Insurance should be a straightforward transaction. For example, after a car crash, you tell the insurance company what the make, model, and year of your car is, and they pop out a figure based on risk. A homeowners’ claim is a little trickier, because you have to estimate the value of the structure, your personal belongings, and other specific items you may need to obtain appraisals for to prove their value in a loss.
What about damage in places of worship, though? Do you think you can guess how much those one-of-a-kind antique stained glass windows your church secured might cost? What about that slightly battered Torah saved from World War II, or the copy of the Quran that from Mecca? Valuing these invaluable items to protect against their loss can be challenging.
Non-profits and charities are at greater insurance risk, as well. They have volunteers, sponsor public events, participate in fund-raising activities, provide public services – all of which open them up to potential property damage, theft, and injury, which may require hiring an attorney to fight the insurance company.
Take a closer look at some risky coverage issues
Coverage for non-profits and places of worship can involve many moving parts because these entities are involved in so many benevolent activities, but they are still “businesses” where insurance risk is concerned.
Skipping the cyber liability insurance, which protects your entity in the event of an online data breach, can leave you liable for hundreds, if not thousands of claims. Many fund-raising activities have moved to online platforms and donors now have their personal data stored on these websites making them ripe for cyber theft.
Funds transfer fraud coverage has become increasingly more important for non-profits because they are susceptible to hacking. Thieves hack bank accounts and email addresses solely for the purpose of making illegal bank account transfers, which can bleed a charity dry.
Insurance for molestation and abuse allegations is a form of coverage that, sadly, no charity or religious institution should go without. In today’s climate, nobody can predict whether allegations will be made, and it has become a necessary safeguard.
Boards of directors of charities have fallen under closer scrutiny since officers of some high profile charities have been found to have misappropriated funds. One of the largest recent scandals came from the Wounded Warrior Project, where top board members wasted close to half of the charity’s budget on extravagant parties, lodging, and other unnecessary expenditures, angering – rightfully so – many of its donors.
Not every activity by a board has to be borderline fraudulent to put them at risk for being sued. Even the best-intended decisions can end in being liable for a mistake. If your charity or church fails to add Directors and officers liability (D&O) coverage, your board of directors may become personally liable in lawsuits.
Injury can occur in so many ways when you consider all of the activities that take place in both places of worship and non-profits. Employees and volunteers can slip and fall in your building during a normal workday, or they can become injured in a vehicle accident traveling to or from a fund-raising event.
A Habitat For Humanity volunteer was killed after being shocked and falling from a roof while helping to build a low-income housing development. Unforeseen accidents happen, so your charity needs to be prepared with volunteer accident coverage.
History may need to repeat itself
More common coverage issues are not necessarily easy to calculate and require a more pointed look at the property being insured. Historical value and condition of the structure or religious relics contained within its walls can be a tricky proposition. How do you value a structure that cannot be duplicated in the event of a disaster because materials used 200 years ago are no longer available?
Valuation of historical structures and their contents is a specialized area all of its own in the world of insurance. “Beyond the intrinsic characteristics of historic buildings, which increase the complexity, risks and costs of insuring them, they [need] to be analyzed based on what goes on inside them. And since they are existing buildings, materials and labor codes must be taken into account.”
Specialty contractors sometimes need to be retained to place values on structure materials, but insurance companies are not always willing to work with these valuations. Full reinstatement coverage comes with a hefty price tag, but when you are talking about hand carved architectural embellishments, or irreplaceable works of art and collections, are you willing to take that risk?
Has your church or charity been damaged by a hurricane, fire, or other disaster? The insurance dispute attorneys of Warhurst Law understand the insurance claim needs of residents and businesses alike. We strive to help settle tough insurance claims for religious and non-profit entities in Alabama and Florida. To see about scheduling a free case evaluation, call our Mobile office at 251-207-1296 or reach out to us for help through our contact page. We represent policyholders throughout the Southeast.