Answer: Sexual abuse with a minor
A single lawsuit can derail a thriving, growing church and cost millions of dollars, as well as the loss of members and their faith in the safety of the church.
Such a catastrophe can happen to any church without proper risk management strategies in place.
Being prepared for the unexpected helps churches to prevent costly claims and devastating lawsuits, creating a secure atmosphere for worship and fellowship.
At AGFinancial Insurance, we don’t just sell insurance; we provide the risk management strategies to help protect your church.
Crucial to risk management is an understanding of why lawsuits and verdict amounts are increasing.
First, 23 states either increased the statute of limitations or eliminated it altogether in 2019. At present, 41 states are considering statute of limitations reform.
Second, courts and juries are wanting to financially penalize those that have incidents, and the judgments are increasing. I know of three claims in the last year that were more than $3 million each. Third, plaintiff attorneys are looking at assets of the church versus the limit of insurance the church might have, so those with more equity need to have higher limits of liability.
Finally, insurance companies aren’t covering or are limiting coverage for sexual molestation. In addition, they’re sometimes changing definitions to deny coverage or limit coverage for sexual misconduct with a minor.
So, what can your church do to better protect itself, and what strategies should you implement?
Make sure that your insurance is placed with an insurance company that writes or specializes in writing churches. Ask how many churches they insure and what percentage of their business is churches. Similarly, make sure to work with an insurance agent that specializes in writing churches. Also, check your insurance coverage for sexual misconduct. Do you have that coverage? Is the limit less than what the coverage is for general liability? Knowing that this is the No. 1 reason churches end up in litigation, why would you have a lower limit? Does it limit coverage for minors? Does it only provide coverage if a background check had been done? If your agent can’t answer these questions, you might need to look for another agent.
In most lawsuits, the plaintiff attorney is going to sue for negligence, which will then help trigger any insurance coverage. Further, in trying to hold the church responsible, they will sometimes plead causes of action for negligence against the church for their negligent supervision and / or negligent hiring.
Many insurance companies might not want to provide coverage or the limits you need, as they know the risk and have seen an increase in the amount of settlements. We have implemented six steps to help minimize your sexual abuse liability and to provide the insurance carrier a reason to provide a higher limit. The below list should follow your community standard. Check with your local schools to see what they do to protect the children in their care, document it, and try to follow those same standards.
• A written application for all employees and every person working with minors, as well as anyone with a key to the church
• A thorough interview process
• A background check, including a criminal record check and sexual offender registry check
• Two documented reference checks, including any past church history and asking if they have any reservations about them working with minors
• A two-adult policy: at no time should a child be left alone with one adult.
• A six-month rule: all applicants must be in good standing with the church for at least six months before being allowed to work with minors.
Do you know who was insuring your church 20 years ago?
I have had insurance companies ask for copies of older policies to prove coverage and limits were in place so they can provide a defense. Be sure to keep your insurance policies indefinitely, knowing the statute of limitations has changed recently and is likely to change again. The insurance marketplace and legal system is always changing, and your church needs to be proactive so it can be a viable ministry in the future.