractive looking proposal that’s saving you a thousand dollars, but it’s going from occurrence-made, occurrence-based coverage to claims-made coverage and he’s also got a $10,000 retention on your directors and officers coverage or umbrella coverage. That’s a big deal to kinda consider as well. We don’t recommend and we don’t offer any deductibles or retentions when it comes to liability coverage. Okay, so exclusions. Remember now, going back to the general liability part, the general liability part says that we will cover you against any allegations or any lawsuits pertaining to bodily injury or property damage that you unintentionally caused. So if you intentionally caused or should have reasonably expected that you would cause bodily injury or property damage by whatever this activity is, then it would be excluded under the general liability policy. It’s called an intentional acts exclusion. There’s also an illegal acts exclusion that says, if you do anything illegal and you cause someone bodily injury or property damage, you shouldn’t have done that because it’s illegal, so we’re not going to cover you for it, okay? So then a company will modify those intentional acts and illegal acts exclusions by adding different liability endorsements, like sexual acts liability endorsement coverage, directors and officers, counseling, things like that. What they’re doing is they’re saying, we know that you may cause someone bodily injury or property damage intentionally and we’ll cover you with a few caveats. So security team coverage is really important these days. If you have a security team member, if you’re not with GuideStone and Brotherhood, you really need to ask your agent, do we have security team coverage, is our security team covered if they carry a firearm, can you show us in the policy where it’s covered? But if a security team person in the course of their Sunday morning duties has to pull their firearm and pointed at someone and pull the trigger in defense of the church and the membership, that’s an intentional act, of them drawing that firearm out and pointing it to someone and pulling the trigger. Under traditional insurance policy, that will be excluded under the intentional acts exclusion unless they’ve modified it. And that’s a really important thing to understand. So that’s one thing that we offer, is security team coverage that’s really rare and it’s actually broad. It covers the security team person on a primary basis in addition to the church. And there’s some additional things there too, counseling coverage and things like that. But exclusions are really important thing to really understand. All right, and then crossover claims. So Lee alluded to this just a second ago. What happens when you have multiple insurance companies that are insuring different things? You may be with an insurance broker that has your property insurance with one company, carrier. They have some liability with another carrier. They have some more liability with another carrier. And then when a claim happens, if it’s involving property damage, auto liability, sexual acts liability, I mean, the insurance companies are gonna be fighting back and forth, saying, no, this is you, this is your responsibility, and the other one’s, no, we’re not responsible of this, you’re responsible for it. That’s a headache that you don’t wanna deal with as a church ministry. We really recommend having one solution that covers all of your coverages, all of your package coverages specifically for this reason, that you know that one company can’t argue with itself about who’s gonna cover what. So a crossover claim could involve, there’ll be some examples later, but it can involve different lines of coverage and it also can cover different carriers, but basically it’s something that involves different areas of coverage. So, like I said, property coverage, inland marine coverage, auto coverage, liability coverage, and then excess. We always recommend that a church or a ministry have at least $1 million of excess liability on top of their million-dollar occurrence limit, period. For every church we recommend that. But for a church that has a van or a bus, we really recommend $2 million these days of excess or umbrella liability because we’ve had situations where a van or a bus will be driving down a road, they get an accident, and you don’t have just four people injured, you have 15 people injured. Or if it’s a large bus, requires a CDL, 20 people, 25 people injured, that becomes a huge claim. And we’ve had auto, we’ve had rollovers specifically, auto claims, that have become three and $4 million claims very quickly. So it’s really important to have the right amount of coverage and really important to have one carrier that you can trust to insure all those things well. Who’s covered, where you’re covered, what are the exclusions, what are the limitations these are all really important things to really understand especially before you get in the vehicle and you go to the beach for a youth trip or before you fly off to Honduras for a mission trip. Okay.
– [Lee] We’ll take a break.
– Yes, I think it’s a perfect time for a break.
– And I’ll give a few examples while we’re talking, you get some water.
– [Steven] Okay.
– And let me just say a few things. First of all, we had a question, is this being recorded? And yes it is. It’s being recorded. It will be available in probably two weeks, possibly a little bit longer than two weeks. And you can go to pinnaclealabama, it’s just the initials, pinnacle A-L.org. And you can find this one and other recordings that have been done through these recent months and I hope that that’s helpful to you. So you could look at this again. If you feel like you’ve missed something or want to go back over something, you’re certainly welcome to look at it again. Another thing that I wanted to mention, and this is the time for it because we were talking about intentional acts. And so sexual misconduct is a huge deal these days. And one of the things that we want to help do is prevent child sexual abuse. And we have partnered with MinistrySafe, you can find that at ministrysafe.org, O-R-G, to help us to understand the problems of child sexual abuse, how we can be knowledgeable about offenders and the kinds of behaviors that they might do that might be an indication that we have a possible problem. So I know that you haven’t heard a whole lot about that in quite a while as we’ve been shut down largely due to COVID, but we will be, in the future, we will be having a live event from the folks at MinistrySafe. But in the meantime, we encourage you to join MinistrySafe, and we’ve made a special arrangement with MinistrySafe so that you can join for $50 for the first year. So you go to ministrysafe.com, ministrysafe.com/alsbom, and that is A-L-S-B-O-M. And so if you want to go to ministrysafe.com/alsbom, there is the link that you’ll find this special deal that you can join for the first year for $50. And so you can find all kinds of resources there, a lot of their materials are online and you could find them there. They have other things that will be helpful to you. I hope you’ll get involved in helping to protect your children from child sexual abuse. But also, and Steven was talking about this, be sure to check with your insurance company about your exclusions and how is child sexual abuse treated by your insurance company. Is it excluded? Is it included? Is it something that you have to jump through certain hoops in order to have good coverage on? And then the other question is, what is your coverage if the worse should happen? What kind of coverage should you have? There’s a few insurance companies that their coverage limits are extremely small and would be really almost like nothing compared to the potential danger and danger even when you want to think about the child first, but there is an insurance need there to be able to cover such a thing in a lot of build and way. So y’all take a stand-up break, take just a moment, and we’ll get started back in just a moment. We’ll give you time for a stand-up break. That’d be a quick trip to the restroom and then we’ll get started back again. Let us know if there’s anything that we can do. Ask a question. You can type in your question online and we’ll be glad to answer that question. All right, we’ll get started back again. I do want to apologize. I spelled that wrong. Alabama is spelled out. So it is pinnaclealabama, all one word, .org. pinnaclealabama.org. And you could find these and other recordings for you. I do want to mention also ministrysafe.com, and that is a source that we have partnered with to help you to protect children from child sexual abuse. So we’ll get started back again. Steven, thanks.
