Are you fully covered?
Robert Greenman, Lyme Regis, England
A word about insurance
Having been saved at age 15, I entered the insurance profession the following year. I became an Associate of the Chartered Insurance Institute by examination, and was a Chartered Insurance Broker when I retired last year from 27 years of running my own brokerage.
Reasons to insure
In case any assemblies have misgivings about buying insurance, it may be well to consider reasons for being insured. No assembly premise is exempt from the possibility of disaster, which could be fire, flood, storm, vandalism and a whole range of things. Without insurance a small assembly would need outside financial help if the testimony is not to cease and other assemblies will also be small and short of finance. Many sympathetic assemblies might be disinclined to help if they have bought insurance themselves, and the stricken assembly were uninsured.
While the above incidents are the most likely, and for even the smallest assembly premises some of them could easily cost more than £100,000, they are far from the most potentially expensive. We were often asked why the assembly needed some covers for £5 or £10 million!
A rarity in assembly circles these days, is people working for the assembly under a contract of employment. Even If it is verbal and very informal, such as a cleaner working a few hours for a small weekly payment, that person, whether in fellowship or not, is an employee. The law says the employer, the assembly, must insure their liability for injury at work to the employee, for at least £5 million, and must display a Certificate of that insurance where the employee can see it.
Whilst employees who are believers will not sue the assembly because that is unscriptural, 1 Cor 6. 1-8, the assembly must have insurance to pay them compensation if necessary. Even in secular situations, it is rare for such cases to go to law, as agreement is normally reached without that.
(c) Public Liability
It is not just employees who might be injured by the negligence of the assembly, but any member of the public, such as an unsaved person invited to hear the gospel. How many of us have heard about, or even seen, somebody fall into an open baptistry? In today’s litigious society, full of ‘ambulance chasing’ and TV advertising solicitors, an injury to an unbeliever in such circumstances is almost inevitably going to result in a claim. If the victim is a little old lady, compensation might well be small, but we can’t choose our victims! A knock on the head to a high earner, with a long life of great potential before him, makes a seven-figure compensation payment very possible. In these days when so much of our compensation culture seems to be weighted in favour of the ‘victim’, even an injured intruder could be able to make a valid claim!
How to be insured
(a) ‘Package’ Policies
Quite often, assemblies asked us about not insuring for those risks they considered inapplicable to their situation, e.g., they have no employees, in order to reduce the premium. That can only work if not buying a ‘church package’ policy, and the cost of that is likely to be greater!
Most of what I call the mainstream insurers do not have ‘church package’ policies, and would have to use a commercial combined contract. As its name implies, it is designed for insuring businesses and cannot be recommended. It would be like grabbing an expensive suit off the tailor’s rail without looking at the size, then wearing it to a wedding despite it being a grotesquely bad fit.
While ‘church package’ policies almost always contain cover that not every assembly needs, they are still by far the best buy. Those insurers that provide them will not remove the unnecessary covers. If they did, it would involve work for which they would wish to charge, so the premium would be more, not less! Just let the unused cover sit there, and ignore it.
‘Church package’ policies are mainly available from the following three insurers, detailed alphabetically: Ansvar (owned by Ecclesiastical, which is better suited to insuring Anglican premises) only operates through brokers, and a lot of its church business is placed by Christian brokerages. Many of their staff are believers. Congregational accepts business direct and through brokers, as does Methodist, which is nominally independent but largely controlled by Ecclesiastical.
(b) Claims on insurance
The assets of these insurers are, generally speaking, invested in places that will not cause disquiet to the Lord’s people. Many people see insurers as wanting to grab as much premium as they can, and avoid paying claims if at all possible. In all honesty, after 47 years in the profession, I must say that generally that perception has no basis in fact. As with any business, the raison d’etre of an insurer is to make profits for its shareholders or other owners, and insurance is merely the vehicle by which that is done.
If genuine claims are not fully paid, or not paid at all, on a systematic basis, that insurer won’t last long. To be on the safe side, using a broker costs no more for church policies, and they will ensure fair play. Most of the claims, church or otherwise, where I encountered insurer shortcomings, were because the staff member concerned didn’t understand something. A bit of guidance from our brokerage usually resolved the problem fairly quickly!
While the skeleton of an insurer’s work is to collect the premium and pay the claim if an insured event arises, most insurers do more than that for non-personal insurances, and the above three do lots more for church policies. They give help and advice at the start of the policy, and from time to time during its lifetime. Some people complain that it is irksome, and sometimes costly to follow that advice. The insurer hopes that following the advice means less being paid in claims. As that arises from the nonoccurrence of the claim event, or it being less serious, it is potentially good for the policyholder as well as the insurer.
What to insure
(a) Main issues
Before looking at the sort of advice given, let us summarize some of the main aspects of policy cover:
- Damage to building or contents by fire, smoke, explosion, lightning, storm, flood, escaping water or fuel oil, vandals, thieves, plus impact from road rail or air vehicles or trees, poles aerials and the like.
- Accidental damage to underground services, glass, and sanitary ware.
- Loss or theft of money, such as from the treasurer’s home or on the way to the bank. Almost always, the first £100 or so of the above claims is excluded.
- Legal liability for injury or property damage, to those in fellowship or others, arising from the activities of the assembly anywhere in the UK. Limited payments for certain injuries to volunteers, in the assembly fellowship or not, arising from the activities of the assembly anywhere in the UK, regardless of liability.
