What Kind of Insurance Does My Church or Charity Need?

May 24, 2019 - 5 minutes read

As a church, charity or other not-for-profit you are no doubt focussed on providing services for your communities and people in need. However, in those aspirations it’s important not to neglect the very real and practical need for insurance cover for your organisation.

All organisations carry risk and that includes churches and not-for-profits. In that sense insurance is just as crucial for churches and not-for-profits as it is for commercial companies, in that it provides a layer of financial protection for those risks.

It’s also important that your insurance cover is tailored to your organisation. This is best done through specialist providers in church insurance and insurance for not for profit organisations, rather than through cover more suited to commercial businesses.

About risk and risk management

‘Risk’ just refers to the things that could go wrong in an organisation. When we talk about risk in terms of insurance however, we are meaning the types of events that could lead to significant losses.

Examples include:

  • property damage or loss from crime or natural disasters;
  • accidents and injuries on your property;
  • claims for losses from services rendered;
  • losses from cyber attacks or hacking;
  • travel mishaps; and
  • motor vehicle accidents.

Risk management‘ refers to managing those risks so their chance of occurring or their impact is minimised. While insurance can cover risks from a financial perspective, it’s up to the organisation to manage its own risks. You can do this through providing safe premises, property security measures, cyber security, fire safety and other church safety measures.

Managing your risks also reduces your risk of paying insurance excesses and potentially incurring higher premiums.

Insurance types

There are several types of insurance for churches and ministries, charity insurance, church insurance or local community insurance that may apply to your organisation. These include:

1. Property:

Industrial Special Risks cover – property insurance for loss, damage or destruction to your property from a covered event such as fire, theft, glass breakage and more.

This insurance also includes interruption cover – that is, financial cover for lost revenue and costs to your business or ministry while you are getting back to normal after a catastrophic event.

2. Liability cover:

Liability insurance is essentially cover for situations where someone claims you’ve harmed them and then sues you.

It includes:

  • General liability: public and products – e.g. cover for cases where a person claims they were injured or experienced loss or property damage on your premises.
  • Management liability – where directors, officers or employees are alleged to have caused harm through their actions.
  • Professional indemnity (PI) –  cover for cases where a party feels they have suffered a loss due to your services such as counselling, prayer ministry or pastoral care. See our previous article on PI insurance for churches for more detail.

For more detail on liability cover – see our previous articles on liability for faith organisations and activities that might not be covered.

3. Personal accident:

  • Volunteers & youth – accident cover for volunteers not covered by compulsory workers’ compensation.
  • Ministers – for ministers, pastors or chaplains engaged in church-related activities.

4. Other insurance: 

  • Business travel – for mishaps while travelling for your organisation. It covers events like luggage loss, credit card fraud and money loss, accidents and medical costs.
  • Cyber insurance – covers losses and interruption to your business due to a cyber event.
  • Workers’ compensation – compulsory cover for all Australian employers.

More information

You can learn more about charity insurance, insurance for churches and ministries and local community insurance from our insurance page. Alternatively get in touch with us by email or ring us on 13 000 FAITH.

Written by Tess Oliver






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