– Okay, so we’ll start right where we left off. Counseling acts liability. One of the most often, one of the most applicable endorsements that we see in church policies really is intended to cover your pastors and your ministers that are doing counsel. And a lot of policies that aren’t written by church-specific liability riding carrier, this will typically just cover a staff member who is paid as a pastor and really only intended to cover a trained staff member who has been through seminary or received counseling training or they have to have a certificate. What we do at GuideStone and Brotherhood is a little bit different because we realize that sometimes lay leaders, volunteers, our counseling, and really we take on a very broad definition of what counseling is, so it should really apply to all of your lay leaders, all of your volunteers, disciplers, people who are actually discipling students, discipling, even adults through a discipleship program, and it should really be a broad definition that really applies to volunteers in addition to staff members. I would recommend a million dollars worth of, worth of an occurrence limit here, but also it should be part of your excess/umbrella. So you really should have, no matter who you are, what church you are, you really should have a minimum of $2 million worth of counseling acts liability, okay? Lee has just talked a lot about how important having sexual acts coverage is. GuideStone and the Alabama State Board of Missions both take it very seriously. We both partner with MinistrySafe. That ought to tell you right there how important it is. Brotherhood pays out 3.8 sexual misconduct claims per week in America. It’s a huge problem. And the Southern Baptist church world is under fire right now because we are the ones in the news, we’re the ones in the Houston Chronicles, we’re the ones being scooped by aol.com. And so it’s so important as a church, as a ministry to prevent these things from happening in the first place through things like a child protection policy manual, having a two-adult rule, the adults have to be adults that have to be non-related. A two-adult rule doesn’t mean you can have a husband and a wife in a classroom teaching 10-year-old boys, 10-year-old girls or whatever. Two related people may be dishonest and try to protect a person if they know that sexual misconduct has happened. Having a six-month rule. Some churches even go as far as a one-year rule. That’s great. But a six-month rule at minimum means that people that are coming in from another church or maybe new believers or someone that’s coming in from out of state has to be involved in other areas of ministry, actively for at least six months before they can volunteer with the children’s ministry. That doesn’t mean that you’ve known them for six months or maybe they’ve visited the church for six months, it really means that they’ve been actively involved in other areas of the ministry. Are they coming to Sunday school regularly? Are you seeing that spiritual side of them? Are they involved in the men’s ministry or women’s ministry? Are they involved in discipleship, or outreach, or missions, or whatever? Are they involved in some way in other areas of the ministry? Are you really getting to know them well? That’s really important. Having observation windows in all of your classrooms where children and youth, any minors meet. And then having a provision that requires them to be open and visible at all times. I can’t tell you how many churches I’ve gone through. In the children’s ministry, we’ll have observation windows and every single door, but three or four of them will be blocked by some decorations. And I recognize that sometimes to keep kids from being distracted about parents walking by, but this is an accountability tool that really looks great on your church. For parents that can walk by and check on their children, sometimes they may not want the child to be distracted, but most parents wanna see that accountability, wanna see that visibility into those classrooms. And not only that, it goes a long way in just providing accountability for your volunteers, which I as a volunteers, as a youth volunteer, I want accountability. I want someone else in the room with me to vouch for me if there’s ever an allegation. So two-adult rule, six-month rule, observation windows. But then we recommend background checks. We recommend at least having a background check every two to three years for all volunteers who volunteer in children’s ministry or youth ministry. And then also, for all volunteers that go to camp or drive a bus, really anybody that’s ever alone with a person who’s under the age of 18. It’s so important. But to go beyond that, it’s also equally important to have adequate insurance coverage. Because on the one hand, we wanna prevent the claim from ever happening in the first place, but in reality, we know that a lot of churches do all of that well and they still have sexual misconduct claims within the church. So having an adequate amount of insurance is also really important. Having $1 million at minimum of sexual acts liability is really important. But we also recommend it to be part of your excess/umbrella as well. Now, how much is enough? We never know. But it really depends on how big your church is, how active your children’s ministry and youth ministry are, where you’re going, what you’re doing, but it needs to cover all of your volunteers, in addition to your staff, in a similar way to the counseling acts coverage, it needs to go with you wherever you go. So a lot of normal Southern Baptist churches will go to camp, will take kids to CentriKid or Centrifuge for the youth or go to the beach retreat or go to Gatlinburg for a winter retreat. But you may even have students going off to Honduras or Guatemala. I’ll take a group of students to Trinidad every summer, in normal summer. So if you’re going overseas or out of the country, that coverage needs to go with you as well. That’s so important, to have the right coverage, the right amounts that covers the right people, and goes to the right places, basically wherever you go. What we do is we put a worldwide liability extension on these liability coverages, that says, if it happens anywhere in the world, it’s covered. There’s only one exclusion to that worldwide extension, it’s for rental vehicles. If you rent a vehicle anywhere in the country, we would cover you anywhere. But if you go to Trinidad, you have to buy that Avis or that Hertz rental coverage.
– [Lee] So we used to buy a trip insurance for that particular trip. And I’m talking about going out of the country, to another country, and generally you’re not covered. So with GuideStone, we would be covered and not need to buy that extra trip insurance?
