Understanding Commercial
Policies for Places of Worship
This presentation does not provide legal advice.
You should discuss specific questions with your
trusted financial advisor or insurance producer.
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What is the Maryland Insurance Administration
The Maryland Insurance Administration (MIA) is the state agency that
regulates insurance in Maryland. The MIA:
• Licenses insurers and insurance producers (agents or brokers).
• Examines the business practices of licensees to ensure compliance.
• Monitors solvency of insurers.
• Reviews/approves insurance policy forms. Reviews insurance rates
to ensure rates are not inadequate, excessive or unfairly
discriminatory.
• Investigates consumer and provider complaints and allegations of
fraud.
MIA Video and Webinar playlist
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What is Commercial Insurance for Places of Worship?
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Commercial insurance policies for Places of Worship are insurance policies designed to protect the unique
buildings and the unique liability risks Places of Worship face.
Wind blows, rain falls, pipes burst. Just as with our own homes and lives, Places of Worship face risks.
Today we face more intense storms than we have seen in the past, and that risk is increasing. We often
don’t think a lot about insurance until something goes wrong, but having a policy that is designed to protect
the unique risks of your organization is important.
What is Commercial Insurance for Places of Worship?
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The prospect of being responsible for making insurance decisions for your Place of Worship can be
intimidating. As a leader of your organization, you don’t need to be an insurance expert to properly protect
your building(s) and the liabilities you face, but knowing the questions to ask and working with an insurance
producer you trust is key so you and the other leaders of your organization can have peace of mind and
focus on your ministry.
Unique Risks – Places of Worship
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Unique building structures have unique insurance needs. Places of
Worship are often large, ornate buildings with large and complex roof
structures. Places of Worship often house unique and valuable items
like stained glass windows, pews, organs, any many others.
Unique Risks – Places of Worship
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Places of Worship often house preschools, elementary schools, daycare
centers, and food pantries. You may host community meetings, and
other events designed to welcome and serve the public. With the
kindness of opening your doors to your community comes risk, such as
injury to volunteers who may not be particularly skilled for a task or
injury to visitors, increased theft risk, or accidental damage to property.
Each organization must take the time to carefully consider its own risks.
Common Parts of the Commercial Policy
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• Building and Business Personal Property coverage
• Liability insurance coverage
What is a Peril?
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A peril is a cause of loss. Your Building and Business
Personal Property coverage is designed to protect you
from loss due to covered perils.
Policies may be of the named peril type (fire,
windstorm, hail, vandalism, theft, etc.), the open perils
type (coverage for all causes of loss unless the cause of
loss is specifically excluded), or a combination of both.
Certain perils rarely covered under a standard policy
include flood, earth movement, mudslide, and
earthquake.
Common Parts of the Insurance Policy
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Building and Business Personal Property coverage
• Building and items permanently attached to the building
• Other structures on property
• Completed additions
• Signage
• Glass windows and their protective coverings, including
stained glass
• Sound equipment
• Fixtures
Common Parts of the Insurance Policy
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Building and Business Personal Property coverage
• Permanently installed machinery and property, such as steeples and pews
• Outdoor furniture
• Appliances
• Personal effects owned by clergy
• Clergy residence. If rendered uninhabitable from a covered peril, may receive benefits for Additional
Living Expenses (ALE)
• Newly acquired buildings or newly constructed and personal property for 180 days may be available
• Business personal property of your officers, trustees, church heads, and employees at or away from the
premises
Your particular policy may or may not include all of these standard items, and may include others. It’s important to thoroughly read
and understand your policy, and work closely with a insurance producer to make sure your policy meets your needs.
Common Parts of the Insurance Policy
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Liability Insurance coverage – protection from claims of injury or property damage caused by your
negligence
General liability coverage – liability coverage may be available for staff, church members and/or volunteers.
Other liability coverages to consider:
• Ministers and Pastors liability – clergy, church leadership
• Employment practices liability – wrongful termination and other employment issues
• Directors, officers and trustees liability
• Religious Freedom liability (protection from discrimination suits)
• Sexual misconduct liability
• Church activities off-premise liability
• Daycare and preschool liability
Carefully consider the activities of your unique Place of Worship and the associated risks with your trusted
insurance professional.
General Exclusions and Policy Limitations
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These risks are generally excluded, though many can be purchased separately or as an endorsement
• Flood coverage – while some policies offer private flood insurance coverage, you generally need to
purchase coverage for flood insurance separately
• Employment practices
• Foreign travel
• Money and securities
• Animals
• Cost of excavations and grading
• Piers and docks
• Underground pipes
• Cost to research, replace and restore information on papers and documents
General Exclusions and Policy Limitations
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These risks are generally excluded, though many can be purchased separately or as an endorsement
• Vehicles
• Structures or personal belongings not owned by church or clergy
• Wear and tear
• Boilers, except due to explosion
• Building ordinance coverage
• Earthquake
• Mudslide
• War and military action
• Loss of use
• Business income during loss of use of the building, including rent and school tuition
General Exclusions and Policy Limitations
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In general, many of the separate parts of your
commercial insurance policy for your Place of Worship
will have separate coverage limits.
For example, you may have you may have $100K for
clergy personal property, and $5K in coverage for your
signage. Make sure your limits meet your organization's
needs.
• Commercial Auto Insurance for Places of Worship owned and/or non-owned vehicles
• Workers compensation
• Umbrella insurance
• Active shooter
• Cybersecurity insurance
• Coverage for accounts receivable records – money owed to your
organization and unrecoverable because of loss or damage to
your accounts receivable records
• Coverage for Fine Art
• Private structures used as dwellings, not parsonage units
• Theft/vandalism (and rewards for information)
Other Protections to Consider
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Your insurance company will pay only that part of your loss over the deductible amount stated on the
declarations page for any one occurrence, so it’s important to pay close attention to the deductibles you
choose.
Your policy may include more than one deductible. It’s important to understand your deductible or
deductibles, and when they apply. If an insurer isn’t offering a deductible or deductibles that you consider
to be manageable by your organization, you should consider shopping around and obtaining quotes from
other insurers for the same coverages. If your policy includes a deductible that is written as a percentage,
make sure you understand when this deductible applies, and how much this will cost your organization.
Pay Attention to your Deductibles
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How do I get Started
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Speak to other Places of Worship for insurance agent and broker recommendations.
Many insurers will visit your Place of Worship in an effort to help you understand your insurance needs,
and may offer ideas about how to maintain your building and lower your insurance risk – which can
ultimately save you premium dollars. They may have ideas about large maintenance issues, or smaller
ones, like stairwell lighting. They may be able to help you understand how to make the activities you
provide safer for your staff, volunteers and your guests, and help you understand the value of items your
organization owns.
How do I get Started
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Ultimately, you are looking to purchase enough insurance to put your organization back to its original
position should an occurrence happen, but not more insurance than you need. Instead of thinking about
the lowest premium, ask your producer to go through everyone line of coverage available to Places of
Worship, so you are certain you end up with exactly the insurance coverage that will properly protect
your organization.
Final Note
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Your commercial insurance policy for your Place of Worship includes a duty to notify the insurer when
you are first aware of a potential claim. Report all potential claims to your insurer or insurance producer
as soon as possible. For property damage claims, mitigating your losses early is key. Contact the
insurance company, agent, or broker as soon as possible.
Questions?
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