(b) Risk assessment
More often than not, a new church policy will require a survey by the new insurer. The main purpose is risk assessment, and our experience is that not many places will have to take much action, but it is essential to go along with the insurer’s requirements. If not, the risk may be so great no insurer will want to cover it!
Risk Assessment needs to be high on the agenda for the assembly. They are responsible for the building used for its activities, and responsible to those that serve the Lord in it and those that come in for various activities. Regardless of any input by an insurer, the following should be regarded as both prudent and good practice:
- Provide a Health and Safety Check/Action List of possible areas where accidents could happen, and make these as safe as possible with warnings where appropriate.
- Invite a qualified electrician to examine all electrical installations in the building, including portable equipment, to ensure it is all up to the standard currently required both by the industry and by legislation for public buildings. One assembly has just paid £700 to have their installation brought up to standard. It is well worthwhile!
- Invite the local Fire Brigade to advise you on your fire precautions, and list suggestions for bringing them up to present requirements. Correctly placed and compliant notices are now expected for each emergency exit in public buildings. With all they have to do, some Brigades are slow to respond to requests, but there are now many private firms that will do the same, and quote a price for their recommendations. They will also provide an annual inspection.
Bearing in mind assembly buildings are public places, it is, for example, essential to minimize fire hazards, such as unchecked ancient electrical wiring, and to have adequate fire extinguishers and uncluttered, clearly signed, fire exits. These days, there are a lot of ‘Regulations’ which might apply, and though we may feel they are over the top, they carry the weight of law. Rather than risk spoiling our testimony, it is better to be guided by the professionals.
- If the assembly employs anybody, display the Certificate of Employer’s Liability Insurance where the employee[s] can see it.
- Prepare a Child Protection Policy and display a notice to this effect in a public place.
- Check whether there is any asbestos anywhere in the premises, and if so call in an expert and follow their advice immediately. Public health regulations require this substance to be dealt with professionally as a possible cause of danger.
All or any of the above could invalidate the assembly’s insurance, but they should also be things the assembly does as good stewards of the Lord’s Name and testimony. It may be possible to get advice on the rebuilding cost of the premises by the insurance surveyor. Underinsurance, on the basis that a total loss is unlikely, is unacceptable. Premiums are calculated knowing the unlikelihood of a total loss, and based on the cover being for the rebuilding cost. It may be necessary to seek professional help, such as from a known builder or surveyor in assembly circles.
Contents are almost always covered on a new for old basis, regardless of their age or condition, or whether they will be replaced if destroyed. It is unlikely you will be offered an opinion on the amount of cover needed for these, as the surveyor will not be qualified for that.
Underinsurance of either building or contents can result in the payment of even a partial claim being scaled down.
Also, thieves don’t know we have nothing worth stealing (probably because they never darken our doors legitimately!), so security against them must be adequate, or they’ll break in, and then trash everything because there is nothing to steal!
(d) Child Protection issues
More obscure is the advice given relative to possible legal liability claims. Sadly, assembly Sunday schools and the like are in great decline these days, and perhaps sadder is that it is no longer just a case of receiving children, teaching them, and sending them home. Some recent huge increases in church insurance premiums arose from allegations against those working with children. Even if all such claims are soundly rejected, there is a cost investigating them, and it is better if the claim is never made. Child Protection is high priority among the advice insurers are keen to give to new church customers, and it is wise to follow it. Most insurers are happy to help formulate a Child Protection Policy.
(e) Outside venues and third parties
These days, assemblies are becoming increasingly diverse in efforts to encourage people inside our premises, to show we are normal people rather than a weird cult, and to display what we can of the gospel. This may range from use by outside playgroups, to examination venues for local colleges, or a neighbour might borrow the hall for a wedding or birthday party. The moment a third party enters the picture, there are extra considerations. The assembly insurer needs to be consulted, both to ensure the policy as it stands is not invalidated, and also that any incident does not fall between the two stools of cover provided by the assembly and that of the user.
Assemblies with minibuses will be aware they must have third party motor insurance by law. They can weigh up the value of the vehicle against the extra premium, to decide whether to insure damage to it also. There are very few realistic markets for this cover, being mainly Ansvar, and MinibusPlus, which is a specialist broker using Norwich Union only. Beware lending the vehicle, such as to another assembly or for a camp, without first checking with the minibus insurer. Ansvar do not normally permit any private use of the vehicle, such as a family trip by its regular driver, but they are usually considerably cheaper than Minibus Plans.
For those assemblies whose trustees are local saints, rather than an umbrella organization for a number of assemblies, there are extra considerations. The assembly or its trustees could be liable for damages and expenses arising from the ‘wrongful acts’ of trustees, which doesn’t just imply dishonesty, but includes simple mistakes. What if title deeds were mislaid, for example, or there is a prosecution for breach of the growing plethora of Regulations? Trustees Indemnity insurance is becoming increasingly popular.
Those responsible within each assembly should bear in mind the implications of not having insurance, or it being inadequate. There is the possibility the Charity Commission could hold individual trustees personally liable from their own private funds!
Finally, I trust this outline will be useful, perhaps saving too much time being diverted to side issues such as insurance, so that assemblies can concentrate their efforts on the main task of witnessing for the Lord in the place where He has put them.
Our brother Robert Greenman is willing to be of what service he can be to any with general queries over these issues. He can only provide advice of a genral nature and is not able to answer specific questions relating to particular issues. Contact can be made on email at email@example.com or by phone on 01297 443210.