– That’s right. So what you would want trip insurance for at that point is not really the liability associated with you hurting someone, you’re doing something wrong, you’re damaging someone’s property, but at that point it’s medical coverage for the trip participants. So we have a standalone thing that’s just medical coverage for those people that are going as well. It’s really affordable. The lowest plan is something like $25 a person. I think the highest plan is at $45 a person. So for a 10-person trip, we’re talking about $450 for the best coverage. And within our worldwide liability extension, it also comes with $25,000 worth of kidnap and ransom coverage too. So if you’ve got the worldwide liability extension and you’re getting the medical trip insurance coverage for each participant, if they get sick and have to go to the doctor, you have coverage for that. If they get injured and need surgery, you’re covered. If they get severely injured and need to be evacuated to a place that has an adequate level of medical care for whatever that injury is, say, they have to be evacuated to, if you’re in Trinidad, it would be Miami or Houston, or, say, if you’re in Africa, it might be to Europe or somewhere in that area that has an adequate level of insurance. So it would cover evacuation. It would cover kidnap and ransom. It would cover a lot of different things. So those things are really important to have as a church ’cause I do know of a lot of churches that are going on mission trips that don’t carry any insurance with them. That’s a really great question. Do you have a follow-up question with that? Okay, cool. So I did hit forward. So directors and officers coverage. Directors and officers coverage, it really is intended to cover your staff and your lay leaders who are making strategic financial decisions based on what to do with the tithes and offerings and maybe tuition money that’s received as the church or a church with a school or daycare. Now, the concept of mishandling those types of funds is called fiduciary liability. So we as whatever the body is, we as elders, we as deacons, we as the finance committee having fiduciary liability or a fiduciary responsibility to use those funds properly, to not misuse them in any wrong way, illegal way, or any even unintentionally wrong way. So let me give you an example. I think I’m perfectly okay to use this example. My church has a cross-fund which was donated to us years ago. I’ve been in the church for, I think, 11 years and it really predates when I was a member of the church. So maybe 15 or 20 years ago someone left money as part of an estate, I think, maybe for a cross-fund, and that money hasn’t been touched in years because we can’t, it’s not enough money to actually put across as designated in the contribution, but it would take a lot of money to do that so nobody wants to supplement that. So we have money in a designated fund that we can’t use in any other way other than the designated purpose. If we did that, if we use the cross-fund for a mission trip, we would have then breached our fiduciary responsibility towards that person who gave that designated money. A lot of churches are saying, well, I mean, we’ve got 30, 40, 50 designated funds, what do we do? Well, we recommend you reduce the number of designated funds, at least probably a better person to have that conversation with. But from an insurance perspective, it’s a good idea to limit the amount of designated funds that you’re allowing people to contribute to. Have people contribute to a general fund and then allow your finance committee or your elders or whatever to then disburse those funds into needed areas. Employment practices liability is–
– [Lee] Let me–
– Go ahead, Lee.
– [Lee] One other thing. Let’s say the worst happens. There’s embezzlement. And it’s $100,000 over a period of five years. First of all, tell me how, am I covered on that? And also, I’ve heard that some insurance companies, if you allow that, if you allow them to pay back, then you’re also allowing them to prosecute that person. Tell me about that one.
– Is that true?
– Not that I’ve ever heard of, but there may be a carrier out there that does that. I would have to follow-up with the correct answer to that question. But in my experience, no, but there may be one out there. So we didn’t really cover what we call ministry personnel dishonesty, what a lot of companies will call employee theft, right, back in the property theft discussion. So with most secular insurance carriers, the coverage is called employee theft, so if any employee embezzles or steals or skims over time in any way, they will be covered up to a certain policy limit, all right?
– [Lee] Yeah, is that gonna cover, say, a volunteer treasurer?
– If it’s employee theft, no. In most cases, no. A lay leader, a volunteer treasurer, a finance committee, the accounting team, the ushers that actually receive it, which not a lot of churches are having ushers right now, we may return to that, but those volunteers that touch money wouldn’t be protected, wouldn’t be covered. Really the church wouldn’t be covered for them. What we do is we caught ministry personnel dishonesty because we will cover any of your volunteers who are touching money. So we had a situation two years ago now with a church in Alabama who installed a camera system in their church. And then a couple of months later, they were looking at the ushers collecting the money in the atrium of the sanctuary and noticed that one usher had pocketed some of the money. And they went back every Sunday, as far back as their DVR would allow them to go, and they discovered that that same person was skimming money off the offering plate every single Sunday. They had no idea how much money was being skimmed every Sunday, per Sunday. They had no idea how long it had been going on. Now they had coverage for it, but the real problem is they really couldn’t figure out how much they needed to try to claim. But ministry personnel dishonesty would really cover any of your volunteers from skimming, embezzling, stealing, whatever. It’s a great question. It should cover that back in the property coverage. So employment practices liability coverage. Employment practices liability coverage covers the church when there’s an allegation of any sort of wrongdoing involving hiring and firing, okay? This could be discrimination. This could be, the church or ministry didn’t hire me because, or it could be, the church fired me because, or it could be involving sexual misconduct between employees of a church or ministry. So whenever sexual misconduct is involved, it’s typically a really bad, really expensive type of a claim. And in general, employment practices liability isn’t the most often occurring claim. It is one of the top reasons that churches tend to land in court, but it is the most, it is the highest claim payment on average for all of the liability claims. Because in general, if a staff member makes an allegation against the church that they did something wrong, in most cases, it actually happened. We had a ministry involved a couple of years ago that had a very bad employment practices liability claim that involves sexual misconduct within the ministry, and it was an employer that had done bad things, I guess, have been involved in misconduct with multiple different employees. And once one employee came forward, multiple employees came forward and said, yes, that also happened to me as well. So it was a multi-million-dollar suit that I think still settle for close to, if not slightly over a million dollars. So not only is it financially horrible, but it’s devastating to a ministry, in a church, and so you wanna try to prevent those things from happening in the first place with good policies and procedures, a good personnel manual, but having good coverage here is really important too. So typically the lowest amount that we will recommend for a church is $300. And that really is for the smallest church out there in Alabama. That’s the rural church that maybe has one bivocational pastor and maybe one part-time financial secretary or treasurer for a church that, say, has five employees, we recommend a million. For a large church that has, say, 20, 30, 40 employees, we would actually recommend that they have a million dollars worth of underlying occurrence limit with also an additional at least $1 million into their excess or umbrella as well. So remember, this is a really important, it’s not the most often occurring claim, it’s not the one that’s hitting the newspapers every month, but it is one that happens all the time, it’s one of the top reasons why churches land in court and it’s a very significant type of claim. Actually almost every policy that we see of another carrier has this coverage specifically, employment practices and directors and officers coverage both on claims-made coverage. So typically we’ll see a policy that has an occurrence-based general liability and they probably have occurrence-based counseling acts coverage and occurrence-based sexual acts or sexual misconduct liability. But when they get into what they call professional liabilities, then they’ll have claims-made coverage. So that’s a really important conversation to have with your agent as well. I know you said this is occurrence-based, but are they all occurrence-based? Is my directors and officers, is my employment practices, is my employee benefits, which I don’t think we have a list of it here, but is my employee benefits liability coverage on an occurrence-based as well? Now, employee benefits liability is, to help protect the church that really makes an error or omission and following through with a promised employee benefit. Church, years ago, somewhere in Alabama, had a pastor that came to the church and they gave the pastor a GuideStone life insurance application and said, pastor, fill this out, turn it back into the financial secretary and we’ll open a GuideStone life insurance policy in your name and we’ll draft the premium every month out of your paycheck. The pastor died a year or two later of cancer and the church had a conversation with his widow and said, hey, we have GuideStone life insurance coverage in the pastor’s name, we’ll get the information to get back with you. Well, they went looking for the information and couldn’t find it. And they called GuideStone, and Guidestone said, I’m sorry, we don’t have a policy, and we’ve never been paid a premium, we’ve never received a signed application for this life insurance coverage. And they had promised an employee benefit to that pastor and his widow. And so long story short, they did not have this coverage and ended up having to make the decision whether or not to pay out-of-pocket for that promised benefit. And it was a lot of money. So employee benefits liability is a really important one as well. And having them on an occurrence-based is so important. So religious freedom coverage. We call it religious freedom. Brotherhood wrote this coverage and really trademark it, so you’ll never see it called religious freedom with anybody else. Sometimes you may see something that kind of says something similar, religious expression or something similar. But it’s the idea that you can say something or make a decision, a biblical decision, to do or not to do something that could offend someone. You may be preaching a part of the Bible that exposes our beliefs about marriage and gender identity and things like that. And so the Equality Act is a huge concern with this right now, too. How’s the Equality Act gonna affect churches and ministries, Christian schools? It’s something that could change still before it’s even passed in the Senate. I think it’s been passed in the House now but still could have changes in language, and so we’re concerned about that. We’re concerned that churches could say no to a homosexual wedding and be sued for it. And the State Board of Missions, maybe four or five years ago now, recommended language be added in your bylaws that points specifically to scripture and says, we affirm the biblical definition of marriage and so we will not be doing any homosexual weddings, but still you could be sued for it. So religious freedom coverage protects you against any sort of allegation of wrongdoing involving emotional injury. You’ve said something or you’ve made a decision, you’ve done something or didn’t do something that really hurt someone’s feelings or offends them or causes you to infringe on their civil rights. So you may have committed an actual illegal act that will be excluded under the illegal acts exclusion on most every single policy. Well, we modify that to say, if you do commit an illegal act and discriminate against someone, we will protect you. I have mentioned security operations liability already. But if you have a security team and especially if your security team is carrying firearms or even if you have kind of the informal, like, well, we don’t have a security team, we have Bob that locks the doors and monitors the hallways, but we don’t really have a security team, well, does Bob carry a firearm? Yeah. Well, what happens if Bob has to pull out his firearm and use it on a Sunday? Well, I don’t know. Well, most churches are doing some form of this and it may be formal, it may be a formal security team, it may be an informal security team. We have a lot of resources, actually I brought a packet to kinda show that we have a lot of resources that will help churches formalize your security team ’cause it’s so important in terms of liability to have a written plan of action, written policies and procedures to know what the coverage is but also to be covered. So let me just step out real quick and I’ll come right back and I’ll show you. This is Brotherhood’s Safety and Security Guidebook. And so you can see how thick it is. It’s a very extensive resource for a lot of churches. And so I was the head of my security team for seven years at my church. I love to help churches with just getting resources and helping them with questions. I get a lot of those types of questions and it’s died down a little bit. Typically after a church shooting, it’s something that the State Board of Missions Office, I know, and I get a lot of questions about, it’s starting to die down a little bit, but it’s always something that you wanna have on the forefront of someone’s mind. So we recommend a million dollars worth of liability coverage for the church, but also to protect the security team member themselves, to protect them against any sort of bodily injury or property damage, even an intentional act where they’re pulling out their fire arm and having to protect the church congregation and that protects them on a primary basis. But also has increased medical payments, dollars per person, in the wake of like an active shooter type situation. That helps to pay for counseling in the wake of an active shooter type situation. That even we’ll hire an outside firm to handle all of the speaking or really responding in the wake of an active shooter situation, someone that’s kind of like a PR firm. But something that’s very broad like that is what we recommend. But it also needs to be included in your excess/umbrella coverage. So for a typical church that’s kind of an average Southern Baptist Alabama church, we recommend having a million dollars minimum, really $2 million including your excess. For a larger church, you really want to see about increasing that as well when it comes to security operations liability. Now, a lot of churches are saying, we don’t have a security team. We pay an off-duty police officer from Prattville or from wherever, from Shelby County, for example. And so Shelby County deputies, for example, that do off duty work, I know that they’re required to carry their own insurance, but a lot of the local city departments don’t require that. We will actually pay, we will actually cover an off duty police officer as well. So it’s a really cool coverage. Worldwide liability and medical extension we’ve talked about extensively, but basically extending all these coverages everywhere you go and everywhere you’re doing activities, administrative is really important. You don’t wanna hop on the bus and take off down to the beach or to Gatlinburg or wherever without verifying that you have coverage that’s gonna with you. Typically in insurance, if you don’t have this type of endorsement, your liability coverage is really only going to stay right around the church buildings and property, listed scheduled locations. So that can be a huge gap that you can get in trouble with. And then liability for special events. Anytime you’re doing a VBS, trick or treat, an outreach, especially food-related things, you just need to make sure that they’re covered. What we do is we just add an endorsement and they re-pulse it. It just covers all those special events. But just making sure that those types of things are covered are really important. Anytime you’re going off site, just having a good conversation with your agent to make sure those things are covered is really key. All right, so best practices in auto. We’ve talked about that a little bit. So we recommend a million dollars of underlying auto insurance coverage with at least a minimum of one million for vans, really for vans and buses, in most cases we recommend two million, but a minimum of one million for most buses and vans, especially 15-passenger vans, $2 million of excess coverage, so it’s three million total. For larger churches that have large vans that are using them regularly, it’s a good idea to even have more than that. Because with a bus larger than 15 passengers, there’s a potential for a three million plus dollar claim if there’s a rollover. Uninsured and under-insured motorist coverage is really important for you to pay attention to. It’s that concept, and everybody’s familiar with it. If somebody driving around without insurance themselves and they run into you, they cause an accident, that’s not your fault, but they don’t have insurance or maybe they have insurance but not enough insurance. And typically, if your average person is driving around in a car with, say, $300,000 worth of liability coverage on their own personal vehicle and you need two million or $3 million and they run into you, well, what do they need? They need two or $3 million, but they only have 300,000, or whatever the case may be. Having underinsured motorist coverage will pick up on that gap between what they really should have and what they have. All right, I see a lot of churches out there with 50,000, $100,000 limit in this particular piece. I see a lot of churches out there with $500,000 limits on their underlying auto liability coverage as well. So this is a huge area for you to just pay attention to. All right, the higher, do you have a question?
– [Lee] This is one that I hear the explanation and it always is one that I have to kinda go back and think through, now why do I wanna do that? So this is a liability, so it has to do if they injured my passengers.
– [Lee] Now, it doesn’t fix my vehicle, does it?
– Yes, yeah. So it can. So uninsured/underinsured motorist coverage will protect your property damage and it will protect any liability on their part associated with whatever injuries are in the vehicle. They’re liable for it because they’ve committed a tort. They’ve committed a civil wrong. They’ve done property damage and bodily injury. So you’re just picking up on their either underinsured coverage or their lack of coverage altogether. So yes, it would cover the property damage for your vehicle. If you have comprehensive coverage as well, the comprehensive coverage could pay for it. But in general, you wanna have the underinsured and uninsured motorist coverage for the bodily injury portion of those passengers getting hurt. Okay, so hired and non-owned auto. We talked about that a little bit. Anytime you’re renting, hiring, using, chartering a vehicle that doesn’t belong to you, you really should have this coverage. And we put it in the package, which is different than what a lot of other carriers would do. A lot of carriers will put it into auto insurance. So we’re gonna mention this in the auto discussion. But what we recommend is really a million dollars of underlying coverage with at least a minimum of one million of excess/umbrella coverage for hired and non-owned rental vehicle coverage. And that really, most auto companies are going to ensure that within the country. It’s not gonna go to Honduras, Guatemala, wherever. So when you’re going overseas on a mission trip, you’re gonna want to buy that rental coverage as well. Comprehensive and collision coverage just pays for the damage of your own vehicle. And collision coverage, it could pay for your vehicle. If your vehicle is moving and you collide with someone basically. But then in comprehensive coverage, it could pay for your own property damage. If there’s wind coverage, storm coverage, if a tree falls on your car and totals it, that type of thing. And then you have a concept of liability only coverage as well, which a lot of churches will do, especially with older vehicles. We see a lot of older vehicles on liability only coverage. So if you’ve got a 15-year-old van that you’re only using to drive across town, to go to Lowe’s or Home Depot and back, liability only is probably a good option for you. But if you’re gonna want that vehicle to be replaced in the wake of an accident, you’re going to want collision and comprehensive coverage. Typically those come with a deductible as well. So you can pick, sometimes a $250 deductible, what I recommend is either 500 or $1,000 deductible pricing wise, but those typically will come with a deductible. Who can drive ministry vehicles? Boy, that’s a question. So what we recommend for any church that has any policy is really setting a minimum age of 21 for vans, 25 for buses. So any sort of a mini bus or a CDL required bus, of course, we want a minimum of 25 years old there for buses. Now, for a van, I’d recommend a maximum age of 75, okay? For a bus, a maximum age of 70. But anybody over the age of 75, I recommend having them having DOT physical every year. So for a doctor and certify, hey, Bob was okay to continue driving. He exercises. He’s in good shape. We trust him. I believe that Brotherhood’s absolute cutoff is 80 years old for all drivers. So even if you can pass the DOT physical at 80, at that point, you would be disqualified for driving. We do recommend MVRs on drivers. If you have a short list of drivers, a lot of times your insurance company, your auto insurance company will run MVRs in the background without even telling you, but we recommend that you have a list of drivers, of your most common drivers. Brotherhood doesn’t require that the driver be on the list to be covered. So we don’t actually ask for a list of every single driver, some churches might have a hundred person list of drivers. But just having a list of your most common drivers. And then running MVRs on them every two to three years is a really good idea. If anybody has any sort of history of traffic violations or history of wrecks, I know it’s a hard conversation to have with someone, one of your members, but you really need to disqualify that for driving. That’s always kind of a tough thing to think about. So umbrella and excess coverage, like I said, we recommend one million, really two million for 15-passenger or larger on buses and vans too. All right, any questions about auto coverage? Okay, all right, workers comp. So basically, I mean, if you have five or more employees in the state of Alabama, you’re required to carry a work comp. But we recommend work comp for everybody. We have a lot of churches out there that have a bivocational pastor and a part-time treasurer that don’t carry work comp insurance. It’s not legally required. But the real question is, do we wanna take care of our pastor or our staff member if they get in a work-related injury? Work comp coverage pays for all work-related injuries, lost wages, all future loss wages, all future medical payments that are a result of that injury. And so by purchasing work comp insurance, you’re really taking care of them. Now, typically the limits that you see on a work comp policy are really the third-party liability. So that’s like your pastor gets injured, as part of work activity, maybe he’s on the way to the hospital to do a visitation and he’s injured in a car wreck, and his spouse sues the insurance company or sues the church for X number. Typically, the numbers that you see there are gonna cover this third-party lawsuits. We do recommend at least a minimum of $500,000 worth of liability limits there. But in most cases, in most churches, we really recommend a million and we’ll even put those in the excess/umbrella. It’s really cheap actually. It doesn’t cost much, such a really, it’s kind of a no-brainer. Contractors. So it’s becoming a huge deal now that a lot of churches are ending up having to pay higher work comp premiums because they’re reporting contractors on their audit every year and they’re not getting certificates of work comp insurance proving that that contractor has work comp coverage. And that contractor may have work comp coverage already, but we recommend that you select contractors that have adequate liability coverage and adequate work comp coverage, that you get a certificate of work comp insurance showing that they do and that you turn that in on the audit so that you don’t have to pay that work comp premium. Going with someone that’s 20, $30 cheaper, excuse me, that 20 or $30 cheaper every week on yard work or lawn maintenance, may actually be awash if you have to pay their work comp premium. So I always mention that.
– [Lee] We’ve got one question that goes back to auto. Should the church include auto liability for the pastor’s vehicle?
– So I really need a follow-up question there. For the pastor’s personal vehicle, that he owns, you wouldn’t be able to. You would actually have to own a vehicle to have personal auto coverage for you. If you were to say purchase a vehicle for the pastor’s sole use, then there’s a specific endorsement that goes onto an auto policy that would, that really it would be your vehicle that you own that’s really given to the pastor for daily use. So in that case, yes. But if the pastor owns the vehicle, no. Technically, he would be responsible for his primary auto coverage, and then you could cover him on an excess basis as he’s doing church activities. So my pastor drives his own personal vehicle to the hospital and he drives it to different houses on visitation, and so his truck is insured by himself and then we pay, we cover him on an excess basis. And that’s probably what, I mean, I assume that’s probably what you’re asking about.
– [Lee] Well, so tell me the difference between that and non-owned auto. Is that more for volunteers?
– So non-owned auto means that you’re driving a vehicle that you don’t own. If the pastor’s driving his own personal vehicle that he owns, it would be covered under the hired and non-owned and rental vehicle coverage because he owns it. So really what you’re doing is you’re covering him on an excess basis with your general liability package policy, not your auto policy.
– [Lee] Okay.
– Yep, good question, though. All right, so some examples. Okay, so bodily injury example. So the youth decide to hold an extreme sport night and a 17-year-old rappels from a 100-foot cliff face, and his harness is not properly secured and he falls 50 feet breaking both legs. He’s got a bodily injury. Now, the church isn’t responsible for that, probably. Didn’t have any negligence that contributed to it, but it’s on the church activity. So the church could be sued for bodily injury. Now, another example that was happening a few years ago in camps was that camps will pay a student to come out and supervise those high risk courses, the zip lines and things like that. And so they would train the college student at the beginning of the season, but a mistake was made halfway through the season and someone tried to go Superman off of the zip line and the harness was hooked to the wrong carabiner. It was hooked to the carabiner that was supposed to hold a water bottle or a light equipment, not the one that was a structural carabiner, and that person fell and broke their neck or broke their spine and was critically injured. And so that’s kind of a severe example. Okay–
– [Lee] So just activities, like the high-risk activities that Guidestone will say don’t do it.
– [Lee] And we’re not gonna cover?
– Slip and slide kickball. Like I was actually, I got hurt myself personally. I don’t know, maybe eight or nine years ago. Maybe, it was like five or six years ago now. Playing slip and slide Wiffle ball at a lake retreat with the youth. And I knew it was a bad idea. And you know that pesky youth pastor kept goading me and he instigated me to the point where I said, okay, I’ll do it. And so for the first couple minutes, I was really, like really safe and made sure that I didn’t do anything crazy, but about 15 minutes into play, maybe 20 minutes into play and I let my guard down and I ended up slipping and really busted it hard. I mean, really. And I’ve had back problems ever since. And so anytime youth are doing things like that, broomball on an ice rink, it’s a terrible idea. But that’s what they love to do. So with Brotherhood and GuideStone, we’re not gonna say don’t do it, but we are gonna say be smart, smart as you can about it. Don’t have adults out there doing things that they can’t do. Don’t have a 50-year-old, a 60-year-old out there playing softball with the 20-year-olds and the 30-year-olds. There’s a high chance they’re gonna pull an ACL or their Achilles tendon. We have that happened years ago with a guy at my church. Inflatables are really dangerous. Most churches are involved with inflatables, and a lot of associations actually have inflatables. Actually I think one locally here has inflatables that they will, just basically give out to churches to use and maybe not even rent. Those are really dangerous. But if you do them right, if they’re anchored down properly, done right, and supervised well, they’re okay. But it’s something that an insurance company typically is not very tolerant with. And generally, there’s a premium associated with paying for that endorsement too. So yeah, the answer to your question is yes, there are a lot of those high risk activities. Water activities as well. So lake days, beach trips, things where kids can drown or just be significantly injured. Motorboats, ski boats, things like that. Those are all high risk activities that we do because the youth love them. But not great ideas. Okay, property damage. The church quizzing team holds a car wash to raise money to attend a national meet. And a car is scratched by a quiz team member who uses an abrasive pad on the hood. Another example is you have a volunteer that goes up there and cuts the grass because you don’t wanna pay someone, a contractor, to come do the yard work. And he’s riding on the lawnmower and has the ejection side is facing the road and he throws a rock and hits a car. Maybe a fire starts at your church and it spreads to a neighboring building, that type of thing. So personal injury media liability. The church pastor finds a poem on the internet and uses it in his sermon. The sermon is made available on the church’s website and the author of the poem brings suit for copyright infringement. Or these days we’re all live streaming services almost. So you live stream the lyrics of a worship song without giving credit to the writer. So another one is the church creates a place on its website to post prayer requests. And a teenage girl asks prayer, asks for prayer for her family as she finds out her father is having an affair, which her mother does not know about. And the girl provides identifying information in her request and the father brings an invasion of privacy claim when the information becomes known in the community. Her allegations of the pastor, hearing something at a counseling session and then that information being, becoming well-known within the church and the member assuming that the pastor devolves the information that they were told in a counseling session. I’ve heard that a few times.
– [Lee] We might mention, you mentioned that about the author suing over the use of a poem. One thing we might mention is that the usual license for, provides for us the opportunity to put worship lyrics on the screen, for example, that does not cover the performance of it set out over the internet, that’s a separate–
– That’s correct.
– That’s a separate issue. And I think there’s likely, especially during COVID, with all of our streaming that we’re doing, I’m afraid that we’re probably putting out a lot of things on streaming that probably we don’t have the coverage under copyright to do and we’re probably very liable for some things that we’re putting out there.
– That’s right. And there are a lot of infringements that really slotted on the radar, but there are companies out there that will actively search live streams, live feeds. There’s a local radio show out of Birmingham that commits copyright infringements all the time. And so they’ll have, their YouTube shows will be pulled off, off of YouTube because of copyright infringements. So yeah, knowing that and understanding is really important as well because there is liability associated with it. And the way that we cover that is through the media liability coverage. Okay, so a male pastor begins counseling a female parishioner. After several sessions, the pastor and the parishioner began having an affair. And the parishioner claims that she was under the control, under the influence, control of the pastor and brings a claim against him and the church. So that’s an example of counseling liability. So I’ll give one more. The bottom one, a woman with a history of emotional problems and alcohol and drug dependency comes to the church and begins counseling with the pastor. After several months, she leaves and goes on a severe drinking binge. She severely damages her liver as a result and later dies. And the family brings a claim for wrongful death against the pastor for failing to get her into professional counseling. So he has committed a tort, he’s committed a civil wrong ’cause he failed to do something that they felt like he had an obligation to do through counseling. Okay, so a few sexual acts examples, and we can go on and on and on, and I think I’ll just, I’ll name a couple here. So youth worker develops a relationship with a member of the local youth group and inappropriate contact occurs. Typically, when we’re talking about inappropriate contact or sexual misconduct in general, the guys, well, the attorneys over at MinistrySafe will say that, in general, one of the most common places for sexual misconduct happened with churches and ministries. This is actually offsite. It’s at those camps and retreats. It’s typically in bathrooms. So always be looking out for opportunities like that, trying to prevent those things. Two teens in a lock-in go off by themselves and engage inappropriate contact. I mentioned that because lock-in is something that every church used to do back in the day, are one of those times when there’s an increased possibility or probability of sexual misconduct to occur. And then a bus driver fondles one of the children he picks up for Sunday morning services. Now, remember, thinking back to the background check discussion that I mentioned that even people that are just driving a vehicle with children or youth in the vehicle need to be background checked. So if you have a bus ministry or if you just have a volunteer that you know of that’s transporting a girl to and from church or a person to and from church, anybody who’s driving a vehicle or in any space where children and youth are present and they’re alone with them or even with a second adult, need to be background checked. And for a bus ministry, we always recommend a second adult on a bus as well to satisfy that two-adult rule. Okay, improper reporting liability examples. So a 12-year-old camper tells her counselor that she is being molested by her father. The counselor consoles the camper, but doesn’t report the incident to camp leadership or the authorities. Years later, after more abuse, the father is arrested and the camp counselor, the camp and counselor are sued for failure to report. So mandatory reporting is pretty well-known amongst pastors and ministers, church staff, but knowing who’s the mandatory reporter is really important, always. But anytime there’s an allegation of sexual abuse, pretty much anybody involved with the church needs to be reporting it, whether you’re considered a mandatory reporter or not. Question, no. A volunteer Sunday school teacher witnesses another teacher take a child into a remote area of the building. Upon returning, the child is visibly shaking but says that nothing happened. The first teacher confronts the second teacher but is told that nothing happened and that the child had simply left something in the other part of the building and they want to retrieve it. The first teacher doesn’t fully believe the story but doesn’t report the incident to anyone. And it is later discovered, that the second teacher had molested the child and that a claim is brought against the first teacher and the church. So anytime someone is trying to get outside of those barriers that you’ve put in place to prevent sexual misconduct is a red flag. If it just doesn’t look right, then there’s probably a reason. And we as believers, I believe we as believers a lot of times we’ll have the Holy Spirit really give us discernment in these situations. So when we feel like something is wrong, that may be the Holy Spirit telling us, hey, something’s wrong here. So always, always preach, preach safety with your volunteers, your Sunday school teachers, your children’s ministry workers, always report things like this. Fill out an actual accident report and document it. And if there’s any reason to believe that there’s sexual misconduct, I believe, you probably need to take it a little bit further than just documenting it. So a teen with a history of making things up approaches the youth pastor and accuses her mother of abusing her. The child does have some visible signs of trauma so that the youth pastor reports the incident to CPS, just to be safe, just like we just talked about. CPS investigates and ultimately clears the mother of any wrongdoing but her reputation has been seriously damaged. She brings a claim against the youth pastor and the church for falsely reporting her. Are we covered for this situation? You should be. But if you don’t report a situation like this, then your reputation can be damaged if something did happen. If you do report it and you damage another person’s reputation, you need to be covered for it. That’s a question for your agent, just to verify. All right, I’ll skip a couple of these. So the middle one, a male choir leader aggressively hugs other volunteer choir members who are offended by the action. Is this a problem? I wish we had people here to really ask that. I mean, that doesn’t look right, it doesn’t seem right, it doesn’t really add up. Do we know of actual sexual harassment occurring in that situation? That’s kind of one of those gray areas. But anytime that you really feel like this is going on, that there’s something borderline going on, it’s a good idea to sit that person down and have a serious conversation with them. A lot of times people ask about, what do we do if there’s an actual sexual offender that’s on the sexual offender registry that’s wanting to come to the church, what do we do then? With situations like this, you need to have a structured model of, we sit down with that person, we set boundaries and we set rules and guidelines, and then we have an accountability structure that holds them accountable. Well, situations like this are, I mean, very similar.
– [Lee] I’ve dealt with that kind of situation. And I’ve seen it fairly common in quite a few churches where there is someone who is kind of offensive with their aggressive hug. And sometimes, especially like the women of the church know that and avoid that person if they can.
– But is it something that actually causes a liability lawsuit and can it?
– [Lee] Oh, it can, okay.
– Yeah, I mean really in all reality, I mean, someone can sue the church for just about anything. The question is how much grounds do they have to sue? How easily can the church defend that suit and how easily can that person accuse or really prove negligence? Because when negligence is proven, then that lawsuit really goes from compensatory damages to, you’ve caused the person $1,000 worth of counseling damage or $5,000 worth of counseling damage to literally there’s no limit to the amount of punitive damages that can be assessed by a lawsuit that involves negligence or proves negligence. So yes, if you allow something like that to happen without having a conversation with that person and setting down some ground rules and just say, hey, side hugs aloud, okay, frontal hugs, no hard hugs, no, absolutely not. If you did not go through some sort of process like that, yes, you could be sued. Now, could it be proven that you’ve committed a tort or you’ve failed to fulfill some sort of obligation to protect that person? That will be difficult for them to prove, but then you still have the heartache of dealing with a lawsuit, dealing with the social media backlash, the defense reimbursement costs alone could be huge. And so one thing I didn’t mention is that when we’re talking about liability limits, remember I didn’t say that we’re talking about you lost the lawsuit, but I didn’t actually mention that the defense reimbursement cost can a lot of times play into the actual limit, the actual liability limit as well. So what Brotherhood and GuideStone do is we separate the actual liability limit from the defense costs, and we say, there’s no amount of money that we will limit or we will not pay really, there’s no limit to the amount of money that we will pay to defend the church or a covered person if they’re accused of wrongdoing. But some liability policy will actually lump the defense reimbursement cost in with the actual judgment. So if you have a million-dollar judgment against you but you’ve had to pay $200,000 worth of attorney fees through the two or three years of fighting that lawsuit, then you’re out that 200, $300, $300,000 worth of defense reimbursement cost that you have to pay separately. So that’s also kind of a key gap that churches need to be aware of. Let’s see, a pastor repeatedly asks his volunteer secretary to work late alone with him at the office and his actions while there make her feel uncomfortable. I mean, is that sexual harassment? It may be; it may not be. But do you as a church have written into your personnel manual and your bylaws a method of employees being able to report things like this that a pastor do or the direct supervisors do? Okay, directors and officers examples. A wealthy, elderly woman begins attending the insured church. She soon becomes a Christian and decides to change her will to leave a substantial sum of her estate to the church. A year later, she dies. And the woman’s heirs bring a financial damage claim against the church stating that the pastor exploited their mother and that she was not mentally sound when she changed her will. That’s an interesting one. Employment practices liability. So an unmarried female teacher at the insured’s Christian school becomes pregnant. And the school terminates her for violation of the conduct policy. The school also sends a letter home to parents stating that she is being dismissed for immoral conduct. She brings a claim for emotional harm for the comments made and also for financial harm and breach of contract. So within some of those employee laws, the equal opportunity employment laws, I think it’s that, it actually may be something similar, but through those laws that limit how companies can really discriminate against someone based on their age, sex, gender, religious beliefs, all those things, handicaps. There actually is some room for a religious exception there that some churches can be excepted from those discrimination laws if it pertains to things like someone living in an alternate lifestyle that doesn’t really jive with the church’s bylaws or the church’s beliefs. But you still can be sued for it, so that you still have to pay the attorney fees, the defense cost to defend yourself even if you did actually have it dismissed or when. Okay, religious freedom liability examples. I really talked about that pretty extensively. I think I’ll skip that one if that’s okay. Discrimination liability example. So a family that has attended the church for years adopts a child that is HIV positive. The nursery workers are informed of the condition and one of the volunteers makes the information known to others in the church. Several families complain and state that they will move to another church if the child is allowed to be in the nursery. As a result, the church has a separate room devoted for the child that is HIV positive. The family of the child brings a claim for emotional harm as a result of the medical discrimination. So this is something that churches aren’t really equipped to handle, most children’s ministry workers and children’s ministry, children’s ministers, I should say, and pastors really aren’t equipped to handle this type of thing, so they struggle with what to do and how to do it. But just to know that your staff needs to be trained and to not ever divulge any sort of personal identifying information or private medical information against anybody. So the people that that information is disclosed to, by the parents or guardians or the person themself, need to keep that close at heart. Security operations liability example. So a security team member uses excessive force during an incident and causes bodily injury. The injured person sues the church, the team member and the security director. The church and the security director would still have coverage, even if the team member was found to have acted unreasonably. And that is really what GuideStone and Brotherhood. So really don’t know, I’m gonna be honest here. I don’t know of another carrier at the moment that will cover an armed security team. I really don’t know of any other carrier that will, that has an endorsement in their policy that says we will cover a security team. I have heard of churches that have said that our agent told us that our security team is covered. But my really, my advice to that type of church is to really say, Mr. or Mrs. Agent, will you send me the policy language that says the security team is covered? But in this situation, yes, with GuideStone Rotary, it would be covered. Okay, so cyber is one that we didn’t really talk about. It’s really one of the most emerging concerns that we as an agency have because we’re just finding out really that 43% of all cyber attacks that are happening in the country are happening to non-profits like churches and schools. And so it’s a huge deal. And typically churches aren’t training employees on how to determine whether something is a legitimate email or not. We talked about that a little bit with the theft by coercion coverage. But GuideStone has a lot of private information that we can’t have divulged or stolen through some sort of phishing attack or hacking attack. And so we have training every month on how to identify cyber threats and identify phishing emails and how to report them to our IT departments. And how to hover over links and determine whether they’re legitimate links or not. And really look at all the language, read the entire email first if it’s an external email, not coming from another GuideStone employee. My assumption is that most churches and ministries aren’t doing that good of a job with cybersecurity. So there’s a huge risk there. We recommend a minimum of 500,000 for most, any church, but really a million for almost every other large church in the state of Alabama. But within that liability coverage as well, you need to have coverage that really helps identify that breach and prevent it in the future. Now, a church member signs up to have his tithe deducted regularly from his bank account once a month. A bookkeeper for the church mistakenly changes the direct withdrawal date and money is removed prematurely from the member’s account. As a result, he balances several checks and incurs overdraft fees as well as harm to his reputation. He brings a claim for financial damage and personal injury against the church. Now, typically a lot of churches are really outsourcing online giving to another company like Realm, for example, but we do have churches out there that do have, at least do have some financial information. And a lot of times it’s really financial information of staff specifically. So it’s the pastor’s routing number. It’s the youth pastor’s routing number or financial account information. So anyway, you really need to have that stuff protected really well. A good antivirus and anti-malware software, and really be training your staff and volunteers on how to prevent those types of cyber breaches and cyber attacks. Okay, so this is my information as well as Dave’s. It does say I’m still an account manager. I am the relationship manager for Alabama now, so that’s slightly different. But my phone number and my email address are the exact same. So if you do have any follow-up questions for me, please give me a call or shoot me an email. I’ll be glad to answer any questions that you have. My job is really to help our Southern Baptist churches in Alabama have the best information that you can get to make the best decisions to help you protect your church and get out there and advance the kingdom. So please do contact me if you have any questions. I think at this point, I’ll ask you guys to ask any follow-up questions through the Zoom site and we’ll see if they can ask me any of those that are outstanding.
– [Lee] We don’t have any right now. But I was gonna ask just, do you see a big mistake that churches made just as they approach their insurance, just from the very beginning, the way that they look at it?
– We see a lot. And I wouldn’t say that looking predominantly at the bottom line is a mistake because a lot of churches are in the financial situation where you really have to look at the bottom line. We thought a year ago that this pandemic was going to cripple a large number of churches throughout the state of Alabama. And it has crippled some. It’s caused some to close their doors, and that’s terrible. But for a large majority of our clients and a lot of the prospects thought at the state of Alabama, we’ve really found out that they’ve actually come up in as good a financial state, if not better. Some churches are actually saying, we’re in better shape than we were going into COVID. Giving was down, but also expenses were down and they were able to do some maintenance on buildings and things that they’ve been puttin’ off for years. I would say, when you get into the habit of looking at the bottom line and quoting your insurance every year and just looking primarily at the bottom line premium, that can get you in some trouble. You know, GuideStone exists because there were a lot of churches that were being taken advantage of years ago, and there are a lot of agents out there that don’t know the church ministry insurance world like they really should if they’re gonna be involved in it. And so churches were getting in situations that they were underinsured. Maybe they have 80% replacement cost coverage and a coinsurance penalty and didn’t know it. Maybe they had actual cash value coverage or maybe there were exclusions on their liability policy that they didn’t know about. And so really picking an agency that understands how a church ministry insurance works, and you can trust to be, your trusted advisors that you can trust that are gonna give you the most honest, the best information for you, leave the decision up to you, but really look out for you. And really for a company to say that we exist to advance the kingdom by serving the church, that’s a big deal. I would say, if you get outside of that, it’s not that it’s necessarily dangerous, sometimes you have to do that as a church, but it can open yourself up to some gaps in coverage. Yeah, I think that probably covers it pretty well.
– All right, thank you so much, Steven. We sure do appreciate you and your knowledge of the things that we need to know and oftentimes we don’t understand. So thank you so much, Steven.
– [Steven] You’re welcome.
– And I’m gonna have a prayer for us to dismiss and we thank you for being with us today and I hope this has been very helpful to you as you consider your coverages of the things that you might need to look at concerning your insurance, but also as we seek to be good stewards of all that God has given to us. So let’s pray together as we’re dismissed. Father, thank You so much for today. Thank You that we can help to answer some important questions for churches. Thank You so much for Steven and his ministry with Guidestone and for his ability to help us to understand these complicated matters. And Father, I pray for each one of us, each one of our churches that You would help us to be very wise in all that we do and the proper usage of the funds that You’ve given to us and thank You for today. In Jesus’ name, Amen.
– Thank you so much for being with us.